by Hill Harper
Build a system: You need a tracking system for meetings with the members of your personal board of directors, because no plan succeeds if it’s not documented. Have a dedicated notebook and log everything. Keep track of names, dates, issues discussed, next steps required, and future appointments.
Below is a sample checklist that you can use to track your progress.
CHECKLIST
DATE COMPLETED
Preliminary research conducted
Board of directors identified
Tracking system developed
FINANCING YOUR VEHICLE
You must create a personal budget. Money buys us options. Options are very valuable. That’s why prisons take away your freedom, because they completely limit your options. So our relationship to money and how we use money to maximize our options is critical. You need to use money rather than let it use you.
Keep track: Write down the exact amount of everything you spend per day, week, and month. Within a few weeks, you’ll have a pretty precise account of how much you’re spending and on what. You will be much more conscious about how you spend your money.
Analyze: After a month of keeping track of your spending, sit with your chart and figure out what expenses you can cut. Is there somewhere less expensive to buy your groceries? Could you cook more?
Plan a budget for the year: Estimate what you’ll need to spend month by month. “Need to spend” includes only the basic costs, no frills whatsoever.
Emergency stash: Be sure to keep some cash on hand for emergencies.
Be specific: This includes paying attention to mindless spending. The key to a detailed understanding of yourself is to be as specific as possible.
Smart tracking: After tracking your money for a few weeks, you’ll have an accurate portrait of where it all goes. You’ll have a sense of recurring bills as a proportion of your take-home income as well as a sense of what you spend on those “one-offs.”
One-offs: The best way to cut expenses is to eliminate as many one-offs as possible. Did you absolutely need those brand-new sneakers or could you just have kept the ones you had really clean?
Variables: Factor in those recurring annual bills that might not show up in the initial stages of tracking, like health insurance and taxes.
I suggest using the chart below to track your money. You can personalize it any way you want, but it is a starting point.
MONTHLY BILLS
AMOUNT DUE
DATE DUE
Rent
Electricity (If Not Included in Rent)
Phone
Other
DAILY EXPENDITURES
AMOUNT BUDGETED
AMOUNT SPENT
Groceries
Meals/Drinks Not Consumed at Home
Public Transportation
Clothes
Shoes
Other
Resources and Tools
Personal Finance Tracking Sites: Use a public library computer if you don’t have Internet access.
Mint: www.mint.com
HelloWallet: www.hellowallet.com
MoneyStrands: money.strands.com
Personal Finance Books: See reading list on pages 353–354, which includes some personal finance books.
Local Newspaper: Money/Finance section
Local Bank: Free financial/investment consultants
THE BUSINESS PLAN
Now that you’ve got your personal finances under control, you will want to begin thinking about starting your own business, which I urge any ex-incarcerated individual to do. If you were a street-corner pharmacist before you were incarcerated or entrepreneurial in prison, you already intuitively understand many of these business concepts. Now you just need to transfer them to a legit business using a specific plan.
Figure out your business idea: This can be something you already know how to do and/or something that provides a service to fulfill a need that exists but isn’t being met. You can also learn to do something that fits into an existing business model.
Write a business plan: Making a detailed plan is critical for success in business and in life. So many people try to start businesses without a detailed plan and that is one reason many of them fail. Here’s how not to fall into that trap.
Mission statement: A mission statement explains what your business is about. This should be about a paragraph in length and should answer the following questions:
What are you selling?
How will you sell it and how will you make it?
What is your cost of goods sold (the inventory costs of the goods that a business has sold in a certain period of time)?
What are your objectives?
What is your action plan?
Business information: This includes when you will start your business and where it is located. Provide a brief description of your products and/or services. The description of your product or service should include information about its specific benefits from a customer’s point of view. Describe your product’s ability to meet a need and its competitive advantage. Include information about the life cycle of the product, as well as factors that could influence its cycle in the future.
