The Ultimate Financing Guide

By Woodrow Wollesen

Ultimate Financing Guide is the most unique treatise ever published. It seeks to directly aid and assist every entrepreneur and small business owner to succeed.

Why is this work so critical in order to succeed?

Simply put, entrepreneurs and business owners continue to fail in record numbers nationwide. As the studies repeatedly confirm, the prime villains are lack of requisite knowledge for best business practices and having the financial acumen to succeed. https://smallbiztrends.com/2016/11/startup-statistics-small-business.html

     Ultimate Financing Guide  is the only authoritative business educational resource providing "real world" advice/guidance that directly target those knowledge deficiencies. It is the only immediately downloadable E-Book business educational resource that pays for itself many times over and over (lacking in every other business educational program/effort in the nation). It is the only "real world" business financing encyclopedia in the country.

     Created by a "real world" nationally recognized business financial expert (military veteran) by and through his own 501 (C) (3) nonprofit dedicated entirely to your business success - a pure 100% business educational resource (only one of its type in the country) (it has no memberships, no funding raising events, and no salaries – all funds are dedicated exclusively to knowledge empowerment and your economic success. Download/purchase and see for yourself

• Language: English
• Publisher: Woodrow Wollesen
• Release date: Jun 22, 2017
• ISBN: 9781386585862

Woodrow Wollesen

Highly diverse and multiple expertise in a wide range of disciplines/subjects - former co-head of a national law firm, distinguished trial and appellate counsel practicing before the highest tribunals within the state/federal/regulatory systems/courts to include the Supreme Court of the United States, equipped with widely diverse accounting and wide ranging business, executive, management skills and acumen, former CEO of his own service enterprise(s), personal involvements in start-ups, experienced entrepreneur, innovator, educator, teacher, trainer, mentor, instructor, graduate level professor, author, and recognized expert regarding the entire realm of small–medium business financing/operations/real estate/management/workforce policies/compliance/forensic investigations/marketing/ branding/ entrepreneurial subjects, speaker, consultant, and advocate for veterans, women, minorities, and historically disadvantaged groups in business and entrepreneurship/volunteerism - personal involvement in thousands of small business transactions covering the entire gambit financing now exceeding over $1 billion – US Army veteran – Vietnam War years. Woodrow (Woody) D. Wollesen is a recognized national small business financing expert, former co-partner national law firm, seasoned entrepreneur/business executive, financial/business operations consultant, former graduate school of business professor, military veteran; 2006 US SBA Small Business Financing Champion, (8 years) Board Member, Executive Officer, Instructor with the prestigious National Women’s Business Center, Washington, DC; NWBC 2005 Man of the Year – see also more extensive background profile at http://www.ultimatefinancingguide.com/about-the-author/; LinkedIn www.linkedin.com/pub/woodrow-wollesen/11/147/652/;  

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Introduction

In my view, and amply justified from the available statistics, entrepreneurial ventures and small businesses have been and remain the backbone of this nation’s economy. These are the vital links to our economic prosperity and future. Any law, policy, or regulation that fails to recognize in every possible respect that truism harms America. That as well includes any and all processes that hinder, obstruct, or delay efficient and timely access for all small business to required financing.

The following is an excerpt from a press release from the House Committee on Small Business dated September 25, 2006. Ignoring any and all political overtones, the message speaks loud and clear that small businesses are essential links within the US economy:

Small businesses are a critical part of our economy. They represent 99.7 percent of all employers, employ 52 percent of private-sector workers, and provide 51 percent of the private sector output.  While many large companies are shedding workers, small businesses provide 60 to 80 percent of the net new jobs.

Promoting job growth continues to be a number one priority. Below is a brief description of what Congress has accomplished over the past 12 years as a result of efforts to reduce the tremendous tax and regulatory burdens that hamper small businesses and stifle their job-creation potential. Chairman Donald A. Manzullo

WHAT A DIFFERENCE 12 YEARS MAKES

*Based on latest statistical data, some of which is from the 2002 Census survey of business owners

As long as we dare to dream, create, and aggressively pursue those ideas to fruition within the business realm, we shall remain the dominant economic force in the world. In order for that to continue, there must evolve better more timely, resource efficient means of matching financial support and funding to the firms and ventures that require it. There is no other viable path for success. That results in economic growth, expansion for existing and emerging companies, and immediate new job opportunities. That economic expansion has a direct impact on social ills and their remedies, saving vital resources and reducing costs of all types to the public should be beyond conjecture.

