How to Write a Professional Business Plan | Shane Kluiter | Skillshare

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How to Write a Professional Business Plan

teacher avatar Shane Kluiter, Knowledge is Power

Watch this class and thousands more

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Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

10 Lessons (46m)
    • 1. Introduction Video

      7:16
    • 2. 1 Executive Summary, Keys to Success

      2:44
    • 3. 2 Mission Statement, Vision, Culture

      2:54
    • 4. 3 Company Summary

      3:00
    • 5. 4 Market Analysis

      4:05
    • 6. 5 Strategy and Implementation

      4:32
    • 7. 6 Management and Operations Summary

      5:01
    • 8. 7 Important Assumptions

      3:35
    • 9. 8 Funding and Exit Strategy

      3:45
    • 10. Types of businesses

      8:56
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About This Class

In this course you will learn how to write a business plan. Key points of research will be laid out so that you are able to develop a strategy and clearly lay out a full plan for your business. You will be given an outline to follow for formatting to ensure that you do not miss any important parts of your business plan. Included in this course is also a PDF example of a business plan for you to reference.

What you'll learn

  • After taking this course students will be able to write out a clear and concise business plan that is properly formatted and easily presentable. This will include a budget, startup plan, and all the information needed to start the business.
  • Step-by-step walk-through for each section of a business plan
  • Save money by not hiring an outside consultant to write your business plan for you
  • Create an actionable Executive Summary
  • Evaluate your businesses financials
  • Evaluate your break even point
  • Build a long term plan for your business
  • Learn practical skills on how to write each main component of a Business Plan
  • Learn about each main component of a Business Plan including Executive Summary, Marketing Analysis, Marketing and Sales, and Financial Projections

Requirements

  • This requires no knowledge. If you have Microsoft word or access to Google Doc's you will be able to utilize the included documents. If not, you will be able to reference the PDF example included.

Who this course is for:

  • First time business owners, entrepreneurs, business owners looking to write out a plan to secure funding.
  • New entrepreneurs
  • New business owners
  • Existing business owners who want to learn how to create a plan to scale their businesses
  • Anyone looking for a foundation to build their plan to move from being an employee to an entrepreneur

#entrepreneur #entrepreneurship #successmindset #success #mindset #business #learn #onlinelearning #skillshare @skillshare

