RESEARCHING YOUR BUSINESS PLANFREE LIBRARY OF PHILADELPHIA

Part III: Researching Your Industry and Financial Plan

In This Class You Will Learn…

Why you should follow industry news and trends

How to follow your industry using library resources

How to most effectively follow your industry online

What is a financial plan and why your business needs one

How to research your financial plan using library resources

Business plans wrap-up

Why follow industry news?

Entrepreneurs are busy enough and dedicating time to following industry trends and news may seem unrealistic.

However, staying informed can provide real benefits, allowing you to…

React well to new trends and upcoming changes

Get out in front of your competition

 

Mini Case Study: Green Business

The impact of environmental awareness on business is everywhere. Entrepreneurs who anticipated the trend were able to position themselves well. For example:

The appliance dealer or window installer who was ready to help customers take advantage of high efficiency and Energy Star tax breaks

The pizza shop offering whole wheat pizza dough and toppings made with organic veggies and free-range animals before the competition

The Caterer who offers to recycle all trash and compost leftovers for a carbon-neutral wedding reception

Staying Informed

At the library: Search for industry and trade articles

using the Business Insights database, which provides full-text articles from over 3,500 periodicals, newsletters and other publications.

Search for other industry and trade articles using the databases Business Abstracts with Full Text and RDS Business and Industry on the Web

Staying Informed

ReferenceUSA OneSource is available on the database page of the library’s website : www.freelibrary.org. Follow the ReferenceUSA link and choose OneSource on the next page.

Refer to your handout “Accessing Electronic Resources From Home,” to learn how to access this resource.

Staying Informed

Using the web effectively: Join a listserv for industry news delivered to

your email (check Yahoo Groups or Google Groups for lists to join).

Consider setting up a Feedly account to get RSS feeds of the most useful sites and blogs

Consider joining Twitter Network with other people and organizations

by becoming active on social networking sites like Facebook or LinkedIn.

Your Financial Plan

“It's at the end of your business plan, but the financial plan section is the section that determines whether or not your business idea is viable, and is a key component in determining whether or not your business plan is going to be able to attract any investment in your business idea.”

-- Susan Ward, “Writing the Business Plan,” About.com

Your Financial Plan

The financial plan takes into account all the costs of doing business on a monthly basis and shows how much money you will need to earn to be profitable.

Your plan should include startup costs and operating expenses.

Your Financial Plan

Startup costs may include: Business registration fees, licensing and permits,

starting inventory, rent deposits, down payments on property and equipment, utility set up fees, etc.

Operating expenses may include: Salaries for yourself and your staff, rent or

mortgage, utilities, raw materials, promotion, loan payments, office supplies, maintenance, etc.

Your Financial Plan

Once you determine your operating expenses, add them up. Multiply by 6 or 12 for a 6 month or one year projection. Add this figure to your startup costs. This is a ballpark figure for what it will cost to get your business off the ground.

Your Financial Plan

The financial plan section of your business plan will include at least three parts.

1. Income Statement2. Cash Flow Projection3. Balance Sheet

To generate this information you will have to estimate what your monthly revenue or sales will be.

Your Financial Plan

Income Statement Revenue – Expenses = Profit/loss for a

particular period of time (usually monthly)

Cash Flow Projection Shows how much cash revenue you receive

and how much you will have to payout with the cash you have on hand in a given month. In other words, if all your bills came due this month, would you be able to pay them? This tells your loan officer whether or not your business is a good credit risk.

Your Financial Plan

Balance Sheet Shows all of your businesses assets and

liabilities for a particular point in time. The Balance Sheet will summarize all

the information found in the Income Statement and Cash Flow Projection. Established businesses usually prepare a balance sheet once a year.

Your Financial Plan

To create the best Financial Plan, look for examples: Read example plans in the Gale Virtual Reference

Library database (refer to slides from Part I of this series for access instructions).

You can also read sample financial ratios in the following reference texts (Visit the Free Library’s Business, Science & Industry Department for access)

Risk Management Association. “Annual Statement Studies: Financial Ratio Benchmarks, 2008-2009”. RMA: Philadelphia. 2009.

Troy, Leo. “Almanac of Business and Industrial Financial Ratios”. CCH: Chicago. 2009.

Your Financial Plan

In addition to industry reports, ReferenceUSA OneSource also contains RMA Annual Statement Studies, which can help you with your Financial Plan.

Your Financial Plan

Ultimately, your financial plan will reflect the seriousness of the work you put into it. Consider speaking with a loan officer and a small business counselor about your plan.

Your financial plan is unique to your business. Library research and librarians will be able to offer only limited assistance.

Business Plan Wrap-up

Your business plan is unique to your business.

No one knows your business as well as you do.

The process of writing your business plan should force you to question your ideas. This process can make your business stronger.

Business Plan Wrap-up

Finding help: SCORE Philadelphia, “Counselors to

America’s Small Business” offers one-on-one business counseling with a professional. www.scorephila.org

Pennsylvania’s Small Business Development Centers offer a variety of services to entrepreneurs including education, workshops, and information on funding. http://pasbdc.org

Business Plan Wrap-up

Slide presentations and handouts from this series of courses are

available online:

http://www.slideshare.net/freelibrarybsi

/tag/business-plans

Contact Us

Free Library of PhiladelphiaBusiness, Science & Industry

Department215-686-5394

erefbsi@freelibrary.org