It is my hope that through this Guide that a better educated business community, properly utilizing the available local professional support and financial resources, will achieve immediate direct savings in time and money and contribute to those above noted goals. That should result in better planned and a more successful financing strategy for all business enterprises.

You have to learn the rules of the game. And then you have to play better than anyone else. Albert Einstein

One interesting facet of the entrepreneur or small business owner or CEO is that each typically has overwhelming expertise or knowledge in their specific enterprise and its operations providing service, material, or products, and/or all of the above. Very few have any practical or involved expertise respecting financing in the real world. Few have any practical or solid knowledge regarding accounting, strategic financial planning, and/or how or where to efficiently acquire the financial facilities so vital to their businesses.

As a consequence, following normal human inclinations, they tend to postpone required attention to these areas, often opting for last minute, ill advised solutions. They tend to readily relegate and delegate these areas to persons or firms who are neither qualified nor experienced. The end result is quite often disastrous and sometimes fatal to the business endeavor.

Finance is the art of passing currency from hand to hand unti it finally disappears. Robert W. Sarnoff

For an enterprise to be successful requires timely and well thought out investigations and decisions regarding the necessary financing. This work is intended to assist the owner in readily acquiring a working knowledge on every facet of business financing to use when and as needed. I would encourage every business owner to supplement the information provided herein with more self education in accounting, bookkeeping, and financial management issues.

These resources are usually readily available in most areas if one ardently looks and investigates – i.e., educational institutions and enterprise centers nationwide. The old saying to let your keyboard fingers do some walking across the Internet would be a solid recommendation.

Many of us don’t have to turn out the lights to be in the dark.

One unfortunate tragedy in this respect clearly deserves note. Hopefully its story will become a thundering catalyst for immediate remedy for the benefit all small business. One of the foremost successful entrepreneurial training centers in America was the highly regarded and prestigious National Women’s Business Center in Washington, DC. For example, its Up and Running courses were highly intensive, direct mentor involved/supported programs that brought women and men from the germ of an idea to a full fledged operating enterprise within a relatively short time period – a requirement for graduation. After almost three years of operation, every single graduate was still in business. The program produced over 350 graduates with 100% success rates, an attainment exceeding every training/mentoring program (university/ governmental/private/non profit) within the entire region.  A few had attained such success as to be in the process of acquiring other companies. A few were in the process of themselves being acquired for substantial dollars. Examples of Center trained and nurtured women and men who reached multi-million dollar business levels and far beyond were innumerable. The combined impact through our students and graduates far surpassed SBA’s wildest expectations with economic impacts throughout the regional economy in many tens of millions of dollars (over $2000 in return for every dollar invested by the Government in NWBC) with extensive accompanying increases in employment (covering ever strata of neighborhoods). The Center was nothing short of a national show piece and an overall phenomenal success story. After ten able achievements and making a real, concrete difference within the metropolitan Washington region, the Congress and Administration, in their infinite wisdom, cut off all funding. The Center was forced to close its doors in early 2007. In my view, after ten years of relatively modest annual investments by the federal government with measurable returns or positive economic impacts at a hundredfold in value, there was no possible justifiable basis for having eliminated that vital funding support. The loss to the small business community and especially the lost employment opportunities has been and remains incalculable.

It might be more worthwhile if we stopped wringing our hands and started ringing our congressmen. Anonymous

Giving money and power to government is like giving whiskey and car keys to teenage boys. P.J. O'Rourke

Ancient Rome declined because it had a Senate, now what's going to happen to us with both a House and a Senate? Will Rogers

Government is like a baby. An alimentary canal with a big appetite at one end and no sense of responsibility at the other end. Ronald Reagan

This work is about sticking to basics. One must have the physical courage to have the intention, desire, and actual conduct of mastering one’s fears and trepidations often in the face of overwhelming obstacles or misfortune. I would advise to fear no one or anything other than  a lack of resolve. In that regard, the second facet, i.e., moral courage becomes part of the embrace.

