[rickmccarthy]

I am in the process of developing a business plan that I will have to present to some investors. I have never done anything like this before so any tips would be great. The plan is for a service plumbing co. And I am able to show detailed costs of getting business up and running, however I do not know how to prove I can keep 5 trucks busy even with advertising any tips on how to prove future amounts of business would be great. Thanks for your help in advance.

Rick

 

[dakzaag]

Rick,
There is no crystal ball. If you have prior experience then you can use histrorical averages as an indicator.

If you don't have prior experience then I would suggest you take a step back and get some experience.

Learning to juggle works best by starting with one ball and getting really good at throwing and catching.

IMHO an investor group will suck your profits leaving you frustrated, broke and tired. Save up enough on your own to get started and grow as you can afford it.

That advice and $1.50 will get you a cup of coffee at McDonalds:w00t:

 

[DavidP]

how to prove I can keep 5 trucks busy

I don't know that much about the plumbing business, but I would think to pull this off you'd need some contracts with apartment buildings or other large building managers to handle all their plumbing work.

Is this an upstart company? If so, why do you need 5 trucks to start out?

I personally don't like the idea of asking anyone to stake me. I invest in myself using my own money. If I don't have it I wait until I do. If business isn't sufficient enough to provide me with the money I need to grow my own business, then I don't see how I can convince others that there's enough business for them to invest their money in me.

I wrote a business plan once to start an optical business. The bank granted me a loan of $500,000, but I'd have to put up $250,000 worth of collateral. This would have given me enough to open a full scale optical store with a complete lab. I started thinking, that's an awful lot of money I have to come up with each month to pay the rent, payroll, utilities, insurance, advertising, supplies and inventory, etc. besides the loan.

I had to be honest with myself. Was I doing this because I really needed it or because of my ego? I decided to forgo the loan and just use the money I already had to start a smaller optical business and then grew the business as my profits allowed.

When you're constantly worrying about how you're going to pay the bills you're not able to give 100% of yourself to your business. Worrying takes a high toll. Growing your business may (or may not) give you greater rewards, but either way there comes greater responsibilities and pressures.

With our current President and congress I don't want to grow my business. I'm scaling back so I can hold on to what I have. The more money you make the more they're going to take. So as you go on the hook for more loans, the government is going to be taking more of your profits making it more difficult for you to repay those loans.

I need you to stay in business Rick because I'm going to need you to pay for my health care.

 

[rickmccarthy]

Unfortunately I agree about our current administration. I used to have a business prior to this and I was trying to grow it out of profits, however I physically gave out I had back surgery and I just had knee surgery two days ago. Due to these ailments I have been unable to work I am looking towards investors so I can hire the necessary manpower. I know my trade and if I had sufficient capital to start up I know I could run a succeassful business without physically doing the work. I wish I didn't have to but I need outside financial help

 

[Mike Finley]

Business plans are just smoke and mirrors. Nobody has ever created a business plan and then proceeded to do exactly what was in it.

You can say you'll keep 5 trucks busy or 50 and then outline what you think it will take. Reality may be very different.

You have a plan, that's the first step, anybody investing will either know more about this then you do and listen to what you have to say and already know what they will or won't do, or they will know less about this then you do and listen to what you have to say and already know what they will or won't do. Who you are and what you bring to the equation will probably mean much more to them then what you have on paper.

If all it took was a nice business plan to be successful then 9 out of 10 small businesses wouldn't be failing in the first 5 years. Statistically the odds are 9 to 1 against you succeeding, at least with a business plan somebody took the time to try to think things through.

There is no sure thing and there is no guarantee of what you will accomplish, the best guarantee of success is if you have a history of success already. Like I said most people will be look at who you are.

 

[MOTB]

I won a business plan award, AND have raised investor money

I am in the process of developing a business plan that I will have to present to some investors. I have never done anything like this before so any tips would be great.

Rick,
This is my cup of tea. It took me a great deal to be able to understand how to run my business, versus raising money from investors. Here is one of my awards that I won to get MyOnlineToolbox off the ground http://www.myonlinetoolbox.com/corp...anked_by_Best_Business_Idea_Award_winner.aspx .
I must warn you that it is not easy, but it is a learnable topic. The biggest thing you need to do is understand that the vast majority of people are successful at running-building a business are not successful at raising money from investors. Your business plan will always be a work in process, and is something that you should have regardless of whether you are looking for money or not. It is a yearly blueprint of what you would like to achieve and how you desire to achieve it. There is no need to send your Business Plan to any person without there being a strong desire to partner with you. What you should have available is an Executive Summary (1 to 2 pages) and a Self Guiding PowerPoint Presentation. I will be more than happy to help you fine tune yourself, either in this forum or privately. Just let me (or us) know and will take it step by step. Please be prepared for some tough questions. My intent will be nothing other than to help you redefine how you project yourself and the business.
Brian

 

[We Fix Houses]

Have you heard of these folks ?
http://www.serviceroundtable.com/

 

[MOTB]

have not heard of these folks, not related to topic thread

Have you heard of these folks ?