Meet Your Teacher

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Shane Kluiter

Knowledge is Power

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Transcripts

1. Introduction Video: hello and welcome to how to write a professional business plan. My name is Shane Kleiner. I'll be your instructor for this course. In this course, we will be discussing not only why you would want to write a business plan, how to do it but the benefits of actually following through with it and then keeping it around or the future. So why write a business plan? Those who fail to plan plan to fail, attributed to Benjamin Franklin. What that means is, if you're not making a plan in setting goals for where you want to get to and what you want achieve in life, what's gonna happen is you're gonna go on this meandering path, gonna go left for a while, you know, right For a while, at the end of the day, it's very easy to end up back where you started. We have a clear outlook on the future. If you have goals that are displayed, ID be doing analysis to figure out if what you're talking about is achievable. You have a much higher plant, a much higher chance of success. This is also so you have a working document to remind you this is what we do. This how we do it. This is why we do it. This is where the company's head in the future. That's something. A lot of small businesses or it's, and some even larger businesses don't have so parts of business point. We're gonna start over the next 60 of summary moving to objectives and our keys to success summary is just going to summarize very briefly what's in the document. Our he's to success are going to be what we know we need to do to achieve success or to cover a mission. Vision our culture. What we wanna have things laid out as what we believe is a company, that kind of people. We want to be in the kind of people we want to work with whenever a company summary going to define the ownership. So there's multiple owners or not define who owns how much of the company what are their roles in the company? What if they give in to the company financially? They're startup, someone we talk about. Our start up costs were gonna go from top to bottom on their company. We're going to say how much is land or How much is rent? How much is product? How much is our initial start up costs? How much do we need to spend before we can make a dollar? In many cases, you have to spend thousands of dollars before you can make $1 worth of sales because there's a lot of start up costs and beginning and it's a very front loaded process to start a business, we're going to move into a market analysis we're gonna go for through our market segmentation, target markets, industry analysis. We're gonna look at how we're actually gonna break these down where we fit in the industry who were competitors are so that we know when we go into this, what our place in the market is who were targeting and how we're gonna go after them. So our strategy and implementation summary is gonna go even deeper into that, and it's going to say these are products. These are the kind of products we focus on. This is our competitive edge with our products referencing the marketing plan, saying, because of this, our product will be able to do this and we can create are going to market strategy and our sales strategy around that. Now the next section is going to be about management and personnel. So and we will define management whose management water management roles were authority they have. Our personnel problem is going to be. If we have staff were hiring what this staff does, how much it's gonna make our physical location. I always like to list it. So even if you're starting something in your basement, put that and we're going to start in the basement. Were to stay in the basement till we hit X amount of sales or to stay in the basement, tell you x amount of profit, inventory, production and quality. Talk about your inventory. Talk about how it's gonna be produced. Talk about the quality of it. Sometimes people start businesses with products they know are very low quality, and they do that because of cost. And they do that to fill a need in the market because there isn't need in the market for very cheap, low quality versions of pretty much everything. We're gonna list all the assumptions that we're making. We're gonna create a break even analysis so that we can see how much it costs to start the company how long it should take us, based on our assumptions to pay that, pay that back and make it so that the company becomes profitable and we're gonna do a projected profits and losses. Based on that idea, How many months were we basically gonna be taking losses? We're gonna move into our funding strategy, our exit strategy just in case it fails on our milestones. In the section we're in A look at how you can get funding. We're gonna look at how you would write out a funding request and how we're gonna end up actually having a document that you could and two event because this is the type of document you could hand to a bank and say This is our business plan. We would like to get alone. You're gonna have to either personally back that or build a business credit. First Harbor. You know, when we look at loans and financing, that's part of the purpose of all this. So you might be getting alone. And that's when you know all this information in Another reason for this is because you wanna have something physical you can look at and say when things get hard and I don't know what to do. This is my plan. This is what I need to dio and you can adjust. This plant was malleable. Your meal will say we can adjust us the future. So if the markets leaning towards a different product or similar product, we can adjust to that. I want to be able to pivot and move what you want to stay in the same similar kind of market. You don't want to go from selling all women's close to selling all men's clothes overnight . You might do mix a bowl, but this we want to know our plan for the future, where we are now, where we do it, we want where we want to be and how do we get there? And an example is provided in the documents for this course, and it will be referenced in later videos provided business practice for a small business start out of someone's home. This business plan that I wrote and I polished with my inspiration professors was in college. I've gone back and they've added more to, and I've gone over it with other entrepreneurs and business owners just kind of as a starting point to kind of build a base document for an idea of what your first business plan might look like. You have something to work off of? We're gonna reference it a little bit in this presentation. All right, look forward to speaking with you. The next lesson. 