Business Plan - How to write a business plan for a furniture store

Hi, I'm Evan Carmichael. Welcome to another edition of Ask Evan. Today I'm answering a question from one of my readers, Ree, who is asking for help in writing a business plan for a furniture store, for the business, and as well for raising capital. So thanks for the question. A very common question about how to write a business plan, and we've actually created an entire guide on how to do it, but in terms of being able to quickly answer your question in a video, I'll do my best quickly. If, especially if you're going for investors, the most important thing they're going to look at is your executive summary. So after you've written your entire business plan, you go back and you write an executive summary that is, you know, 1 to 2 pages that quickly explains what it is that your business does. Because if an investor looks at it and they don't understand what you do, your entire business plan is going into the garbage. So coming from the venture capital world, That's the only thing they'll look at at the beginning, and that's your entryway in. If you do well in the executive summary, then they'll read the rest of your plan. If you don't do well, then they're going to not respond to you or throw your business plan away. So make sure you spend a lot of time on that executive summary, and you write it after you've written your entire business plan, and that it's in plain English. So it should be something that anybody can understand, that somebody can quickly pick it up, they're not in your business, and they can say, "Hey, this is a good idea. This is something that I'm going to put money into. I believe in it." So it's got to be something that's in plain English, your grandmother can understand. It's called actually the grandmother test in the venture capital world. And so have a second set of eyes look at it who's not in your business, who can quickly tell you, "Hey, this makes sense," or, "I'm not sure what this part means." So first part's executive summary. The next thing that an investor is going to look at is your financials. So how much money can you make from this, right? If I give you— I don't know how much you're trying to raise. If I give you $10,000 or $100,000, what's my return gonna be? Right? So you wanna have financial statements that are detailed at the back, and you're making estimates. So it has to be reasonable. I try to find out some information from other furniture stores, to do some research online to see what is reasonable, so that you're able to turn a profit and pay your investor back, right? You have to be able to explain every single number on that balance sheet and income statement the projections that you make coming forward, so that if somebody asks you, it looks like you know what you're doing because you actually do know what you're doing. So financials is second, and then the third thing is going to be your management team. So a lot of people come to people looking for money and they have no startup experience. They've never run a business before, and so that makes it a little more risky, right? If you've never done anything entrepreneurial before and this is your first venture, and you come to me asking for money, that makes it hard for me to say yes. I want to see somebody who's done this before. So as much as possible, you want to show your related experience. I don't know what you've done in the furniture business before, or if you had other businesses before. You want to make sure you're definitely highlighting those experiences. And then if you are weak in certain areas, see if you can either bring on a partner or bring on an advisor. So somebody who's just lending their name to your business and giving you some advice. They don't necessarily have to have any ownership or equity in the company, but that'll help shore up your team a little bit more so if an investor looks at it, they'll be able to say, "Oh, okay, well, you don't have all the experience, but these experienced people are connected to you." Those are the 3 most important things in terms of investor point of view. When you're building a business plan for yourself, that section is not as important. It's more about how you're actually going to make things happen. So you start with your research and you figure out what your niche is going to be, how are you going to stand out from your competition, and what opportunity do you see in this furniture business. So what's so special about your furniture business against all the other furniture businesses that are out there? So you have to make sure you really have that unique value proposition, a unique selling proposition, so that when people come to your store, they want to buy from you versus going to everybody else around you, right? So what is it that's so special about you? Then you want to make sure you're having a clear operations plan together. So How are you going to make things work? Right? How are you going to source your furniture? Are you building it yourself? Are you bringing it in from other suppliers? What's your markup going to be? What are all your costs going to be? And you want to make sure that you have a sound financial plan, even if it's not for an investor, just for yourself. Right? You have to know that you can make money doing this and put together some projections for how much you think things are going to cost and how much you think things are going to— how much you're going to make. And usually things cost a lot more than you think they are. And you make a lot less than you think you're going to, especially in the first couple of years. So make sure there's some buffer in there, right? If you're projecting that you're barely going to make some money, especially in the first couple of years, then you might want to rethink the business idea or find other ways that might help generate some income for the company. Because chances are it's going to be a lot longer and a lot harder than you think it's going to be at the beginning. And that's part of the fun and the challenge of being an entrepreneur. It's very common. So the plan, if you're writing it for yourself, just has to make sense. It has to explain what it is that you're doing, how you're going to run the company, and the more planning you do up front, the easier it's going to be for you once you get into it. Because when you start your business and you open your furniture store, you have costs that are coming out every month, right? You have your location, you have, you know, a staff, you have to buy your furniture. That's real cost. It's coming out of your pocket every month. So if you just start it up your chances of success are going to be a lot lower than if you take the time to really plan it out as much as you can. You can't plan everything without getting, you know, started, but as much as you can, you plan for it so that when you get started, you're giving yourself the best shot of success. The other thing I really try to do on top of your business plan is go and try to find somebody who has some experience in the furniture business and ask them if your plan makes sense, right? Get their perspective on it. Ask them what they would do. You can find somebody who's retired You're obviously not going to go up to your direct competition and say, "Hey, is this a good idea or not?" But find somebody who has some experience in this business and just get their, their thoughts, their experience, their wisdom on it. And they'll probably poke a few holes and give you some things that you hadn't thought about before. And a lot of entrepreneurs like helping other entrepreneurs. If they really feel like you're eager and keen and you're going to take their advice, people are often open to having a half an hour coffee with you to discuss. And give you some free advice. So don't, don't fear reaching out to people and getting their opinion. So you'd write your plan, make sure it makes sense. If you're going to be doing it for investors, make sure you have that really strong executive summary, management team, and finances. But then after it's all done and before you launch, go and try to find somebody who has a little bit more experience in the field and get their perspective on it. Just a quick read over the plan and see what advice they might have for you before you actually start and start spending a lot of money to build this thing up. So hopefully that helps. For those of you watching, if you like the video, please give it a thumbs up below. It makes me want to do more for you. And if you have a question about this video or you have a question about your own company or business, I'd love to hear from you. If you want to leave a comment under the video, I always read those and I try to respond to everybody. So thank you and we'll see you on the next episode. Mm-hmm.