With the mantle of power and/or the ability to effect results, consequences, or impacts upon any endeavor or person, there must exist the requisite responsibility for its exercise. In this regard, ethical values must become of paramount importance – respect, honesty, accountability, empathy and caring, cooperation, courtesy, and the fortitude to stay these paths in the face of overwhelming pressures or temptations to do otherwise.

Some students drink at the fountain of knowledge and strong ethical values. Others just gargle.

The concept of whatever works and/or greed justifies anything and everything in achieving success is both shallow and counter productive.  These represent an actual path to personal and moral failure. The temptations will be there all around you. Others will routinely violate these simple precepts.

The only reason I’m in Hollywood is that I don’t have the moral courage to refuse the money. Marlon Brando

Moral courage is the most valuable and usually the most absent characteristic in men. George Patton

There are many guideposts for success of which monetary measurements are but one. From the ethical perspective it is the least important. How have you personally made your enterprise better than any other, built a reputation for quality and integrity, found better methods for  cost-effectiveness and profitability, and/or created a legacy for others to admire and follow? Those are the types of questions that should be posited. Success or power without requisite responsibility for any and all consequences is a road to perdition.

You gain strength, courage, and confidence by every experience in which you really stop to look fear in the face. You are able to say, ‘I lived through this horror. I can take the next thing that comes along.’ . . . You must do the thing you think you cannot do. Eleanor Roosevelt

Hence, those are my ABC’s for success – be audacious, bodacious, and be imbued with both physical and moral courage in pursuit of entrepreneurial success!

Those recommendations may appear at first glance to be rather fundamental and basic. However, I can assure the reader that I have discovered multimillion dollar firms with many of these elements lacking and/or absent from their CEOs/owners and/or their decision making processes. All were in trouble (whether perceived or not) and desperately needed infrastructure changes, and a wakeup call to get back to basics and a sounder foundation in moral values. Whatever worked wasn’t working so well.

Try to learn from the mistakes of others. Rest assured, you can’t live long enough tto make them all yourself.  I’ve been there and done that – hence this Book so that you can avoid those pot-holes.

Regardless of the endeavor or enterprise, it is essential that the firm have and maintain an ongoing business plan. As well, it is critical to have a working knowledge of financial statements and accounting/ bookkeeping matters, and most importantly to have access to and utilization of qualified professionals such as accountants, tax/legal, and marketing advisors to assist in the decision-making processes. I will deal with all of these in the following and other sub-paragraphs within this work in far more detail.

Chapter 1. Pre-requisites for the Business Journey

A. The Language of Money And Small Business Financing

As part of my sojourn in one of the finer institutions of higher learning, Washington & Jefferson College, I had the unique privilege and pleasure of coming under the tutelage of one of the best professors I was to ever meet or experience. As part of the liberal arts curriculum at this then all-male bastion of education was a requirement for specified credit hours in the science categories.

Despite the attractions of chemistry or zoology which were well known additions for the multitude of graduates later attending some of the best medical schools in the country, I opted for what I thought might be of a little more practical value – the study of botany. It would prove to be far more than I ever imagined and anything but a waltz through the daffodils!

The professor and head of the science department was Dr. Homer C. Porter. His admonitions on the very first day of class would become a standard for that area of study and a guidepost for the rest of my personal and professional life. Dr. Porter first noted that unlike any predilections that we as students may have entertained regarding the subject matter of the course, we would be challenged as never before. In his view, the course would embody the complete realm and spectrum of human learning. Botany was to be merely a vehicle to that end.

We would be required to demonstrate our complete mastery of the English language just for starters. Context, grammar, literary merit, and spelling would become standards in his course. Our grasp of anthropology, music, accounting, poetry, and endless others areas would all be brought forth in exploring the many wonders of botanical miracles that we would soon discover. There would be adventure and profits from our investments in time, energy, and concentration.  There would be a symphony of knowledge and an endless stream of thought from which to taste and drink!

We would indeed discover an entire liberal arts education within the confines of this study of nature’s plants. However, before proceeding further  he recommended for our immediate consideration, the adoption of a single, simple precept - all mental or educational disciplines come with their separate languages (logic or context). For example, there is a language for lawyers and the law, and separate ones for math, anthropology, chemistry, physics, and/or the study of transportation, engineering, music, history, geography, astronomy, and virtually every other area of human knowledge. Without a complete understanding of the appropriate language, study and/or utilization of that discipline would become extremely difficult.