2. 1 Executive Summary, Keys to Success: Welcome back in this part of the course, we're gonna go over the executive summary injections in the keys to success. So in these parts, you're going to write out some rage business planets. Once you paragraphs that just define what will be cover inside the document. And what that might look like is something somewhere to effective in this document, we're going to cover the owners their roles. We're going to cover our go to market strategy with a one sentence summary, one sentence of the product, one sentence of recall of a goal. Just a brief, quick overview. So if I picked this up, I could look at and say, OK, great. This is what the This is what the restless about, We're putting our objectives. We put the stores the beginning of the document because it's not just to the objectives of a company, part of it's the objectives of the document. So if we want to display revenue goals, profit goals, and display that we have a goal of proving that we can actually meet those in this document and we're gonna list the keys to our success, this is usually a lister. Bullet points. Ah, sentences. You can do tiny progress if you really wanted to, but this is just a list of the things that need to happen for your business to be successful. It's a focus on key events, any part of the business that has to happen to be successful now. One thing to say about this is if you have too many, uh, key parts to your business. If one little thing goes wrong, you're not gonna be successful. Say you have five things that you need to do to get to make your business successful. You know that. Is that a realistic thing for you to do with the manpower you have? If you're going to devote eight hours a day, Are these five things management in that eight hours? If you're going to start a side business and manage it for to the three hours a day or maybe one hour a day or these five things realistic, uh, I prefer to keep the keys to my success relatively low. How many things are really gonna affect my success if we can focus on just a few things we can discover making X amount of phone calls gonna lead to x amount of sales in a day with our business than we know. Okay, The heat. Our success is making this money phone calls to get this money sales so the company can grow. That's a brief overview of the first part. I broken this up into eight parts from here on, so we will start 2.0, in the next video. 3. 2 Mission Statement, Vision, Culture: that's part we're gonna get into is our mission statement, the vision and culture that we want to create and cultivate. So our mission statement, it's very simple. It's just some way to give a clear, concise view of the company, and its purpose is gonna help sheep, your vision aligned with your goals and hero populated just a few examples. So when I really like is the Window Boyer project, their mission is to honor and empower wounded warriors. It's very simple. It's very short, concise. It tells you what they want to dio. You want to create that same kind of statement for your company? Say this is our purpose. So if you were a software company, we were reselling a type of software you might say Our purpose is to help marketers better manage their email marketing, using the software, whatever the software is that you saw. Or you might say that our mission is to provide training for your employees training for employees if you are a trainer so that you can better convey what you wanna have said about your company. So if someone asked you, what does your company do in one sentence? Boom mission statement. This is what we dio. Well, now parts of a mission statement are said. Who are we? What do we do? Why do we do it? Combined these we're gonna form a formal summary of values and aims of the organisation? No, that that we won't talk about our vision as an example. The number one outsourced I t company in Grand Rapids in the next five years. It's an aggressive statement. It's a view for the future of the company. That's what we want to create here. Where do we see the company? In five years? Our vision is to get to their kind of a culture we gonna cultivate. So maybe we want to try to be a hip tech company. Maybe we want to be a professional services company. Maybe you were gonna start a financial services company, At which point we might want to think the culture we need tohave our culture. People who are going toe wear a shirt and tie. We're gonna be very stringent on time. Different types of companies create different kinds of culture, and it's very easy to create a bad culture without having a definition of where you're going right. This was a short module. The next module we get into is going to be the company's summary, so I will see you there. 4. 