Writing the start-up section of your plan

Dear entrepreneurs!

Today I would like to discuss what start-up companies can expect by using our business plan software (Business Plan Pro) while writing the Start-up Section of their business plans. In my previous post I discussed the Company Ownership of your business plan.

If you are a start-up company, and you have indicated this fact during the set-up phase of Business Plan Pro (by using the wizard), you will have to complete this section. The reason for this is that there is no company history available, and you need to establish some important facts about your new business. Should you currently have a company, you can change the Plan Setup settings in the software to “ongoing” instead of “start-up”.

Business Plan Pro has a Start-up Table Section and a Start-up Summary Section. The Start-up Table Section and its corresponding bar chart are linked to the Start-up Summary Section in the final printed business plan document. This chart provides an overall picture of your start-up company; including your expenses and assets and what sources of financing (loans or investment) you have secured for your company.

In short, use your Start-up Section to give a synopsis of:

• Start-up expenses (expenses you make before you start the business in the first month); e.g. legal expenses of establishment, expenses for developing logo and stationery, and for setting up an office.
• The assets you want to have in the company with start-up.
• How you will finance both the expenses and the initial assets (either by borrowing money or bringing in new investments). 

Now, you may select to use the Start-up Table Section’s table settings wizard to walk you through the settings setup of your start-up section. Here are the questions you need to answer:

• What type of financials do you need? You got a choice between standard financials and cash-basis financials. The standard financials option allows for incidents of delayed payments and receivables. The cash-basis financials are only for companies that pay immediately or receive cash or credit card payments. However, Business Plan Pro does advice the use of the standard financials option as it is easier to use in forecasting cash. Let us assume you select the standard financials option for purposes of illustration in this blog post. 
• The next section of the wizard asks you the average days you wait to pay your bills. Normally the number of days is 90 days – although some companies wait for longer periods while other companies have to pay before the 30 day period. Bottom-line, the number of days is used to calculate your cash-flow and the Accounts Payable in your Balance Sheet. 
• The next question deals with inventory. Product, service as well as non-profit organizations deal with inventory. The standard financials will assist you then with inventory estimates, purchase requirements and how to deal with inventory as an asset. 
• The follow up question also deals with the number of months’ inventory you keep on hand. Of course, this number is used to calculate your inventory balance which is important to create your company financials. It affects, for example, your payment obligations and cash flow. 
• The next question deals with the minimum purchase price of an inventory item. This information helps you to calculate purchase amounts that affect your obligations, payment estimates, balances and cash flow. Keep in mind that some suppliers do have minimum purchase amount limits – i.e. you are forced to order inventory of at least a certain amount. 
• The next question is about whether you want to enter numbers directly into the wizard or into the spreadsheet. Let us select the wizard option.

Dear readers, in my next blog post, I will discuss the finalization of the Start-up Table by assisting you in inserting all the necessary numbers in the sections that have been set up above.

If you have any questions, you are welcome to contact us at blog@business-around-the-globe.com

Warm regards (and enjoy the new week ahead!)

Michiel Jonker, CISA

Tags: Business Plan, Business Plan Software, BusinessPlan, BusinessPlanSoftware, Company Ownership, Start-up, Start-up Information, Startup