Evolution of an Enterprise, Chapter 4: Plan of Attack

It’s three weeks into business, and Jason Mitchell and Michael Mardis have landed a couple of customers for theworkshop 308 LLC.

A Springfield resident has commissioned them to design and build a wet bar. Someone in Indiana has commissioned them to design and build an entertainment center.

Mitchell and Mardis, who focus on designing furniture and environmentally friendly houses, are researching materials and will bid and build those projects within a few weeks.

“I feel like a lot has come up,” Mitchell said.

Meanwhile, the design duo is spending an hour or two a night writing their business plan.

So far, they haven’t sought professional help with crafting their plan, but they plan to do so after they finish a draft this month. They’ve been using a business plan outline they found on the Internet.

“The idea is to print it out and take it to someone and … have them help us massage it,” Mitchell said.

Critical planning

One place Mitchell and Mardis could get a business plan critique is Score, an organization of volunteer counselors who are retired executives.

Score, founded in 1964, has 389 chapters nationwide. Its volunteers share their experience and knowledge with entrepreneurs for free.

“I think that a person, unless they’ve been in business for a long time, is really not equipped to write a business plan without some external scrutiny,” said John Fleming, vice chairman of the local Score chapter. “You just don’t have the perspective.”

Fleming said most entrepreneurs – armed with an independent spirit – don’t want Score’s help.

“I think there’s a pride issue that gets in the way,” he said.

Fleming estimated only 10 percent of businesses have written plans. That’s because most business owners think they only need business plans for getting bank financing, which isn’t true, Fleming said.

“The real purpose of a business plan is to track your progress,” he said. “How do you hit a target that you don’t own?”

Startup failure rates are high – 75 percent fail within five years – because owners often don’t have clear, measurable goals, Fleming said.

Bank’s perspective

Michael Garner, assistant vice president of UMB Bank in Springfield, has been giving Mitchell and Mardis business tips. The duo established their business savings and checking accounts at UMB Bank in hopes that the institution will loan them money in a few months.

From the bank’s perspective, Mitchell and Mardis probably don’t need professional help with their business plan, but they should have one in place. Mitchell and Mardis are likely to seek a loan of $20,000 to $50,000, and Garner said banks only scrutinize business plans for loans of $1 million or more.

Still, Garner has plenty of advice for Mitchell, Mardis and any other small business owners meeting with a loan officer for the first time: Be honest; wear something nice; don’t worry about being nervous; bring a marketing plan; bring a résumé; show that you’re able and willing to invest some of your own money; show three-year revenue projections; be ready to answer a lot of questions; and, of course, bring a business plan.

Garner also said banks like doing business with people they already know, which should help Mitchell and Mardis at UMB Bank.

“They have a really level-headed approach to what they’re doing,” Garner said of theworkshop 308 guys. “I’m more than willing to help as they go down the road.”