3 Company Summary: I'm gonna talk about parts Where your company's summary. How many? Somebody is just a detailed description of the company and how we operate or explained how revenue will be generated. We may even want to go in depth and say what we're going to do specifically with that revenue. How much? What percent of our revenue is going to go towards which parts of the company? Well, how much ghost wars researching your products? How much is are we gonna allocate towards paying employees bonuses? Monitoring the website we're gonna talk about. We might talk about percentage wise there, what we're gonna do with the money, Um, our company ownership. And this is a big part, especially. You have multiple owners. If you have one, owner might just be this own. This is owned by Rufus Rains. That's a But if you have multiple owners, you might want to add a further sections like a 3.1 point one below the 3.1, just to explain the ownership roles and kind of who is responsible for what. So if you have four owners, each owner's gonna have a role in the company, and you wanna have those rules politico find so that later on, if someone's not fulfilling their role, if someone's just flat out not working you have this document to say, Hey, we all filled this out together. This is what you said you were gonna dio. This is where we need to be as a company because if you don't have clearly defined roles in a partnership, it's very easy to slip. I'm kind of fall by the wayside. No, we're going to Ah, quick startup summary as well. And this is gonna be summary of all their start up costs. It's best shown with tables, graphs sometimes. And you want to make sure you're clearly showing all of your data. No example of that. Is this right here? So we have our startup summary here. We have listed the cost of the website and the work we're gonna have done on it. The advertising are beginning inventory supplies that we're gonna need the registration fees for the company and legal set up fees. England. As this example goes, the total comes to $9950. So with these costs, we could even go down into breaking down what each of these defined is all right. So what you want to do is you want to say how Maney parts do wanted to label out for how much everything's in a cause was day one. You want to know how much money you have to spend to take this business from nothing to something viable is a business where you can start to bring in that revenue to get your profit supple. And in the next module, we're going to go over market analysis. I'll see you there. 5. 4 Market Analysis : welcome back the sexual intolerable, the market analysis portion of the business plan. So in this, we're gonna start with a market analysis summary. That's just a quick overview of the market section. Talk about what our price points or other companies doing in our space, the demographics of our competitors in the section and specifically, we also want to find all of the data that we're gonna need to derive our own market segmentation and choose out who we want to target. So market segmentation. Which part of the market are we going after? We want to find some statistics, if we can, that are going to support our position. So we don't want to start selling something to a demographic that has 1000 people in the United States. No, that's not a big enough market. Most products We don't want to sell something to a demographic that might not be easily marketable. To overlook product it we want to sell. So, for instance, if you want to sell products online, Facebook ads are really too good to use. But if there's not a way for us to target our market with Facebook ads or to get to turning our markets through advertising on specific blog's solve, maybe a condition that we want to help with. Maybe that's not the best route for us targeting our market. We're going to focus on the specific segmentation and were clearly defined our customer base that we're going after. So as our company develops, we might change our target market based on where the sales are kind of leading us. And that's how companies general run you go towards where you have more sales. Two examples of the target market. Just his quick sentences. Grandparents who live more than 100 miles away from their grandchildren. Single fathers live outside the home of their dollars women between the ages of 25 35 Corp . Right now we're expecting to become pregnant as well as young mothers, you know, as from examine our industry, we're gonna see how many other companies can we find doing what we do intermittent who we want to target. You know how much competition is there in this space. But even look at what the cost of starting up in our space generally is, we can evaluate the ease of access. You know, something's really easy to just flip a switch and start doing it. A lot of times there's gonna be just thousands and thousands of people getting involved in that might be to hundreds of new businesses starting up to do what you want to do every day . So generally the harder something is to do, the less people are gonna be doing it. Ah, and also, you know, we want to look at what the typical target customer in our industry is. So if we're going after a specific niche, But we think our target customer it's inbox a. But the the rest of the industry says they fit in box B and C, then we need to evaluate, you know, why do we think that our products gonna fit into our specific customer base opposed to the same as the same customer base, is that the rest of the industry seems to be focused on? We'll go over that a bit more in detail in the Overview off business plan. If you take a look at that and look at the document, the market that analysis industry analysis, thes sections are gonna have examples inside of that that you can have read and to have a deeper understanding of what I'm talking about here, right in the next section. Wanna talk about strategy and implementation? I'll see you there. 6. 