{"id":28237,"date":"2017-01-12T16:18:53","date_gmt":"2017-01-12T21:18:53","guid":{"rendered":"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/2017\/01\/good-business-plans-reasonable-expectations-are-important-facets-of-starting-a-business.html"},"modified":"2017-11-08T11:00:01","modified_gmt":"2017-11-08T16:00:01","slug":"good-business-plans-reasonable-expectations-are-important-facets-of-starting-a-business","status":"publish","type":"post","link":"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/2017\/01\/good-business-plans-reasonable-expectations-are-important-facets-of-starting-a-business\/","title":{"rendered":"Good Business Plans, Reasonable Expectations Are Important Facets Of Starting A Business"},"content":{"rendered":"
\n
\n\"business\n<\/div>\n
\nJohn Crawford of JP Crawford Associates in Queensbury describes himself as a coach, rather than a consultant, in that he educates and works alongside business owners and managers.<\/p>\n

Courtesy JP Crawford Associates\n<\/p><\/div>\n<\/div>\n

\nBy Susan E. Campbell\n<\/div>\n

What determines whether a start-up flies or fails? A well thought-out business plan, reasonable expectations and enough capital to get through some down times are key factors, say some experts.<\/p>\n

“To secure a start-up business loan, the lender requires the principals to provide a written plan,” said Paul Dowen, CPA, partner at Whittemore, Dowen & Ricciardelli, LLP (WDR) of Queensbury and Saratoga Springs.<\/p>\n

This need not be a formal 40-page document, but must provide research and details about what the company will need for its initial capitalization, he said.<\/p>\n

“It should address, how long will it take me to make the first sale? What are my expenses and debts? Who are my customers going to be? Am I targeting the right markets? How will I attract customers? If I think I can make $100,000 in sales the first year, how will the business get there month to month?” Dowen said.<\/p>\n

These are probing questions WDR’s consultants ask their clients. The answers inform the plan, and the plan not only launches the business but also helps to keep it on a successful course.<\/p>\n

“I had been talking to one client in the beverage industry for a full hour when I asked, how long will it take you to sell this product?” said Dowen. “His answer was 18 months, although his business plan showed sales posting in month six.”<\/p>\n

“Facilitating a business plan is a process that makes business owners think,” said William Brigham, director of the Small Business Development Center affiliated with University of Albany’s School of Business.
\nThe center serves as a public agency, offering no-cost consultation and training for companies and individuals around 11 cities in the Capital Region. About 1,300 individuals a year use these services from its 24 centers in New York state.<\/p>\n

The initial business plan should dedicate a hefty amount of space to marketing, according to John Crawford of Queensbury-based JP Crawford\u00c2 Associates.\u00c2 “It shows how thorough the business owner has been doing research.”<\/p>\n

“I may ask, who is your target market, and if the client says ‘everybody,’ I know they’re lost,” said Crawford. “I help them niche-market to control resources and then expand on the plan next year.”<\/p>\n

Crawford said marketing plans “are not locked in concrete because the direction can and should change at times.”<\/p>\n

He coaches clients to help them differentiate themselves from the competition, explaining techniques such as social media and print media, and showing how to measure results. Crawford describes himself as a coach, rather than a consultant, in that he “educates and works alongside the business owner or manager.”<\/p>\n

“If the marketing isn’t working, analyze it,” Crawford said. “But if it took off, also know why that has happened. Collect and analyze all the data so you know where to put your time and budget.”<\/p>\n

Under-capitalization is a sure route to failure, say these experts, and is related to planning and financial projections. Either there were inadequate resources to start with, or sales did not happen as forecast, or expenses were underestimated, or a combination of the three.<\/p>\n

“You have to ask yourself, if I have cash flow issues, how am I going to sustain myself on the personal side as my business gears up,” said Dowen.<\/p>\n

Some tap into savings and retirement plans, often paying income taxes and hefty penalties to access their money, Brigham said.<\/p>\n

