The Importance of Having a Business Plan – by Gene Guarino

(upbeat music) – It’s important to have a business plan. To know the main elements of it and to have it laid out properly. There’s two primary things or reasons why you have a business plan. One is for you, one is for them. So, you. You need a roadmap, directions to get to where
it is that you’re going. And I know some of you
listening are saying, Gene I’ve had businesses,
I’ve been successful, I didn’t have a roadmap, I
didn’t have a business plan, it was all up here. Well guess what? You got lucky. Or you did okay, but you have no idea how much
better you could’ve gone, how much farther you could have gone, how much better you would
have done financially, maybe the time, money, the
effort you would’ve saved. Its kinda like having a map showing you how to get to where you’re going. If we know the map, we won’t be taking
routes that take us off, or detours. And if we know how to get there faster, we can accomplish and go farther
in the same amount of time. I don’t know about you, but having a business plan saves me time and that’s one the most important pieces. They say take two, three
times as long to plan as we do to do it. That’s what a business plan is. Frankly, it doesn’t take that long, but you do need to have the main elements. Now, the second reason to have
a business plan is for them. Who’s the them? A banker, a lender, an
investor, a partner, somebody else who’s
gonna be involved with. Whether they’re lending to you, or investing in you, or working with you, for that other person who’s
involved with what you do they need to know what the
goal is, what the vision is, where it is you’re headed so
they can decide if they wanna stay on your bus or get off
and go on somebody else’s bus. So, those are the two reasons. The main elements? What we call them is the eight P’s. Lemme share a few of them with you. The first P is for people. It’s all about the people that
are involved in the business. What have they done
that is in this industry or similar to this industry now? Now, if you’re saying well Gene, I’ve never done Assisted Living before, this is all new for me. I got it. But you gotta surround yourself with other people who have done it before, who are part of your team. So that when somebody else is
looking in from the outside, they see you and your experience, even if it doesn’t exactly
relate to Assisted Living, but they also see the other people that you’ve surrounded
yourself with, your team. P is for people. The next P is for product. What is it that you do? So, you need to describe all of this, by the way, in your business plan which may be very thick
with all the details, but in the front there’s
gonna be what is called an executive summary. The executive summary itself
is gonna be a few pages. Maybe one, two, maybe three, but it’s a summary of all the details; who you are, what the product is, and then from there,
the place in the market. Are you the high end,
are you the Nordstrom? Or you’re the low end,
are you the Dollar Store? So, I don’t wanna be the Dollar Store, I don’t wanna be down there, beating each other up for a penny or two. And I don’t wanna be at the top, where there’s only a few customers. I wanna be in what we call the sweet spot. But having a business
plan gives you a roadmap. Now again, I know a lot of
you have been successful in business without a business plan. But if you understand the reason
to have the business plan, and if you commit yourself to it, you absolutely will go farther, faster, you’ll save yourself
time, effort, and money. And if you’re looking for
somebody else to invest in, lend to will be a part
of what you’re doing. Frankly, I as an angel investor, would never invest in somebody
without a business plan. I as an angel investor wouldn’t do it. I know others don’t do it either. Private lenders, I wouldn’t lend money to somebody who doesn’t have written plan, who hasn’t thought it through, who hasn’t figured out
what the challenges are, what the situations are that may come up, those things that are working for them, or strengths or weaknesses. And banks. Banks are certainly not
gonna lend to a business or somebody who wants to
use money, their money, to create additional money, by starting something
from scratch brand new. But if you do this properly,
you have a business plan, you know what to do, they know what to do. It’s laid out, you know
the path to get there, it’ll save you time, effort, or money. Make sure that you got
the executive summary and it lays it all out. If you’ve ever watched
the show Shark Tank, at the very beginning they
lay it out in a formula. They say hi, my name is Gene, I’m looking for $500,000
for 25% of my business. They kinda lay it out
in a very simple way, here’s what I’m looking for. Then, they go on to, my
business, here’s what we do. They go on and explain it
for two or three minutes and then they stop, and they wait until the Sharks say I’m interested tell me more,
or you’re nuts and go away. Now I’ll tell ya this, raising
capital for Assisted Living, it’s the easiest thing I’ve
ever raised capital for, but you need to have a business
plan in order to do that. Don’t expect anybody to
give, lend, or invest in you, or be a part of what
you’re doing financially unless you have a written plan. But if you do and you’re clear, succinct, you surrounded
yourself with the right people, you’ve got a plan, you
absolutely can do this. Get it funded and be successful. The final P, and there’s
eight P’s all together that we teach here, but
the final P is a exit plan or plan to exit. Most people really don’t
think that through. They say I’m getting in
and there is no exit plan. In a real estate investment,
in a business investment, that typically looks like
somebody’s investing money in, then we’re gonna refinance into longterm low interest rate loans, and you get your money back. So, two years on the short side, five years on the long
time you get you money back and you cash out. So, that exit plan is what an investor or lender is going to
want to see very clearly. They also would like to
see more than one exit plan in case plan A doesn’t work,
plan B, or C comes into effect. It gives them choices. It gives them comfort to
know that they’re in the deal but they’re not married
to the deal forever. Business plans are important. Whether you do it or pay to
have somebody else do it, it should be done for your
benefit and for theirs. This is Gene from the
Assisted Living Network saying do good and do well. If you like what you’ve seen and heard, please subscribe.

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