5 Strategy and Implementation: local back. This is the strategy implementation summary section of business plan. In this, we're gonna define our primary products. That might seem silly, but if we think about defining a product, we don't want to just say we so called them. That's a really easy thing to say. It's really since thing to do. But instead we want to say Now we sell clothing to women's in X Age group that are these styles and focus on these themes. We want to be specific. What is our product? So when we're building off of that, we're not saying we just sell clothing because if we just sell clothing, Weekend sell women's clothing is men's clothing, Children's closings, clothing for babies. You know, we're going in a lot of directions all at once. Here we also want to define our competitive edge. So what makes us different from our competitors and then derive this information from the section previous our market summary market analysis? We want to say this is what our competitors are doing. This is what we're gonna do different. This is what makes us better, you know? What's your secret sauce? Why would someone choose you over anybody else. How are your competitors slower than you? Are you doing something better? Is example your You have a company and you can provide real time data. Will your competitors can only transfer one hour intervals now that gives you the ability to keep a business up to date. It gives you the ability to prevent the occasional sale products that might not be currently a stop. And if you can do that for a business and you can sit down and say, What's our competitive edge? Boom. We keep you up to date in real time. You will not sell stuff that you don't have in stock. That's a lot more to say. That gives you a lot more power than someone who can only walk in and say womb within the hour. You should be good, man. Don't Don't worry about that stock and what makes you special? That's what you want to cover in this. And then our market strategy is how we're gonna go to market how we're gonna sell where where should we advertise? How will we advertise? Yeah, this is the part we want. A layout are going to market strategy. This is how we're gonna get in front of customers is how we're gonna sell to them with our sales strategy. What are initial sales? What are they gonna come from? You know, what are we gonna do in the beginning? And then we're gonna do long term to maintain who was responsible for these sales. You know, if your business has multiple people in, and especially multiple owners, is one of you or all of you responsible for driving these sales? A lot of times in a business you have one person had a sales and cells per side of marketing or maybe someone that covers in both. And they were driving the revenue for the company. No, that's a cue. Responsibility in your business. And you find that rule looks like who's managing that role and how we're going to bring that money. Because if you don't have a sales strategy, you don't have a market strategy. You're not gonna have that rather new and basically your company's gonna starve. They want to look enough sales forecast. So this is a realistic amount this company could generate based on the good American strategies. Well, it's all theoretical. You can't really tell what's gonna happen. Hopefully you get out, you just kill it. And you just make this look like a bad projection. But you have to always understand, you know, you can go into this and it could take a while to get going. You know, an example of this is the average matter store in my area where I live. Discipline. 40 and $60,000 a month in sales. Knowing this, I can assume that I'm doing my marketing right. If I'm bringing in the right amount of traffic into my store and I opened a mattress store , I should be allusion right? 40 $60,000 a month in sales from my mattress store. That's what competitors are doing. That's what, General In my market, I should be able to get those results if I'm fulfilling the needs on marketing and sales side. No, I have a trained staff. I'm in front of people doing radio ads. People. No one them. Alright, right. That's kind of what lays out in this section. And I will see you in a in the management and operation section, which is next. Thank you 7. 6 Management and Operations Summary: the six section of our business plan. We're talking about management operations summary in this section. We want a layout or management. We won't talk about how the company is gonna operate now inside the summary want to, ah, define the management needs and when they men management will be needed. So at X amount of sales we might need. Think we're only this much staff it. What points are we gonna need certain staffing levels? At what points, Aaron, we need more management levels. We want to take a look and say, you know, how much do we need to devote to manpower in this company? Right out the bat. If you're starting a restaurant, I need to look at your tables and say, All right, how many tables gonna server typically cover in this kind of a restaurant? All right, great. I'm gonna need this many servers on staff. I'm gonna need time to pay them while I'm training them. I'm going to need a couple of managers. I'm gonna need some cooks, you know, putting your staffing together. Depending on your business, it can turn into dozens of people that you have to identify, and then you have to find and source these people for your business. And that goes into your personnel plant. So it once we define our management, our leadership, what we're gonna kind of look at, you know, we're talking a personal. Who's gonna do what? When do we know we need to hire more people? If we lay these out, we can look for the indicators of what we need to look at. Well, we are going through the business when we're starting up. And when were really driving those first sales and growing the company? So within the 1st 6 months, if we can see these indicators air happening, maybe we know that because our sales are really high, our sales have hit its key point. Maybe we need to look at how much our staff is doing. Maybe we're working more than 40 hours. We maybe we need to bring another person in Another thing to look at. Two is most businesses are going to start with something on doing their accounting. A lot of businesses start with someone doing their own accounting. A lot of small businesses there will do their own accounting, and it's important to look at you know how much this is gonna cost you toe, Do yourself