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Prepare your business plan

Article Origin


Shari Narine, Sweetgrass Writer, LETHBRIDGE, Alta.







Page 14

When you begin a businss, an entire business plan is needed before a financial plan can even be looked at and an institution approached for funding.

"You have to look at your management background, identify your deficiencies, put together a market plan and then move into a financial plan," said Fred Uwazny, owner of Interactive Business Solutions, out of Lethbridge in southern Alberta.

Uwazny's company recently received funding from the Metis Nation of Alberta to offer the Small Business Launch Program, a pilot project aimed at equipping Metis people with the skills to successfully start and operate their own small businesses.

"We teach our students how to put together an entire business plan, not just a financial plan," he said.

Factors as deficiencies in management must be looked at to determine costs of addressing those concerns. A market plan needs to identify markets available for products or services, and the costs of running a business, such as utilities, rent, labour, material and insurance, must be identified.

"Now you know how much income is needed to meet your expenses," said Uwazny.

Lending institutions judge business proposals on four criteria: management, earnings, equity, and security.

"In your earnings," said Uwazny, "you not only have to make a profit and be able to pay back the loan, but you also have to be able to put some money into your pocket."

Students are encouraged to incorporate so that when they put up collateral for the lending institution, it's the business's assets the lender can go after if a default occurs, and not the business owner's personal property.

As a rule, traditional financial institutions will lend $4 for every $1 the potential business owner has. Non-traditional lenders, such as the Alberta Opportunity Company (known as the last resort for business owners) and private investors, are less stringent.

There are also programs available for Aboriginal and Metis business owners that Uwazny makes his students aware of. Aboriginal Business Canada gives grants and forgivable loans. Both Business Development of Canada and Western Diversification have specific financial programs that are Aboriginal- and Metis-oriented.

Uwazny works with his students to determine what lending institutions or financial programs are best suited for their needs.

"I look at their plans, see how much money they're attempting to borrow, and put together a list (of financiers) for them."

It's all this information that small business owner hopeful Jonathan Hamon has put into play for him as he works with a partner to establish an ammunition factory in Coutts, just outside of Lethbridge. Hamon's plan is to supply law enforcement officers across the country with their ammunition.

"My business plan (before taking the course) was pretty scary," he laughed. "My business plan now is much more professional. I used the categories and guidelines set out."

Hamon was one of eight people to take the course when it was first offered late last year. The second round of the program got underway this past month.

"This course has taught us the skills we were missing, has improved on the skills we had, and has shown us skills we didn't know we had to have," said Hamon.

The program came about after almost a year of negotiations between Uwazny and the Metis Nation of Alberta.

A study undertaken by his company two years ago, said Uwazny, indicated that a "number of identifiable groups, including Metis" did not receive assistance for small business development.

Uwazny pitched his plan for a course specific to potential Metis small business owners to the Labour Market Development Unit of MNA. MNA contracted Interactive Business Solutions to run the pilot project for a year, based on two intakes, the first in September1999 and the second in February 2000. When the pilot project concludes, Uwazny will carry out on-site follow-up to help with marketing and advertising for a three-month period.

"The point of the Labour Market Develoment Unit is to help clients prepare, obtain and maintain employment," said Fran Rogers, unit manager for Zone 3, which covers south of Red Deer. "Self-employment is the fastest growing sector and that's why we approved (Uwazny's) program."

The program, which runs over 10 weeks, works best if those entering have a business idea, said Uwazny.

"The first two weeks of the course will determine if their business idea is viable," he said.

Hamon entered the program with the ammunitions factory in mind.

"I had witnessed a couple of ammunitions factories had gone sour," he said. "I reviewed it, did some research and found the problem lay in the management skills."

Hamon is confident the course will be the difference in making his ammunition factory a thriving business. In fact, he plans to expand to the United States - but he admitted that plans to sell to the U.S. have been put on hold.

"Initially, we were planning on selling to the U.S. right away, but after doing our business plan we realized we better wait until we were financially self-sufficient," said Hamon.

His primary focus will be on law enforcement, while sporting goods will be a secondary market.

"This course is a valuable tool that absolutely should be taken advantage of," said Hamon. "Non-Metis, non-Aboriginal people have always had some sort of mentor. This is something that could give the rest of us an edge."

Rogers shares Hamon's enthusiasm.

"It's a great opportunity for (the participants) to be pro-active in developing their ideas," she said. "A lot of businesses fail because they don't have the administrative background. I can see this being an ongoing partnership (with Interactive Business Solutions) as long as the clientele is there."