Client Requests and Assignments

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Client Requests and Assignments

  1. 1. Business Plan Assistance For SCORE 34 Mentors Client Requests and Assignments
  2. 2. Client Requests for “Business Plan Assistance” <ul><li>The two most frequent areas of assistance asked by new clients of SCORE are: </li></ul><ul><li>Starting a Business </li></ul><ul><li>The Business Plan </li></ul><ul><li>Both are so vague that it is not clear what knowledge the client has or whether it is even the right question to ask. </li></ul>
  3. 3. First--Get to Know Your Client <ul><li>Have your client talk about their current work, their family and their financial position (i.e. own home, credit score, etc.)—very important if client needs a loan </li></ul><ul><li>Listen more; talk less– have the client get comfortable talking to you </li></ul><ul><li>Identify their strengths and weaknesses (so you can be prepared to address areas of which they are not aware (e.g., accounting). </li></ul>
  4. 4. A Simple Start to Business Planning <ul><li>A Business Plan [BP] is the end product not the next step. </li></ul><ul><li>Most clients can’t handle the complexity and confusion of even the outline of a BP </li></ul><ul><li>Use the following 5 Assignments to outline the really key issues before working on the full business plan </li></ul>
  5. 5. Five Initial Assignments <ul><li>Answer* each on 1 page of paper: </li></ul><ul><li>1. What is my vision of the new business? </li></ul><ul><li>2. Can I make money on an individual sale? </li></ul><ul><li>3. How much must I sell in a month to make a profit? </li></ul><ul><li>4. How much cash do I need to start. </li></ul><ul><li>5. Do I have stakeholders buy-in? </li></ul><ul><ul><li>* Use details in the referenced SCORE Briefs </li></ul></ul>
  6. 6. Assignment 1 - Vision <ul><li>1. What is my vision of the new business? </li></ul><ul><li>Assignment: Have client write a one page newspaper article about their next year in business, Use the required details outlined in: </li></ul><ul><li>- Brief # 20.10 Instructions for One Page Newspaper Article </li></ul><ul><li>Note: </li></ul><ul><li>- Most clients can write a simple newspaper article whereas a “business plan” is just not yet in their comfort zone. This will also force them to focus on the key issues. </li></ul><ul><li>-If client is already in business, then do both Part A and Part B of the Assignment #1 </li></ul>
  7. 7. Assignment 2 – Make Money <ul><li>2. Can I make money on an individual sale? </li></ul><ul><li>Assignment: Have client complete a one page form that will identify the estimated gross margin [with no overhead] on a sale. Use one of: </li></ul><ul><li>- Brief # 20.21 One Page Gross Margin Calculation - Product </li></ul><ul><li>- Brief # 20.22 One Page Gross Margin Calculation – Service </li></ul><ul><li>Note: Ignore the fixed costs, just see if the product/service sales price has enough margin to cover the “variable” costs. We will deal with volume and fixed costs later </li></ul>
  8. 8. Assignment 3 – Break Even Point <ul><li>3. How much must I sell in a month to make a profit? </li></ul><ul><li>Assignment: Have client complete a one-page form that estimates fixed costs and then determines the volume of sales needed to make any monthly profit. Use instructions in Briefs: </li></ul><ul><li> - Brief # 20.31 One Page BEP Calculation - Product </li></ul><ul><li> - Brief # 20.32 One Page BEP Calculation - Service </li></ul><ul><li>Note: client estimates costs and then must up the sales volume until there is enough gross margin to cover it! </li></ul>
  9. 9. Assignment 4 - Cash <ul><li>4. How much cash do I need to get started? </li></ul><ul><li>Assignment: Have client complete a one-page form that estimates the startup expenses and two months of operating capital needed (inventory, A/R) and then identifies where that cash will come from. Use instructions in: </li></ul><ul><li> - Brief # 20.40 One Page Needed Cash Calculation </li></ul><ul><li>Note: client estimates items and amounts then struggles with where all this money will come from. A rough but a good introduction that will let you know whether their business idea has the “smell” of practical. </li></ul>
  10. 10. Assignment 5 - Stakeholder <ul><li>5. Do I have stakeholder buy-in? </li></ul><ul><li>Assignment: Have client complete the check list to introduce and document potential stakeholder issues. </li></ul><ul><li>Use: </li></ul><ul><li>-Brief # 20.50 – Stakeholder Buy-in Check List </li></ul><ul><li>Note: </li></ul><ul><li>- Stakeholders are any persons [wife, kids], groups [bank], organizations [employer], or system who affects or can be affected by the proposed business. </li></ul><ul><li>-Client will probably find this eye opening as they likely will not have thought about a lot of the support/time/other stakeholder issues. This will be used for subsequent discussion of participation in the business. </li></ul>
  11. 11. Use of Initial Five Assignments <ul><li>Having simply raised these fundamental issues in the clients language, you have: </li></ul><ul><li> 1. Identified the KEY issues to be dealt with before all of the confusion and secondary questions of a business plan are tackled. </li></ul><ul><li>2. Likely raised real questions in the client ‘s mind about continuing . Not committing family assets to a failure is a WIN! </li></ul><ul><li>3. Determine if an economic basis for the business exists. </li></ul>
  12. 12. Other Frequently Used Briefs: <ul><li>Pricing Procedures for Retail (Brief # 07.00) </li></ul><ul><li>Pricing Your Service (Brief # 07.01) </li></ul><ul><li>Pricing For Manufacturers (Brief # 07.02) </li></ul><ul><li>Legal Structure (Brief # 02.00) </li></ul><ul><li>Partnership Agreements (Brief # 02.09) </li></ul><ul><li>Balance Sheet (Brief # 04.07) </li></ul><ul><li>Income Statement (Brief # 04.05) </li></ul><ul><li>Cash Flow Projections (Brief # 04.09) </li></ul><ul><li>Your Business Accountant (Brief # 04.01) </li></ul><ul><li>Your Business Attorney (Brief # 08.00) </li></ul>

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