and how much it's gonna cost. Have somebody else do it. Outsourcing your accounting is a really good way to not only have an expert looking at your financials and get more advice from someone who is more of a financial expert than you has . A lot of entrepreneurs start and their expert at what they do. So they're an expert and installing flooring. They started flooring company, but they're not the best in accounting. And so homeowners skill set toe have. So you know, if it is not something that you're willing to take on, it's not something you want to devote a lot of time to. Outsourcing that can really make your business a lot better. He's a business partners in this area. You want to redefine the rules again, even if it's just a one sentence you clearly define expectations have been this owners, when you have a joint business at all times, I only tried out the physical location, career located world inventory be located and this is just kind of a point of reference. I would like to put it down because to me when we're talking about the physical location of a company. Weaken. Describe it. We can talk about why we're there. Why? This is a good spot for us. Or we can just list of position and say, This is where we're gonna work out of those. We're going to store things. You might have your inventory stored in a completely different location. If you're selling online, you might be using 1/3 party shipper and just running the website and drop shipping all of your product. You know, it's few. Lay that out. That's an important thing. That's an important step, you know. Do you are? Who do you have that's going to be shipping that product for you? What company are you gonna work with? It's gonna do your third party shipping and then we'll talk later in during production. Do we have an inventory for a stock? Don't let me even kind of skip this for just doing a service industry. What if you do have an inventory? You want to define that inventory you want toe how you're gonna make it, where it will be stored? What the inventory is. So that was we're going through is a clear process. This is all about laying out process. This is all vote laying out. This is the company. This is what we do. So anyone could literally pick this up and say, I know what this business is. I know what this business does, and I know how they do it. It's not so someone can walk up and just copy your business. It's so at any given time you could look at it and say, This is what it is. This is what I'm about. This is what we dio And that's a powerful soon to have the full back on and the next section wanna quickly cover important assumptions. And then after that, we'll have our final section of business plan, which will be the funding request. An exit strategy? Yeah, thanks very much. And off work speaking with you in the next video 8. 7 Important Assumptions: Well, welcome back in sections of when we want to talk about are important assumptions, so are important. Some important assumptions are the things that we know are believed to be true. This could be a simple, just a quick list. And what we want to do is just going allow what we believe to be true and harder. This is just so that when we look at it ourselves, we can say these are all the things that we're assuming you want to back up his many things with factors we can. The last thing we want to do is go into starting a business and assuming something that might not be true. So laying that out physically, having it written out, we can easily say this is what we believe. This is why we want to go into business. These are the things that we have identified in our market research and said This is what we can do as a business to meet market needs. This is why it's going generate revenues. What should be successful, you know. Why are we assuming that this is going to work? You know, we're re justifying the business here now after that, we wanted or break even. Analysis that's important to have in our assumptions is because we're going to be assuming that weaken, break even with this business and start to turn an actual profit on it. Now. How much do we need to do a proper ticking break? Even homework? How many sales do we need? How much do we need to do on each average order to reach that? What's the timeline? We think we can do it. You know, we want to be conservative, and we want to say it'll take us 10 months or you want to say Maybe it'll take a year, their businesses that are started and they want to break even within five years. It really depends on where you're at and what you're doing. If you're putting in a two or $3000 investment, your break even might be two months. If you're just doing a side business now, from now, we want to take all that information. We also want to generate profits and losses, and we want to say, how much do we expect to generate in the first few months? How much do we expect to spend huge moments. This is kind of this thing saying, You know, first month, we can probably get a couple of customers. How are we gonna get thm if we can get this money, we should be able to generate this much money. And it's essentially just weighing how much you've spent in our spending presented to bring in, and you want to find a point where it looks like you'd be able to actually have these numbers line up. It's unrealistic to start a business and say, our first month we're gonna have 10,000 customers Day one of starting the business for most products. That's an unrealistic expectation. More realistic, You want to say, Okay, great. The air acquisition model works the way that we have experience and the way that our automatic strategy is set up. We should be able to find one new customer a day, and each new customers should be worth around $60 and from that we can say this is how much it costs to be an operation each day. This is how much it costs for us to be working every day and how much it costs to actually fund these sales So the first month First, governments and business. Oftentimes, you know, you're running at a loss. Your building, that initial customer base that you can grow off of in the next section. We're gonna talk about the running request and exit strategy. 