How to Prepare a Business Plan and Secure Financing
A frightening statistic: over 60% of all new businesses and over 90% of all new restaurants do not last five years! Entrepreneurs dream, but unfortunately many of their dreams become nightmares. However, the proper use of a well-documented business plan can create, sustain, and enhance the possibilities for a small business.
Tax planning is fire prevention while tax preparation is arson investigation. While the preparation of a tax return documents a taxpayer’s tax history, a business plan can help turn a client’s dream into reality.
The IRS defines a business as an activity engaged into with the expectation of making a profit, a tax plan makes up the major part of a business plan. In numerous Tax Court cases the court has overruled a “hobby” determination, because the taxpayer had a business plan.
Stu Sobel has substantial experience in taxation and business planning. He taught entrepreneurship classes for 12 years as a member of the adjunct faculty at Indiana University. He also served for more than 20 years as a counselor for SCORE, the volunteer arm of the U.S. Small Business Administration, where he assisted thousands of new businesses.
- Understanding your client and the type of business
- Doing market research and analyzing competition
- Developing the human resources plan for the business
- Delineating the product or service line
- Identifying the proper form of business organization – sole proprietorship, LLC, C corporation, S corporation, or other
- Financial projections for three to five years
- Acquisition of small business financing
- Advertising, promotion, and social media
- Employees or independent contractors
- Use of available business plan creation software
- Translating the dreams to the words of a plan and then
- Moving the plan to the dollars of a budget
- Understand your clients and the trades or businesses they are involved with
- Avoid small business financing mistakes
- Improve tax planning techniques for future activities
- Expand knowledge into many of the areas that are essential for a successful business
- Utilize software that is beneficial for business plan preparation
CPE credit: 2 hours