Language is the close-fitting dress of Thought. R. C. Trench

Additionally, Dr. Porter opined that the greater the field of diverse experiences, educational backgrounds, and/or mastery of multiple disciplines, the richer the perspectives that we might bring into focus for botany; indeed for just about every other endeavor for the rest of our lives. Through my own experiences, I would come to agree entirely with all of Dr. Porter’s guidelines and admonitions for a proper education and their utilizations throughout life.

Those exact same guideposts exist within the realm of entrepreneurship and operating successfully in the small business world. This is especially true with regard to financing. The greater the ability to draw upon or from diverse disciplines of thought and experience, the greater the likelihood of ultimate success in the venture. There is indeed a separate language for the world of money and financing.

Money is better than poverty, if only for financial reasons. Woody Allen

When asked what would he do if he found $1 million, Yogi responded, If the guy was poor, I’d give it back. Yogi Berra

The very underpinnings of that focus and its practical applications depend upon the workable knowledge of financial statements, how such are derived/created, and why and how to interpret them. Therefore, for any new or existing enterprise, the owner/CEO must acquire that highly informed familiarity in order to use the available tools to the greatest advantage and ultimate success.

I would highly recommend and urge every business owner to seek out resources for classes and instruction in these and related areas at every opportunity. There are an infinite variety of sources out there from university or entrepreneurial centers to Internet instructions. Find the one that fits and works for you. Your business and profitable future literally depend upon it.

To aid and assist the reader, I have provided hereafter a brief glossary of terms from the language of money and financing. As well, within Appendix A herein one will find illustrative financials, schedules, and illustrative ratios to aid the reader. Please review these thoroughly as an aid to better understanding of the terms below.

(1) Business Plan - A written planning document that covers every aspect of any business endeavor or enterprise to include a detailed description of the venture, its market, management team, potential for success, competitors, financial support and proofs, and all other relevant information about the business and its prospects. Having a comprehensive and currently updated business plan will become the crux of the business owner’s package to support any and all financing forays with banks and/or equity investors, just for starters (for more details see next chapter).

(2) Executive Summary of a Business Plan – Often referred to as the most important part of a business plan, the executive summary provides in two pages or less, a concise overview of the entire business plan. Always maintained in a current updated version, this becomes invaluable in the quest for financing, regardless of source.

(3) Financial Statements – These typically refer to the profit-loss statement for the venture (historic or projected) for a set period of time, and separately, the balance sheet which captures the assets/liabilities/equity of the enterprise as of a set point in time (traditionally end of a calendar or fiscal year of operations).

(4) Profit/Loss Statement - A monthly, quarterly or annual financial document showing earnings, expenses, and net profit. Net income is determined from this financial report by subtracting total expenses from total revenue. The profit and loss statement and the balance sheet are the two major financial reports for every enterprise. The difference between this statement and the balance sheet deals with the periods of time that each one represents. The profit and loss statement shows transactions over a given period of time (usually monthly, quarterly or annually) whereas the balance sheet gives a snapshot view of assets and liabilities as of a specific date. It is also called income statement or earnings report.

(5) Profit/Loss - The positive gain/loss from an investment or business operation after subtracting for all expenses. Often referred to as the bottom line, net profit is calculated by subtracting a company’s total expenses from total revenue, thus showing what the company has earned (or lost) in a given period of time (usually one year). It is also called net income or net earnings.

(a) Pre-Depreciation Profit - Profit before considering non-cashexpenses.

(6) Fixed Charge Coverage Ratio – This is a ratio routinely utilized by banks to gauge the risk of repayment ability of the borrowing enterprise. This is basically the profits before income taxes and interest payments, divided by long-term interest, for a given period of time. Most banks will typically require a ratio of one and/or usually greater before approving the loan.