9. 8 Funding and Exit Strategy: in our final section. We're going talk about our exit strategy. Important milestones in the funding request. So starting with the funding request, this is where we're gonna replaced money typically from a bank. Or it might even take the time here to define, You know, we're gonna do crowdfunding. This is how we're gonna ask for money through crowdfunding. Some people start businesses with a loan from family members. You know, at that point, you wanna have your family looked through your business point so they understand what they're investing in, and you can put the request for money from them in this as well. But typically this is for a bank. This is basically flying out. This is the money we want in the bank. This is what it's gonna go towards? No, with our exit strategy, you know, What do we do if we fail? Sometimes this is good to have their business owners like to put these in. There's business owners that don't like to put isn't depending on the kind of business you're starting. This might be necessary on how will the company be dissolved if there's a partnership? Who's responsible for what expenses in the result of a business failure. If it's a partnership in one person wants to leave the company. How did Howard Able Company? You know, do they have? Do they get bought out by the company? Automatically? Does the company give them nothing? And they just get to walk away Scot for you? How does that work out? Some businesses are started with an end date in mind. You know, if your Ben this is meant to be around for one or two years to fill a need that you expect to exist for that amount of time and how do you exit that? How do you shut that down are businesses that will say we're gonna be around for one or two years and at that 1 to 2 year mark, they'll say, Okay, this is what's happening. It's time to shut down. This is what shut down is gonna look like we've had it planned from the beginning, so liquidate their inventory within a month before they're gonna close. So they have all their inventory gone by the time they hit the closed eight. When are important milestones so important milestones for the company? These air cheap points have strong meaning for the business that will ensure your leading to success. This is just the end. Pulling back your plan toe lead to these milestones. Example. Milestone might be $10,000 a month in profit. You know its points of the business. They're gonna make a difference for you, and reaching them are going to be a big deal. May be your first major partnership with a large company or large distributor. That could be a big milestone for your business. And that's a that's a gold. It's obtainable lexical that you should have your doing a company that can go through distribution model. Uh, that's kind of the last section of business plan, and they're included in this. There's a document where you can actually have you. Ah, business plan that's written out with examples of all these, and it's written out as a small business. Someone could start from the home. There's another document as well. That is a document that just kind of outlines all this for you, and it's formatted so you can just go in and enter everything you need under these headings so that you're able to more easily fill that out already formatted for you. So if you want to, you can just listen through all of these, pause it at each section, listen to what it's about, reference the example and write it all out. So by the end of all of this, using the example using the's brief presentations, you should be able to sit down in a matter of a couple of hours, maybe a day. If you're more tired, your business is more complicated. Run out of business plan and have that all set up for yourself. I hope you enjoyed this lesson and you have a great day. 10. Types of businesses: Hi, in this video, we're going to learn about these seven most popular types of businesses and the advantages of those businesses. So starting off, we'll start at the most simple one, right? That is going to be a sole proprietorship, which is a business that is owned by one person. What this means is basically, I own a business. I go in, I'm the only employee I worked there. Maybe I have a couple other people that are higher but they don't ever have equity in the company. There's no legal or financial distinction between myself and the business. What this means is if someone shoes my company, there are also directly suing me. So if say, I start a lawn mowing business and I'm mowing someone's lawn and I crashed my lawnmower into their car when someone sues my business there directly suing me as a person. Now, there's a couple of disadvantages to that being that now I'm at fault. I can get insurance that can help me with that. But generally this type of businesses a little bit riskier because of that. You can also do something similar called a partnership. And the partnership is going to be similar to a sole proprietor, but as it implies, there's two people, right? So it would be me and my brothers start a lawn mowing business. Financial and legal responsibilities are divided. It doesn't have to be a fully equal partnership. I could own seventy-five percent, he could own 25%. But the idea is we were both actively working in the company, where bad wolf actively owning the company. We both actively contribute to the company and we both are responsible for the outcome of the company. So if the company gets sued, my brother rides the tractor around mowing lawns, crashes into a car. We get sued because of that. I'm sued. He sued because the company is getting sued them. We are both stake holders in that company. Essentially. They're suing the two of us together. Now, there is something called a limited partnership. This is ideal for if you are raising