No, I haven't heard of them. I went to the site and can not see how they will help with the Business Planning thread question. Trying this time to keep a thread topic as close to the original as possible. Brian

 

[rickmccarthy]

MOTB Thanks I would appreciate any tips currently I have 15 yrs experiance in my trade with a masters license and have had a business prior although it was focused on new construction. Due to physical limitations I need to hire good craftsman to perform the work and I need the investors for startup capital. If i am able to aquire this I am confident in my business model to payback investors as well as see profits. Two things I am struggling with are how to prove call volume from advertising. I have some info from some metered ads saying an ad like this generates so many calls no gaurantees but historically. and also how would I pay the investors back I was thinking about giving them 20% quarterly profits for a few years then scale back to 10% for another couple of years. I just dont want to be involved with them forever.


Please feel free to contact me privately if you have any tips i am putting the last of my proposal together this week and will hopefully be presenting it ASAP

 

[Darwin]

I am in the process of developing a business plan that I will have to present to some investors. I have never done anything like this before so any tips would be great. The plan is for a service plumbing co. And I am able to show detailed costs of getting business up and running, however I do not know how to prove I can keep 5 trucks busy even with advertising any tips on how to prove future amounts of business would be great. Thanks for your help in advance.

Rick

The plan should be 1 or 2 trucks in the beginning--with a timeline for additional vehicles based on performance. If you can't prove how you're going to keep 5 trucks poppin' off the top, then don't include in your plans--for now...

Also, be a stickler for details when presenting your plan. I would want to see that you are thorough in the planning stages--if I were investing in your company. Good luck.

 

[MOTB]

How to prove, how to pay back, not being involved ...

Two things I am struggling with are how to prove call volume from advertising. I have some info from some metered ads saying an ad like this generates so many calls no gaurantees but historically. and also how would I pay the investors back I was thinking about giving them 20% quarterly profits for a few years then scale back to 10% for another couple of years. I just dont want to be involved with them forever.

Hi Rick,
I am sending you a private message. Separately, here are my comments for public viewing
1) Be very careful what you say when it comes to posts online regarding investors. The savvy ones will do a lot of research and your thoughts stay with you forever.
2) The payback should be kept off the public radar screen since there are so many variables that can change your perceptions of what you want, what you will give and what everyone hopes for.
3) I would not say "I don't want to be involved with them forever". Keep in mind that most investors do not want to be involved with you forever either. It is better to keep an upbeat attitude along the lines of "The business model has an attractive exit strategy deisgned to be payable over a three to five year period".

I can go on and on to expand on your statements but will first touch base with you to decide what you wish private and in the public domain.
Brian

 

[MOTB]

Don't be a sitckler for details

Also, be a stickler for details when presenting your plan.

Agreed with your comments EXCEPT being a stickler for details, at least on the first overview. Any person investing at this level will be making a very large decision on their liking the owner and knowing they can run a business. The focus should be on the market opportunity, how you will capture the market and make money. Be careful not to have any detail sidetrack you since you can inadvertingly go off on one tangent that will take too much of your time. Sure, you can get bogged down in details after you get a sense if someone is interested, but do not get bogged down in details while you are capturing the interest. Think of this like a book. Get them interested by looking at the cover, then ensure to cover the highlights on a table of contents, then go to the specific chapter after you understand the investor's hot buttons .... but let them quide you to whatever details they are interested in knowing about. Brian

 

[MOTB]

Rick, please send me a private message or contact me on the website

Rick,
I can not send you a private message for some reason. Please go to the contact section of http://www.myonlinetoolbox.com/CorporateInfo/ContactUs.aspx to make it easier for me to reach you. I will ensure to touch base Tuesday if you can update me before Tuesday morning, else it will be later Wednesday.
Brian

 

[Bob Kovacs]

For a company that size, the only investors you're likely to find fall into the "3F" category- friends, family and fools. People with real money are going to look either for a track record, or for a plan to do something huge that will make tons of money for both you and them. You're talking about starting a relatively small service company, in an industry that's known for a high failure rate- most legit investors won't even look at such a business, or they'll want such a crazy ROI and collateral that it won't be worthwhile for you.