(7) Cash-flow Analyses: For small businesses, the most important aspect of cash flow management is avoiding extended cash shortages, caused by having too great a gap between cash inflows and outflows. You won’t be able to stay in business if you can’t pay your bills for any extended length of time. Therefore, you need to perform a cash flow analysis on a regular basis and use cash flow forecasting so you can take the steps necessary to head off these type problems. Many software accounting programs have built-in reporting features that make a cash flow analysis relatively easy. Banks, investors, and other financial firms use forecast cash-flow projections as a measure of risk and to gauge whether sufficient funds will be available to pay all costs including any increased debt obligations (i.e., coverage issues).

Typically, cash-flow analyses are plotted by month for a consecutive twelve month period with each month’s revenues and expenses detailed with cumulative totals are the bottom of each column. Blank charts for this sort of analysis are readily available on the Internet and most business center sources.

(8) Liquidity – Essentially, this is the ability of an asset to be converted into cash relatively quickly and without any significant price . Some banks and investors utilize their own evaluations of liquidity in determining the risk associated with any loan or investment. Most banks for example will rarely accept inventory, equipment, or machinery at face value or depreciated costs. A typical gauge is liquidation value which is the asset’s value if converted within sixty days or less at auction. Inventory rarely rises above fifty cents on the dollar in such evaluations (50% of the stated value).

(9) Current Ratio or Current Assets/Current Liabilities – Banks typically require in their financing covenants for the enterprise to maintain at least 1.0 current ratio which is the relationship between current assets and current liabilities. This ratio should be 1.0 or greater for liquidity. If it drops below 1.0, the ability to pay bills is impaired.

(10) Accounts Receivable – These are the trade or customer accounts of the business representing moneys due or owed for goods sold or services rendered as evidenced by notes, statements, invoices or other written documents of a present obligation. This is an asset on the venture’s balance sheet since it represents money owed to the firm.

(11) Accounts Receivable Aging Report/Statement – This is a periodic report or schedule that shows all outstanding receivable balances, broken down by customer, contract, invoices, or other identifiers, and typically reflecting ranges of days outstanding (i.e., unpaid for 0-30, 30-60, 60-90 days, etc.). Cumulative balances are usually totaled and reflected for each period at the end of the report.

(12) Progress Payments - This is a partial payment made under a contract or agreement for work or services performed to a venture based on some standard of a job or project being completed. These are sometimes included within or as part of the balance sheet accounts receivable accounts. In my view these should always be broken out and labeled separately. These typically exist within the construction industry where payments are made based on stages of completion of a building or project. Within the realm of business financing, these are often not considered to be hard collateral for purposes of advancing funds. A true receivable is based exclusively on specific services/products that have been rendered and completed without regard to the status of the project or building without set-offs or dispute. The invoice therefore reflects a done deal. The money is owed – end of story! The invoice is typically issued monthly and/or any other interval representing actual services performed. By contrast, a progress payment is based on a stage of completion and may bear no relationship whatsoever to either the actual cost or amount of services rendered or performed. Accordingly, these invoices traditionally do not hold the same solid value or basis as collateral for advances from most financial sources.

(13) Accounts Payable – These are debts or amounts owed by the venture resulting from purchasing goods/materials or receiving services on credit or upon an open account. This is money which a company owes to vendors for products and services purchased on credit. This item appears on the company’s balance sheet as a current liability, since the expectation is that the liability will be fulfilled in less than a year. When accounts payable are paid off, it represents a negative cash flow for the company.

(14) Accounts Payable Aging – This is identical in every respect to the accounts receivable aging report or schedule noted above, except it will delineate the amounts separately by vendors owed and time period outstanding, usually cumulated at the end of the report into ranges of time (i.e., 0-30, 30-60 days, etc.).

(15) Collateral – In terms of acquiring necessary financial support, collateral are the assets to which the lender will accept as security for a loan or other obligation. Banks first look to the balance sheet of the enterprise to identify assets that can qualify such as real estate, buildings, accounts receivable, equipment or machinery, and/or inventory. These are referred to as primary sources of collateral. The banks also tend to look for secondary sources of collateral such as the private and personal assets of the owner(s) of the business. These typically include secured liens against the private residence, undeveloped real estate, second homes or vacation residences, stocks, bonds, cash, or any other asset susceptible to ready valuation and/or liquidation. For the start-up, often the only assets available for collateral are the accounts receivable and when available, new contract awards (prospective view). Since banks typically shun start-ups or early stage firms, non bank or asset lenders are employed for that funding.

