Would $50,000 be enough to get you started?

How does $50,000 sound to get you off the ground? That's what Mirassou Winery is offering women entrepreneurs if their business plan wins the "Make Your Dreams Come True" contest they're sponsoring. That could buy all the things on my wish list: laptop, printer, virtual assistant, personal masseuse (just kidding, unfortunately)...plus much more. The trick is you have to submit a rockin' business plan by December 15th, so that was incentive enough to get me (and a handful of the Mogulettes!) to sign up to Baruch College's 4-week Bootcamp on how to write them.

Elissa Grossman (that's her in the blue jacket next to yours truly) teaches courses on business management for college students that typically span a whole semester but she's doing an abbreviated version for entrepreneurs, starting with the elements of a business plan, which she covered in the first session, along with great examples of what an executive smmary should and shouldn't look like.

The second class was focused on the marketing plan, which is all about information gathering - where to get data about your target market, what the benefits and limitations are to different types of research, how to conduct surveys (one place to try out is surveymonkey.com, where you get the first 10 questions in a survey free), how to scope out your competition. Then she moved on to narrowing down your target market and selecting a marketing mix to reach them.

The third class centered around money - how much you need vs how much you want. This part was cool - Elissa recommends shutting your eyes and imagining the process that's involved in making a sale. Then make an outline of that in order to come up with a list of costs, like how much will the virtual assistant cost, plus the web developer, plus the computer, the desk and the chair, the masseuse (no...just kidding again) and so on, for each task. How much will be variable, or fixed? All this will help in coming up with a price for your goods and services. But that's not all that determines price - there's the perceived value (you can charge a premium for goods that are new in the market, or are complex, or where price comparisons are difficult). Competition also plays a role, as does strategy, like special pricing promotions that you might do.

The second half of the class was about sales forecasting and breakeven analysis, which I won't even attempt to summarize. But she made it interesting by giving lots of real life examples of how companies used these numbers to make adjustments and run their operations more efficiently.

BTW, Elissa's available if you'd like feedback on your business plan, as are other counselors on staff at Baruch's Field Center. These services are offered for free.

So, sharpen up your pencils and put your fabulous ideas on paper...you could win 50,000 big ones! Like they say: you gotta be in it to win it...

Next week I'll be away on a short vacation to Paris, yes, the "city of lights"! My friend invited me to stay with her and I'm using my miles to get there, so it's a great deal. Stay tuned for my report on how the French do business - I expect to be doing heavy duty research into their chocolate industry. Au revoir!

Creating a Budget

Do you ever daydream about new gadgets or office equipment you'd like to own if you had extra cash? Here's my what's on my wish list: a new laptop, a new printer, a new desk and a matching bookshelf to go with it. Even though I'm clearly convinced I really need all these things for my business and I'm picturing how great my home office would look if I had them, according to Padma Vaidyanathan, a CPA who offers tax advice and preparation to small businesses, I need to hold off on buying high ticket items. She advises clients to wait two years before making major purchases, or at least until they're making money. (Aaargh! Delaying gratification is not one of my strong points...). But Padma does offer an alternative: "Be creative! Try to borrow, barter, shop around, buy used. And keep in mind that it won't be forever."

Having a clear idea of what our expenses will be is also known as a budgeting (I use Quicken for this but there's also MS Money. Another good resource is MetLife's webpage on Creating a Budget). Padma gave us a tutorial on creating budgets during her visit with the Mogulettes this week (listen to a quick summary by clicking below).



She suggests starting with your fixed expenditures first. Those are items you need in order to live and ones that don't change every month, like rent, health insurance and utilities. From there it gets a little tricky because you'll need to keep tabs on how much you spend for things like entertainment, groceries, clothing, etc. Compile at least one month's data so you'll have an idea what to estimate for each category. Once you know how much you spend, you'll know how much your business has to make in order to cover your expenses.

As for startup costs (my wishlist above falls under this category) keep those separate. Figure out which ones will be one-time expenses and which will be recurring. And keep them low - we need to stay as lean and mean as possible in the beginning! (Anybody have a used laptop they'd like to donate to a good cause? See me!)

Padma's other Do's and Don'ts:

• Don't be quick to incorporate or do a DBA ("Doing Business As"). Use your own name at first until you get a better idea of what the focus of your business will be.
  
  
• Do open up a separate business bank account. Figure out how much you think you'll need (see above) and either "lend" yourself the money or borrow it and place it in the account.
  
  
• Many banks won't give out corporate credit cards to startups, so another option is to designate a regular credit card only for business transactions, that way you won't go crazy looking through receipts come tax time.
  
  
• Analyze your business expenses. Ask yourself: What's working? What's not?
  
  
• Stay on top of collections. Use Quickbooks to invoice clients, and mark bills "due upon receipt". It's okay to charge a finance fee and/or late fee.

Did I miss anything? Please add any tips or links of your own!