“There is no turning back from that, and some later say it was a big mistake” to liquidate retirement assets, he said. “They get enthusiastic and feel there is no way their new business can fail.”<\/p>\n

Excitement about your product or service may be the first catalyst for success, but Brigham has a more realistic approach in mind.<\/p>\n

“The solution is to write an ultra-conservative estimate of the capital needed,” said Brigham. “It’s very difficult to go back to the bank once you’ve said what you are going to do. I’m not a believer in reparational writing.”<\/p>\n

“Writing a business plan is about making the best estimates you can,” said Dowen. “Unfortunately, once the plan is written, many business owners never look at its pages again. You need to go back and analyze when has happened.”<\/p>\n

Brigham concurred. “Problems occur when people circumvent the planning process,” he said. “We discuss with them the need for plans and projections, but they don’t want to do the work.”<\/p>\n

“Any business plan has line items to perform, but the implementer may not know how do so some of the tasks,” said Crawford. “That’s where the professionals come in.”<\/p>\n

For example, how to conduct a company meeting. Crawford said, “you can’t just read a book or a chapter and know how to have a company meeting.”<\/p>\n

Crawford said he helps “come up with a game plan, do an agenda, decide on the frequency or meetings and discuss what they will talk about,” he said.<\/p>\n

“Employee meetings are so important to business success that these should be written into the business plan,” Crawford said.<\/p>\n

Crawford said some who have been in business for years have never had a company meeting, but he educates them on their importance by reflecting on the company culture.<\/p>\n

“As a coach, I help business establish a culture of the business and communicate it,” he said. “What do they want their business to be like? Do you want to be a dictator or help employees work alongside you?”<\/p>\n

Most new businesses start with a really good idea.<\/p>\n

“But knowledge of the industry, its customers and competitors are also needed, along with basic accounting and bookkeeping,” said Brigham.<\/p>\n

“WDR helps clients get set up on some basic accounting software by wading through the charts and screens the client needs to track expenses and sales,” said Dowen. “If not set up correctly, the owner will never have the correct information about what their business is doing.”<\/p>\n

The problem is how to post the data.<\/p>\n

“Users are not coached. There’s no manual for this,” said Dowen.\u00c2 “The system looks overwhelming and perhaps the job goes undone.”<\/p>\n

Consequently, certain administrative functions, especially human resources, payroll and bookkeeping, are often best outsourced, freeing the business owner to do what he or she does best: run the company.<\/p>\n

Alternatively, Dowen said, “If you are lacking in a function, bring on a partner to do it.”<\/p>\n

“Each individual needs to ask, am I being reasonable about what I need to do as a business owner,” said Dowen. “For example, if I’m doing payroll instead of selling, will I get behind? If I get behind in paying my sales tax, there will be a big penalty.”<\/p>\n

There are other legal aspects to consider. When filing for an employer identification number or EIN, Dowen says, “you have to know what you’re applying for.”<\/p>\n

How you complete the form will determine the nature and timing of future filings. Check the wrong box, and the federal government will look for reporting on employees you don’t have yet. Or you may have a legal business entity that may have served your company better as a different form.<\/p>\n

“You need to be real savvy to read and do it all,” said Dowen. “Getting professional advice can save you money in the long run.”<\/p>\n

The Small Business Development Center offers intense courses the are part of the Center’s micro loan funding program that can give a business owner up to $35,000, if qualified.<\/p>\n

“The goal is to lower their risk of default,” said Brigham. “They may not ultimately receive the loan, but the training is very valuable in getting otherwise ‘unbankable entrepreneurs’ who have no cash, credit or collateral up to speed.”<\/p>\n","protected":false},"excerpt":{"rendered":"

John Crawford of JP Crawford Associates in Queensbury describes himself as a coach, rather than a consultant, in that he educates and works alongside business owners and managers. Courtesy JP Crawford Associates By Susan E. 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