(16)Net Worth - Banks commonly require positive net worth as a condition to any financing and/or that a set value or ratio be maintained for a company’s net worth. It is basically total assets minus total liabilities on the balance sheet. This is an important determinant of the value of a company, considering it is composed primarily of all the money that has been invested since its inception, as well as the retained earnings for the duration of its operation. It is often used to determine creditworthiness because it gives a snapshot of the company’s investment history. It is also referred to as owner’s equity, shareholders’ equity, or net assets.

(17) Tangible Net Worth – This is a recurring area of confusion for some business owners who may consider their goodwill, trademarks, and patents to be highly valuable commodities. However from a financial perspective, the focus instead tends toward tangible net worth which is simply the calculated as net worth minus any goodwill or trademarks/patent values.

(18) Leverage – Within the financial realm of acquiring capital or necessary funding for a business, this tends to be the measure or degree to which the firm is utilizing borrowed money. Companies that are highly leveraged may be at risk of bankruptcy if they are unable to make payments on their debt. They may also be unable to find new lenders in the future. Leverage is not always bad. It can increase the shareholders’ return on their investment and often there are tax advantages associated with borrowing.

(19) Debt/Equity Ratio – This is a common measure of a company’s financial leverage. Debt/equity ratio is equal to long-term debt (or total liabilities) divided by common shareholders’ equity. Typically the data from the prior calendar or fiscal year is used in the calculation. Investing in a company with a higher debt/equity ratio may be riskier, especially in times of rising interest rates, due to the additional interest that has to be paid out for the debt. For example, if a company has long-term debt of $3,000 and shareholder’s equity of $12,000, then the debt/equity ratio would be 3000 divided by 12000 = 0.25. It is important to realize that if the ratio is greater than 1, the majority of assets are financed through debt. If it is smaller than 1, assets are primarily financed through equity.

(20) Debt/Asset Ratio – This is another common measure. It is the ratio of total liabilities divided by total assets. The debt/asset ratio shows the proportion of a company’s assets which are financed through debt. If the ratio is less than one, most of the company’s assets are financed through equity. If the ratio is greater than one, most of the company’s assets are financed through debt. Companies with high debt/asset ratios are said to be highly leveraged, and could be in danger if creditors start to demand repayment of debt.

(21) Ramp-up or Mobilization Funding/Costs – These are the funds required or costs to be incurred to an enterprise in order to prepare for and perform (products or services and/or both) under an awarded contract or project. Without an advance payment from the client, the business is left with incurring these costs internally until an invoice can be issued for completed work and actually getting paid. Payment can and often is delayed for as long as another 90 days, especially with the federal government, due it being a potential first cycle for a new contract. In effect, the funding at issue has no underlying collateral (no invoice issued and even when such occurs, it will typically be of far lesser value). Absent covering collateral from some other source, funding this requirement requires alternative and more creative means of financing, regardless of the source.

Again for examples of all of the above terms, please see AppendixA.

B.

Business Planning-An Essential Element In the Search For Capital/Financing

If one were to attempt to encapsulate the central reasons why the overwhelming majority of businesses do not succeed, especially within the first three (3) years of operation, it would be the failure to have and maintain a solid business plan. This in turn provides the core bases for key decisions on financial and management issues. Without that key written guide post, it would be akin to driving one’s vehicle blindfolded.

Under-capitalization, the apparent cause of so many business problems and terminations is merely an example or a symptom of the failure to plan properly. Rapid success can as well kill a business enterprise due to a lack of proper financial management, again which takes us back to basic planning and preparation. Without a road map or a method to keep the business vehicle on target, it really has no place to go but astray or in the wrong direction.

Speed is irrelevant if you are going in the wrong direction. M. Gandhi

You want to run out in front, prepare to be tripped from behind. S.A. Sachs

A business plan is a well thought-out, all encompassing, written evaluation or analysis of your business venture covering every conceivable facet and perspective in concise, and where possible, concrete or empirical terms. It proves that what you are about to do, have done, or may do, that it has substance, merit, and some reasonable degree of probability for success. Without it, you’re just shooting from the hip and hoping for the best. The business is being placed into a reactive posture and will, as a result, always respond defensively to operational and other challenges. In that mode, events and obstacles tend to control the business. One is then managing crises instead of avoiding them. Or stated conversely, the crisis is then managing you!

