By Renee Grannis

About a year ago, I resurrected an old dream to own and run an event facility. A close friend and I scoured the city and surrounding areas for possible buildings and locations. While doing so, we did our research on why we thought this particular type of facility could be sustained. We used more than five years’ worth of statistics on the size and locations of the local events. There were numerous event facilities around, but less than five could meet the requirements of our customers. Finally, we found a perfect spot. And the land came with a developer who shared our dream.

That was the easy part.

I’ve been in the wedding industry since 1970. And, for more than 25 years, I’d taught the principles of business to aspiring wedding consultants. Now, it was time to put these principles to the test.

Planning for success
An architect doesn’t build a house without a blueprint. A movie director doesn’t direct a movie without a script. Because we were asking for a lot of money, $5 million, we knew we would need a solid business plan. Our business plan had to plot the course of this new venture; it had to set the goals for a logical progression from start to finish, and it had to prove whether or not the goal was feasible. We had to build our blueprint for success.

Building on a strong foundation
An important purpose of the business plan is to determine the expected financial results of our operations. As much as we love the industry, let’s be honest, we are in it to make money. The business plan must lay out the financial potential of each venture and our needs. This brings up a crucial and generally overlooked difference between successful entrepreneurs and those whose businesses are trapped hopelessly in the matter of money, specifically in raising enough to take your dream to the marketplace. The well thought out business plan tells a possible investor that you know what you are doing and have seriously tackled all conceivable aspects of this business, “the Good, the Bad, and the Ugly.”

For us, our business plan described the proposed facility, services and events, and our market—all while emphasizing why it was different from all other such facilities in the area. We described the type of staff required, monthly operating expenses, and when we expected to make a profit. We looked at every conceivable obstacle we could think of, and how we could overcome them. We even sat down with professionals who were negative about the facility and made sure we could answer all of their concerns.

Show creditors you are a good risk
Although there is a mountain of information on the Internet on business plans, here are some things you should provide for a business loan.
•    Clearly state your financial needs. Prepare a plan that outlines your loan requests.
•    Include an overview of the company—past and present.
•    Include résumés for all decision makers.
•    Prepare a projection worksheet that demonstrates the income and expense picture of your company for a minimum of 12 months. 
  Show how this new debt will be repaid.
•    Prepare a personal, current (within 60 days) financial statement.
•    Get a copy of a personal credit report.

Review all this data with your accountant so you can discuss the financial status of your company intelligently. Banks are in business to lend money, but they want assurances that you are a good risk.

Sometimes the best laid plans…
So, were we successful? That depends on how you look at the end results. We had everyone convinced that we knew what was needed. We also had a well-documented plan. But it was not sustainable for entrepreneurs who could not handle three to four years of initial losses. No matter how we sliced the project, there was not enough income to support it and make payments to the bank.

All along the way, we were asked why we didn’t reduce our requirements. Reducing the requirements put us in the same category as about 25 other facilities that were struggling to keep their doors open. If we couldn’t be unique, we didn’t want to compete. Based on the well-documented statistics of the area, and the very thorough business plan, we have currently abandoned our plan for a facility. However, the experience has shown us that we can still expand our profit margin by making a few less expensive changes to the company. In the end, it is the business plan that showed us the way.

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