Business Plan Tag

Crisis Averted: 11 Steps to Help Your Business Survive and Thrive

Russ Hall, Action CoachExperienced business brokers know that there’s sometimes a gap between when a business owner wants to sell their business and actually having a business prepared to sell.

The Georgia Association of Business Brokers held its March 31 meeting online with more than 60 participants.

If you missed the meeting, you can view the recording here.

Business coach Russ Hall, our guest speaker, came to us using the Zoom virtual meeting platform. Mr. Hall offered advice on how small business owners can weather the current economic and health crisis. GABB affiliate and attorney Wendy Kraby talked about how loan closings are happening online,  and SBA lenders discussed SBA loans available during the crisis and loan extension options.

The presentation from Russ’s excellent webinar, Crisis Averted,: 11 Steps To Help Your Business Survive and Thrive, is linked here: CRISIS AVERTED Webinar by Russ Hall for GABB

Since 2003, Mr. Hall has been a part of ActionCOACH, a global organization that helps the owners and teams of small businesses improve performance so that they can improve their lives. He spent his first seven years after university as a US Naval Aviator, and he piloted SH-3 Sea King anti-submarine warfare helicopters. He also spent 21 years with a Fortune 100 company in the Healthcare Technology sector, leading and managing national award-winning teams in Sales and Customer Service for most of that time. As a part of his development as a coach, he earned a Master’s in Industrial-Organizational Psychology from the University of Georgia. 

For more information about the GABB, contact GABB President Dean Burnette at dean@b3brokers.com or (912) 247-3209; or contact GABB Executive Director Diane Loupe at georgiabusinessbrokers@gmail.com.

GABB meetings are free and open to the public. If you are not a member and wish to attend a meeting, please fill out this form.

How to Create a Business Plan

If you’re hoping to borrow money to buy or start a business, you’ll probably need a business plan.

A business plan, which projects 3-5 years ahead, is your road map for your business. It outlines how a company plans to reach yearly milestones, including revenue projections. A well-thought-out plan also helps a business focus on its key elements and helps the owner make good decisions, according to the Small Business Administration.

Serial entrepreneur Alejandro Cremades, author of The Art of Startup Fundraising, says you “should have a plan in order to get yourself organized, to ensure you have some type of viable commercial potential, you have focus and hopefully aren’t going to run out of money or starve before you get going.”

The SBA’s Business Plan Tool is a free resource that guides you step-by-step to create the plan. Not only can you save your plan as a PDF file, you can also update it at any time, making this a living plan to which you can often refer. You can also use your completed business plan to discuss next steps with a mentor or counselor from an SBA resource partner such as SCORE, a Small Business Development Center (SBDC) or a Women’s Business Center (WBC).

All of your information entered into this tool can only be viewed by accessing your account using the password you have specified.

You can complete each section of SBA’s Business Plan Tool at your own pace, save your work at any time and pick up where you left off the next time you log into the tool. Your information will be saved for up to six months after your last login date.

Writing for Forbes, Cremades says that traditional business plans can be massive, expensive, time-consuming projects. If “you don’t plan to raise money, apply for loans and don’t intend on bringing in partners, then you certainly don’t need a 25lb manuscript. Keep it simple.” Brian Chesky, founder of Airbnb, is famous for his one-page business plan for global domination.

Harvard Business Review (HBR) says some business plans “end up nothing more than a fable.” That because HBR says “the real key to succeeding in business is being flexible and responsive to opportunities. Entrepreneurs often have to pivot their business once it becomes clear that their original customer is not the right customer, or when it turns out that their product or service fits better in an alternate market.”

HBR also wrote that:

• The “most successful entrepreneurs were those that wrote their business plan between 6-12 months after deciding to start a business. Stating that this “increased the probability of venture viability success by 8%.”
• Chances of success rose by 12% for those that spent no longer than three months on their plan. Spending more time than that was futile.
• Startups chances of venture viability rose by 27% if the plan was created at the same time that founders were talking to customers and preparing marketing.

According to Entrepreneur.com and Rule’s Book of Business Plans for Startups, founders should be considering these factors when creating their plan.

• How the business will be vested
• Main objectives
• Mission statement
• Keys to success
• Industry analysis
• Market analysis
• Competitor analysis
• Core strategies
• Marketing plans
• Management
• Organizational structure
• Key operations
• Projections and pro formas
• Break-even analysis
• Financial needs

SCORE, an SBA partner that provides free business mentoring and education, offers templates with instructions for each section of the business plan, followed by worksheets.

• Executive Summary
• Company Description
• Products and Services
• Marketing Plan
• Operational Plan
• Management & Organization
• Startup Expenses & Capitalization
• Financial Plan
• Appendices

For more help with getting business financing, consult one of the GABB’s professional SBA lenders who can advise you on what you need to get funding for your business.

Ten things a business broker needs to know to get financing

10 Things a Business Broker Needs to Know
Presented by Susan Kite, VP, SBA Business Development Officer
Signature Bank

6065 Roswell Road, Suite 600
Atlanta GA 30328
770-595-9734

1. We can’t process your deal until we have:

Seller Provides:
1. Last 3 years Business Tax Returns
2. Signed 4506 T
3. Recent Interim Business Financial Statement (not > 45 days old)
4. Aging of Accounts Receivable
5. Aging of Accounts Payable
6. List of Assets being sold with Serial Numbers for items valued > $5K

Buyer Provides:
1. Last 3 years Personal Tax Returns for all 20% or more owners
2. Last 3 years Business Tax Returns for all affiliate businesses
3. Personal Financial Statements
4. Business Plan with Financial Projections
5. SBA Application Form

2. Your buyer needs cash in the deal
• Amount needed is up to the lender (typically 10% minimum)
• 25% is required if amount of goodwill financed is over $500K
• Can be shared with Seller in form of Standby Note
• Equity can be buyer’s cash on hand, a gift supported by a gift letter, personal loan or heloc, or assets other than cash
• Equity must be supported by 2 months of statements, or outside appraisal

3. Your buyer needs a well thought out Business Plan

A good resource is the U.S. Small Business Administration’s guide to writing a business plan.

The SBA also provides a good template for writing a business plan.

A more in-depth guide is here.

4. The Business Plan must include financial projections
• On a monthly basis for the first year, and
• On an annual basis for years 1 – 3
• Must include Notes as to how the numbers were arrived

5. Your buyer must clearly articulate how their background and experience will directly translate into successful ownership of the particular business they are buying.

6. Buyer cannot be incarcerated, on probation, parole, under indictment for a felony or a crime of moral turpitude, or who are presently subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction.

7. Buyers must be lawfully in the U.S.

8. For loans in excess of $350,000, SBA requires that the lender collateralize the loan to the maximum extent possible up to the loan amount. If fixed assets do not fully secure the loan, the lender must take available equity in the personal real estate of the principals as collateral.

9. Seller should be prepared to take back a Note
• Generally strengthens the deal
• Helps compensate for collateral shortfall
• May be needed for equity; if so, SBA counts it as equity if it is a
* Standby Note with no payments for the life of the SBA loan
* Standby Note with interest-only payments IF the historic business cash flow shows debt service coverage
* Standby Note with no payments for the first 2 years IF used as part of the 25% equity required when goodwill is over $500K

10. If the amount of goodwill financed by lender and seller is over $250K, a professional business valuation must be performed.

Susan Kite
VP, SBA Business Development Officer
Signature Bank
6065 Roswell Road, Suite 600
Atlanta GA 30328
770-595-9734
Visit us at: www.sbaloansatlanta.com
and: www.signaturebankga.com

Full PowerPoint Presentation. Signature Bank GABB Presentation