I was seldom able to see an opportunity until it had ceased to be one. Mark Twain

Although such free wheeling substitutes may appear convenient, especially in the short term, ultimately the results get translated into critical wastes of valuable time, money, and resources. That means that the business is now controlling the owner, instead of vice versa. That equates to real trouble. It is then not a question of whether critical failures may occur, but rather when, how, and/or if irreversible.

The smart thing to do is to expend the energies and time to create an effective business plan and keep it maintained. Be safe and secure in the knowledge at all times that you have a solid handle on where and why a path has been taken with the enterprise.

The business plan is also a multi-functional document as well a process. Through the process, one will discover whole new issues, possibilities, and potential challenges in advance. It becomes an ongoing tool for thinking in focused and cost effective, productive terms for growth and better profitability. The finished product and certainly the executive summary will become essential in acquiring necessary financing, regardless of source. Without timely capital or funding, the business can not grow or prosper. No matter where one might seek that financial support, sophisticated or well informed sources/resources (banks, venture capitalists, angel/private investors, trade/purchase order and receivable financing, real estate financing, etc.) will not give serious consideration to your business needs without written and convincing proof.

That proof, in whole or in part, is your business plan. Good financing opportunities do not just grow on trees to be picked whenever one might deem it convenient. Like your business success, one will have to earn it!

As the old saying goes, there is no free lunch! Plan in advance. If one waits until there is a need, then it is already too late. Wasted time and lack of preparation automatically will lessen the chances of success for that financial support. See also nationally published article at  http://www.ultimatefinancingguide.com/identifying-the-drivers-that-determine-small-business-successes-or-failures/; https://www.linkedin.com/pulse/identifying-drivers-determine-small-business-failures-wollesen

There are no secrets to success. It is the result of PREPARATION, hard work, learning from failure. Colin Powell

(i) Just What Does This Business Plan Feel Like?

A business plan is by definition, the overall road map of your business venture. It encompasses not only where it’s been, but where you expect and want it to go. It must portray an interesting story in concise form on every aspect the business, now and projected forward. It must provide empirical proof or evidence that your past, present, and future are reliably cast and presented.

In the quest for necessary financing, it must not only capture the reader’s immediate interest, but it must also answer with positive assertiveness virtually every question that might arise from a financial or investment source. This writing could very well become the critical link to the business’ existence and success. As with any important part of one’s life, it requires focused effort and time commitment to properly complete.

The good news is that once the basics have been mastered, maintaining and updating or revising the product becomes far easier. It will become an automatic adjunct to the ongoing management decision making processes. In a very real sense, when completed, this writing will become a living work of art. It is meant to be a best seller in every sense of the term.  In all cases, it will be a continuing work in progress – to be modified, revised, or altered depending on any and all changes.

The successful man is the one who finds out what is the matter with his business before his competitors  Roy L. Smith

(ii) Just What Does This Business Plan Look Like?

There is no one format or type of business plan. Every one becomes a one-of-a-kind, tailor made product just for the specific business venture. It will vary in scope and content depending on the enterprise and as well its ultimate primary use. For example, one enterprise may depend heavily on marketing criteria requiring such to be the primary focus throughout, while a government contractor’s version might key to its cost/efficiency models and/or adaptability for a specific agency’s needs and/or internal culture for procurement.

However framed, there are general formats/subjects which every business plan would typically include.

(a) Executive Summary

The executive summary is essentially a condensation of the entire business plan into two pages or less at the very beginning of the business plan. This is probably the most important two (2) pages you will ever create. It is here where one either captures the reader’s imagination, focused curiosity to know and want more, or in the local sports vernacular, the fat lady may be singing – you just won’t be hearing it! It is here that the critical questions get put into context and command the reader’s attention. Why is the venture certain and destined to be successful and profitable to all concerned? Why is this endeavor the best application for this service/product on the entire planet (market share)? Why is this management team not only qualified, but the best suited to take this baby from cradle to the pinnacle of success? If one reads through the lines, one should get the message as a compelling concept – there exists solid management, focused marketing, and probable profitability – most importantly when will this be happening?

(b) Venture Description Including Products/Services 

In a sense, this section, like the executive summary, is a