Copyright or patent filings: If you plan to file for these, list them here. Divulge whether any aspects of your product could be considered a trade secret, and include information on existing legal agreements, including nondisclosure agreements. Will you be using/needing a lawyer? Legal fees for corporate documents (such as those regarding investments and organizational structure) and copyright/patent filings need to be included in the budget if needed.
Outline of research and development plans: Identify your competition in the industry and outline their plans as well. Answer these questions in your outline:
How do you plan to market your product or service?
What is your competitive advantage?
Business structure: First you will need to figure out if your business is going to be incorporated, and if so, whether it will be a C or S corporation. Or will it be a partnership with someone, and if so, will it be a general or limited partnership? Or instead will you be a sole proprietor? More specifics on how to incorporate are available online, and keep in mind that the rules vary from state to state. If your investment structure is complex, you may need an attorney to help with the documents. Many standard (“boilerplate”) documents are available online. Ask someone from your personal board of directors who has knowledge of these things to help. When you draw up plans for your business, include the following information:
Names of owners and percentages of ownership, as well as the form of ownership (for instance, common or preferred stock). If common stock, is it authorized or issued?
Extent of each owner’s involvement with the business.
Outstanding equity equivalents (such as warrants or options).
Key people in your company and their backgrounds, including their résumés. Describe how they support your own skills and how they will contribute to your business’s success.
Advisory board or board of directors: Well-known, successful business owners who advise you. Include their names and positions/titles on the board, how involved they will be, and their backgrounds.
How you will sell your product: Identify the prospective buyers, prioritize them, and choose the leads with the highest potential to buy. Then identify the
number of sales calls you’ll need to make over a certain period of time, and figure out the average number of calls you’ll need to make per sale, the average dollar amount you’ll need to make per sale, and also the average you’ll need to make per vendor.
Communications: How will you reach your customers? Normally this would include promotions, advertising, personal selling, printed materials, and public relations. Include social networking: Twitter, Facebook, YouTube, LinkedIn.
Sales force: Will you use the Internet or reps? How many people will you need, and how will you recruit them? Will they work for commission, salary, or a combination? How will you train them?
Target market: Who is your target market? In order to determine your target market, narrow it to a manageable size. How big is your audience and how is your product relevant to them? Read industry articles and census information. Include the critical needs of your customers, their demographics, and whether there are seasonal trends that could have an effect on your business.
Market analysis: Identify the forecasted growth for the market and how much market share you can gain. How many customers can you get in your area? Your market analysis should include the following information:
Pricing structure
Gross margins for profit
Discounts
Market penetration
Competition: Include as many specifics as possible, like your competition’s market share, how strong the competition is, and the barriers (if any) to your entering the market. Identify the window of opportunity for you to enter the market. Is there indirect competition that could affect your entering the market? Are there problems such as changing technology or high start-up costs?
Regulatory restrictions: These include government requirements that will affect your business and how you will comply with them, as well as the price of compliance.
Financial information: This includes what type of investors you are seeking. How much money will you need to start your business and how much to run it? What are the expected profits?
Funding: If you are looking for investors, you will need to write a request for funding that demonstrates your ability to repay their loans. Create a PowerPoint presentation to present to your potential investors (a PowerPoint lesson should be included in the computer course at your community college), and include the following:
The amount of money you are asking for.
Any additional funding you might need over the next five years.
Detailed description on how you plan to use the funding—is the money going to be used for capital expenditures, working capital, acquisitions, or other purposes?
Strategic financial plans for the future, such as being acquired, repaying debt, or selling your business.
An estimated time at which investors can expect a return and what interest they can expect to earn on their investment.
Financial reports: Historical financial information (this doesn’t apply to you now but will in the future). Include the company’s past income statements, balance sheets, and cash-flow statements for every year that you’ve been in business.
Prospective financial information: Show what your business will do in the next five years. Include forecasts for income statements, balance sheets, cash-flow statements, and capital expenditures. For the first year, include monthly projections, and then include quarterly and/or yearly projections for years two through five. Make sure your projections match your funding requests. If you make assumptions, describe what they are.
