ATLANTA BUSINESS PLANS
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New Business Start-Up Errors and Oversights {Plan, Plan, Plan!}

In all of my years as a business plan writer in Atlanta, I have noticed some common errors made by people starting a business. These errors account for the reason why between 80% to 90% of new businesses fail in the first five years. The number one reason per the Small Business Administration (S.B.A.) is because they run out of money. The number two reason quoted by various sources is due to lack of proper business planning. If you do your business plan properly, you will know how much funding you will need so that you will not run out of money. I know this is true, because I always ask a new business plan client how much start-up cash they think they will need. By the same percentage as the failures, the client usually drastically underestimates the amount of start-up cash that is required, where often the actual amount required is double their original estimate (or more).

Our Atlanta business plan service takes these things into consideration. Here are some of the common business plan errors made by entrepreneurs trying to get a new business funded or other errors they make getting a new business started:

• Lack of logic in the development of your numbers: If your business plan does not have logic in the development of your revenues and expenses, you will not get funded. You must break down your sales and expenses on what is called a “unit” basis: What does one unit sell for and how much does one unit cost? Then, how many units are you going to sell each month? Are the unit sales per month reasonable?  We not only "write business plans" but we help guide you into developing these figures.
• Lack of accounting for variables in your business plan: Most companies do not “hit the ground running” when they open the doors. Even though you expect to sell 1,000 widgets per month, it will probably take you some time to get sales to this level. Allow for ramp-up time, usually over several months. I often allow for one year or more (minimum of 6 months) for clients to get up to selling capacity, unless other logics prevail. We write business plans that help with this.
• Do not skimp or ignore up front marketing and advertising: So many new start-ups think that once they open the doors, customers will come! Sadly, when they ignore the up-front marketing and advertising, they learn the hard way that they missed a critical step. Because so many businesses depend on referral business from existing clients, there is a compounding effect that is missed if you ignore this area at start-up.
• Do your research on the major purchases and expenses you need up front: I am amazed by how many clients have not done an in-depth look at the cost of opening an office. They often forget about minor details such as office furniture, computers, telephone systems, signage, alarm systems, etc. They also don’t consider the fact that landlords often have build-out expenses of the new rental space that they often pass on some or all of it to you. They also usually require a first and last month’s rent in advance. There are also usually utility and phone deposits required up front.
• Allowances for Accounts Receivables and Payables:If you deal with inventory, how much will you need to purchase up front before you open your doors? How long will it take to collect your money from your customers? Will you have to pay for labor, materials, shipping, etc. up front for a customer that you must invoice and wait 30 to 45 days for payment? These factors add significant costs up front and can sink your boat very quickly.
• Don’t forget to include a salary for you in your business plan: All too often, people go to the bank for funding, telling them that they are going to leave their former place of employment and start this new business. When the bank sees that you have eliminated a major source of personal income and have not replaced it with income from the new business, they do not see your capacity to pay back the loan if the business fails.  Our professional business plan service takes this into consideration and helps with the numbers.
• Don’t expect to capture a major market share or even make a profit in the first year: These two items are usually looked at as being unreasonable in the eyes of a banker or investor and will actually be red flags on your small business plan. You do not want a business plan that is often referred to as being “pie in the sky”. If it looks too good to be true, it probably is!
• Back up your numbers with actual quotes for products, services and equipment: Where possible, back up the numbers you put in your business plan with actual quotes from service providers for services, equipment, products and services. This will give a comfort level to the banker or investor that these are real numbers instead of the “pie in the sky” numbers referred to above. I know of some banks that have a normal policy of discounting down business plans by 25% due to the above unless you back up the numbers. Our business plan writing takes all this into consideration.
• Don’t get your funding and put your business plan up on the shelf: Your business plan should be your operating guide for the first three years! Enter the business plan numbers into your accounting software as your budget for each year and then compare your actual results to your budget! I have many business plan clients that update their business plan every year.
• Choose your operating entity wisely  :If you will be exposed to potential liabilities, you need to incorporate or form an L.L.C. Work with your tax advisor to make sure you are protected. You want to build a wall between your personal assets and the company’s assets. Our Business Plan writing service can help you with getting setup correctly.