capital for investors or say, you start a business, you wanna run it all yourself and make all the decisions but your brother wants to invest. So let's take the long boeing company again. And let's say that 75% that I put in, that's my start-up cost ID. Twenty-five percent more. My brother wants to get involved. So he gives me 25% of the cash to get started. But he has on actually do anything with the day-to-day. He just wants to sit back and when there's profit, he wants to take his 25% of the profit. Or however we agree a split that so what it turns out to be is if the company gets sued, then it's accompany getting sued, not necessarily the investors. So this kind of splits it up a little bit more. We have investors that are actually going to be involved in the day-to-day. They're usually involved in giving capital will baby, giving some connections to help it get started and bringing some initial business. But my brother in that circumstance isn't helping me with the day-to-day running into business. I'm still running the business and there might be six or seven people that are running the business and then four or five that are just investing money in. Usually these are called a Limited Liability Partnership, or you'll have a limited in an LLC that is a partnership moreover, and LLC here in just a minute. So an LLC is going to be a blend of a partnership and a corporation. So you have no property risk and you have less regulations that you have to deal with. So with an LLC, I might file taxes four times a year and I don't have that liability back to my own personal assets. So it can be multiple people in it. Like I can have the initial setup of a partnership where I could be mean my brother could be investing, we could turn it into an LLC. At that point, my assets would not then be able to be accessed if we were suit. So again, I crashed the lawnmower into a car, I get sued. My company is at risk, not myself. Whereas with a partnership or a sole proprietorship, if I crash into that car, I get sued. They could potentially take my personal assets, might dip and take my retirement money to pay for that or buy savings to pay for that. Whereas an LLC I am operating within a company and the company is basically its own kinda entity. Not quite legal. It's own. Which as a corporation, a corporation is completely different. I covert operation is going to be basically think about it as creating like a person, right? So a corporation is legally treated as a person. So if I get into that tractor, I drive the tractor around a mole and lawns and I ran into a car. Corporation gets sued. There's 0 risks to the employee unless there's proven negligence. And, you know, you can go deeper and you can find reasons to really blame the hours for negligence. But for the most part at the corporation is a corporation that's going to be being sued itself, you know, take the corporation's assets for that litigation. But with a corporation, you're able to have independent owners. And I have ten people on incorporation. One person might just happen to work there. You could also take that and you can sell parts of a corporation, office shares. And what shares are, is, if you think about a company and you take it and you say, this company is worth, let's say for example, $100 to make it simple. So we want to sell 100 shares. Well, a 100 divided by a 100 is one, so we sell shares at $1. Anyone who buys those shares owns that 1% of that company. That entitles them to a few different things depending on the type of stock that you sell. So they could get stock that lets them vote on certain parts of how the company is going to operate. They might get stock that gives them dividends. Depends on how the company decides to issue that. There is also owner's ownership stock, which would give them the ability to come in and start making some decisions. And typically, with a corporation's, you'll have founders that retain a large portion of stocks so that they can maintain control with inside of an organization, but still use that stock selling for bringing in that external injection of cash at some point during the company's growth. You can also have something called a non-profit. And what a non-profit is setup, create a profit. They can apply for tax exempt status status. But unlike, say, a corporation where all of your profit is going to be taxed, a non-profit is intended to spend all of their money and have all of their Pay Go to the expenses of the company. It's not set up to generate a profit. A non-profit is set up to essentially keep, keep going and keep moving. Do usually some type of social good that is intended to not turn a profit. So it might be a non-profit that setup to raise money to feed the homeless. At which point obviously there's not going to be the ability to have profit there because that would violate the purpose of the company. So you can apply for it and tax exempt status, you can use in the intention there is at the end of the year when you file your taxes, you should have 0 profit created by a non-profit. And lastly, we'll talk about co-op. So you could create a co-op. This would mean that there is no external stakeholders. Everyone that does anything with this co-op is part of it. All earnings are divided amongst all the members of the co-op. In all the members use it services. So sometimes you see a co-op. It might be like a small town grocery store where all the members of this community, all the grocery store. And they each basically work there. So that worked at the grocery store for each ONE person or that we were Fu store quarterly or yearly, they pay out a small portion of the earnings of that grocery store back to everyone. And major decisions are voted on by the group. And this is how it's run. There's no one outside of it. So you couldn't have somebody three towns owner over. That's part of this co-op. It would only people who are actively using that co-op. And that's a quick overview. Seven different types of businesses.