Brief financial analysis: Include a ratio and trend analysis of your statements (both historical and prospective). Graphs are helpful here.
Future plans: Where and how will your business expand? Where would you like to be two, five, ten years from now? Provide strategies for any of the following points that apply to your business:
Increasing your human resources
Acquisition strategy for buying another business
Franchise strategy for branching out
Horizontal strategy to provide the same type of products to different users
Vertical strategy to offer your product at different levels of the distribution chain
Strategy for channels of distribution (this would include the original equipment manufacturers and internal sales force, distributors, or retailers).
Appendix: Here, include your résumé, letters of reference, credit history, and any additional information that could be useful to a prospective lender.
I know this whole business plan can seem a little overwhelming. But it’s not something that you have to create in a day. It’s something you create over time as you do more and more research into your new business venture. Don’t feel overwhelmed. Begin right now by just thinking about business ideas and ask yourself some of the questions described previously. You can create a successful video game design business if that is what you want. This is your life, so you are in the driver’s seat.
NEW VEHICLE WARRANTY
You and you alone are responsible for maintaining your vehicle. It is the owner’s responsibility to make sure that all specified maintenance is performed. This means that you need to have regular doctor, dental, and vision checkups to make sure that everything is in good working order. You can’t do anything if you don’t have your health.
Maintaining a Healthy Weight
Calculate your body mass index (BMI). The higher your BMI, the greater the risk for health problems. BMI = [(weight in pounds) ÷ (height in inches × height in inches)] × 703.
For example, if your weight is 205 pounds and you are 5'11" tall, your BMI is 28.6: [205 ÷ (71 × 71)] × 703 = 28.6.
BMI
WEIGHT STATUS
Below 18.5
Underweight
18.5–24.9
Normal
25.0–29.9
Overweight
30.0 and above
Obese
Measure around your waist, just above your hip bones, while standing. Health risks increase as waist measurement increases, particularly if the waist circumference is greater than thirty-five inches for women or forty inches for men. Excess abdominal fat may place you at greater risk of health problems, even if your BMI is about right.
Find out how many other risk factors you have. The more of these risk factors you have, the more you are likely to benefit from weight loss if you are overweight.
YES
NO
Do you have a personal or family history of heart disease?
Are you a male older than 45 years, or a postmenopausal female?
Do you smoke cigarettes?
Do you have a sedentary lifestyle?
Has your doctor told you that you have any of the following? If you have any of the conditions below, work with your physician to correct the imbalance.
YES
NO
Diabetes
High blood pressure
Abnormal blood lipids (high LDL cholesterol, low HDL cholesterol, high triglycerides)
Exercise and Excel-eration
Doctors recommend that we get at least twenty minutes of cardio exercise at least five days a week. On the other two days, it’s
good to lift weights for at least twenty minutes per day. This helps us to burn our “fuel” (calories) more rapidly and efficiently. If there are no weights available to you, you can do fifty push-ups and one hundred sit-ups every day. Those are free, so there are no excuses!
CARDIO (TYPE OF ACTIVITY: RUNNING, JOGGING, BASKETBALL, TENNIS, SWIMMING):
List type of activity and minutes per day:
RESISTANCE TRAINING/WEIGHT LIFTING
List type of activity and minutes per day:
Checking your fuel (nutrition): The following suggestions will help you to get the proper nutrition.
Choose a variety of grains daily, especially whole grains.
Choose a variety of vegetables and fruits daily.
Choose a diet that is low in saturated fat and cholesterol and moderate in total fat.
Choose low- or no-sugar beverages and foods to limit your intake of sugars.
Limit intake of sodas and alcohol.
Water is the best beverage to drink most of the time.
Choose and prepare foods with less salt.
Control your portion size. If you’re eating out, choose small portion sizes or share an entrée with a friend. You can also take half of your food home. Be especially careful to limit portion size of foods high in calories such as sweets, french fries, and other greasy foods. An easy way to control portion size is to make the shape of a cup with one hand and don’t have a portion of any one food group bigger than what you can fit in your palm.