 

[We Fix Houses]

What skin do you have in the game ? This was absent in your original post.

Most savy individual investors want you to be personally mortgaged to hilt with yours and their money. They want to see you with your back up against the wall so you'll exaust every hour of the every day making it work.

What are you putting in the game or percentage of the capitol (cash) are you putting up ?

What do you propose as collateral to your investors ?

This is in your business plan.

 

[knoxwindowdude]

Hey Rick, im also in Knoxvile. If you do the same type of advertising that the new company from Nashville "the smiliy" truck guys and the "hep" (heating elec and plumbing) guys you will be rolling and will only need 10 - 20 k in ad money , 2 phone lines and 2 girls to answer the phones. Ive never seen anything like these two companies, when I think plumbing now I first think of them. Very smart advertising. Also, when you get going look me up, we are opening a showroom in north knox and I need a good plumber to refer out and also for our kitchen and bath redos.

 

[MOTB]

Not just 3F category

For a company that size, the only investors you're likely to find fall into the "3F" category- friends, family and fools. People with real money are going to look either for a track record, or for a plan to do something huge that will make tons of money for both you and them.

I agree with you when it comes to the traditional private equity investor, but perhaps he is speaking with someone who is genuinely interested in investing in his company. Either way, I think it is smart of him to at least give it a try with his best foot forward if there is someone interested. For what it is worth, I built MyOnlineToolbox with sophisticated angel investors in three states and two foreign countries and understand your reply. It is not common for contractors to seek investors and it would be nice to see him succeed, regardless of amount, as a poster child for opportunity. Brian

 

[MOTB]

What are you putting in?

What skin do you have in the game ? Most savy individual investors want you to be personally mortgaged to hilt with yours and their money. They want to see you with your back up against the wall so you'll exaust every hour of the every day making it work.

Rick, this is a good point, but you may not want to answer it publicly since there are multiple answers that make the entire picture. For starters, everyone will want to ensure you have put something into the venture (or have already done so). Next will be sweat equity - whether that is working for free or at a reduced rate. I do not agree with the topic of "personally mortgaged to the hilt" since most investors are not looking for you to struggle, they want you to be focused on growing a business which is difficult to do if you can not comfortably survive day to day. But investors do want to see that you have a true desire to succeed so they can coattail off the financial success.

 

[Carport King]

Test-Test-Test

Rick why are you not still in the new construction part of your business?

Why not just ad the "service" profit pillar to your existing business. Yes I understand that new construction is down but they are still building.

Do you do commerical work? Another profit pillar!

If you are going to do service then what will be your "niche" service. Were is the profit in the service business?

If I were you I would list the profit pillars first. Then put them into percentages Retail service 30% new contstruction40% commerical 20% parts 10%

Then go too Google wordtracker and do a local keyword search in each profit pillar and see who is really looking for your local service. This should be an eye opener and will narrow down your profit pillar.

This way you are not tossing money down the drain. Good luck.

 

[MOTB]

Spoke to Rick, a plan is needed with or without investors

Hi everyone,

I had a lengthy conversation with Rick today who does have experience and does have an opportunity for financing. It is a long shot but I definetely feel that he will present himself in a better light. I prefer to not say anything else yet until Rick has had a chance to better compose his information and then I or he will udpate everyone since some things may be deemed private by him.

I think is important for everyone to understand is that every business should have a plan, regardless if they are looking for investors or not.

Many companies just wake up each day, look to service the current jobs and then look for leads. Whether it is 1 page or a few pages, or is many more if the plan needs to go to outsiders (for potential financing in Rick's case) ... you should have a working document that defines what your business is trying to accomplish, what are you going to do to make it happen, when will you do these things, how much should things cost and how much money do you plan to make.

Any plan is a moving target and will always change. But you can refer to it either once a month or quarter to see that you are going to make your business bigger, better, more profitable, whatever the goals are.

This is not to say that some people can not build a business without a plan, but it helps when you can look at things to see what you intended to do and what changes you should make based on what you wrote down. It is time consuming but well worth it.

Reviewing this with Rick is refreshing since I started my current venture with the full feeling that contractors were evolving into as equal as businessperson as they are craftsperson. That is the reason I am taking such a strong interest.

Will update you all soon.

Brian