• Business Planning: You don't have to have an MBA to write a business plan
• Process - Q&A: Asking questions can take you where you want to go
• Technology: Information is power

Key Idea #1: The Lightbulb You don't have to have an MBA to write a business plan.

Quite on the contrary, Lori graduated from high school, but opted not to college. When she decided to start her own business (just a few hours after she was fired from a job that claimed she was spending too much time with each customer), she called her regional Small Business Administration office and they mailed her a package of information about getting started.

Along with this information and multiple visits to the library, Lori taught herself what she needed to know to produce a winning business plan.

Topic for discussion:
What are the basic components of a business plan?

Possible answer:
Executive Summary, Product Description, Market Analysis & Strategy, Management/Job Descriptions, Financial Plan, Startup Costs, Income Projections, Cash Flow Projections, Personal Financial Statement, Resumes (Management).

Topic for discussion:
Why did the banker say "Yes" to Lori?

Possible answers:
First, she had experience in the industry. Had she told the banker that after 10 years in ladies' apparel she was going to start a limousine service, he probably would not have asked her to send him her business plan. He was impressed that she has worked in a shop just a few doors away from where she wanted to open her own store. This meant she could attract her old customers.

Also, her projections were realistic. Entrepreneurs and small business owners tend to be optimistic by nature and this causes us to assume everything is going to go perfectly and we'll start making money, if not overnight, soon.

The bankers have seen so many failures they know that every idea won't make millions and they must look for the worst-case scenario which may be buried in the business plan.

Tom, the banker, also liked the fact that Lori's husband has a good job and that they can pay their bills without Lori taking income from the business short-term. He also discovered that Lori's father lives in town and would be helpful if Lori got in big trouble.

Topic for discussion:
Are you surprised that the banker looked closely at Lori's personal life before approving the loan?

Possible answers: No. Bankers loan money to people not to businesses. When you read Forbes , the Wall Street Journal or other business publications, notice that the writers examine the personal lives of the business owners as much as possible. It is at the core of leadership and the behavior. A person doesn't act one way from 8 AM to 5 PM and another way from 5 PM - 8 AM. A person whose personal finances are in disarray will have trouble getting a loan for a small business.

Topic for discussion:
After reviewing this videotape, why are there so many people who say, "The only reason I don't have a business is I couldn't get startup funds? If Lori can do it, why can't more people?

Possible answers: Most people are not willing to spend the time Lori did to actually put their ideas in writing. They enjoy talking about starting a business but can't force themselves to do the research necessary to write a business plan that a bank would fund. Also, many people don't know they can get free help from the Small Business Administration.

Key Idea #2
Asking questions can take you where you want to go.

Topic for discussion:
Is this the ability to ask questions and listen to advice helpful after the startup phase of a business?

Possible answers: Absolutely. If you think you have all the answers, if you think there are no answers anywhere, or if you think you are supposed to learn everything by experience, you will not move forward in your business or your life.

When you stop asking questions, you stop learning.

Key Idea #3
Information is power.
While working for a big retail chain, Lori learned the value of tracking every aspect of business. When she first opened, she had a cash register and soon learned that this was a mistake.

Topic for discussion:
Instead of a cash register, what does she have now? What does Lori's POS system tell her about her business?

Possible answers:
This machine is called a POS, a Point Of Sale device. This particular device is called a SureOne. It is a special kind of computer bundled with other hardware -- scanning devices for bar codes, stripe reader for credit cards,and touch-sensitive monitor for data input, and special retail software components that provides days-end accounts receivable (AR), and listings for inventory and goods sold by style, color, size, price, and to whom and by cash, credit or check. Everything a merchant needs to know for restocking inventory and to balance the books.

Topic for discussion
How did Lori find the right technology for her store?

Possible answers:
Another small business owner who sells and services computers came into her store and made a proposal. This is a great example of how important vendors are to a business. She basically outsources her information systems function. Many small business owners intentionally hire fewer employees by outsourcing many business functions. This helps to manage cash flow and the energy it takes to hire and train people from ground up.

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