1. Creating a Business Plan Brian Cox 6/24/07 Nature is trying very hard to make us succeed, but nature does not depend on us. We are not the only experiment. - R. Buckminster FullerR. Buckminster Fuller

2. 7/23/072 Introduction This presentation is the start of several presentations aimed at treating your trading as a business. The material presented is based on a business plan developed by Xavier Plasencia who is part of the San Diego Group A business plan needs to be a living document that you add to; change and update on a regular basis. It is not static. Its a way to stay focused on the your trading.

3. 7/23/073 What is a business plan?  A written document that describes a business, its objectives, strategies, market and financial forecast.  A blueprint and communication tool for your business. A device to help you, the owner, set out how you intend to operate your business. A road map to tell others how you expect to get there  In a nutshell, the business plan should clearly explain the what, why, when, who and how of the project. It should be a comprehensive explanation of the opportunity, the people involved, the money required to implement the plan, where it will come from and what financial results the opportunity is likely to produce.

4. 7/23/074 Why do we as traders need one?  A business plan will guide us on achieving our goals  can be a collection of spreadsheets, lists, research summaries, and other documents stuffed in a binder that you refer to and update on a regular basis  It enables budget expenses and helps in keeping control of expenditures, managing cash flow, measuring trading measuring success  It also ensures that money spent is not wasted.

5. 7/23/075  If you are expecting to use trading to add to your income, retire early, quit your job, then you need a business plan.  Then these may be your goals  How much will you need to make on a annually, monthly, weekly and daily  How are you going to create income; Stocks, Options, currency?

6. 7/23/076 Business Plan Elements  Mission Statement Describe why you are building this business. Are you adding income? Retiring early? Changing your profession? Something else?

7. 7/23/077 Simple Example Statements  This business has been developed to add to my retirement savings.  This business has been developed to pay for my child’s education  This business has been developed so that I can leave a profession that I no longer want to pursue

8. 7/23/078 More complete Example Statements  I’ve developed this business so that I could leave my profession as a attorney.  I want to be able to spend more time with my family and my community.  Education is important to me and I will be sending the first of my two children to college within 4 years. I don’t want cost to be an issue.  Within 5 years, this business will fund the procurement of a winter home in Park City Utah.  I what to be able to participle in community and charity activities that I was not able to with my previous profession including, PBS fund drives, Red Cross activities and my children school activities

9. 7/23/079 Key points of a Mission Statement  Be as specific as you can.  Personalize it to your goals for the business  Remember to put a time frame on it  If you are building it with a partner, then make sure that you both provide input and agree on it  Share it with others and use it as a means of communicating why you are spending time and energy on the task

10. 7/23/0710 Business Plan Elements  Funding / Working Capital Where are you getting the money to fund the enterprise? Savings IRA Income from a job Loan

11. 7/23/0711 Business Plan Elements  What are your expenses? Weekly Monthly Quarterly Annually  Don’t forget, insurance, savings and taxes or benefits that you job currently cover Can’t know how much you need to make if you don’t how much you are spending

12. 7/23/0712 Business Plan Elements  Monthly Estimated Revenue Based on your expenses, how much each month do you need to make?  Now figure on a daily, weekly, monthly and annually what your cash flow is going to be.  What will be your types of income? Short Term, Mid Term, Long Term  What will be your income sources? Stocks Indexes ETF Options  Types, directional, spreads, complex Currency

13. 7/23/0713 Business Plan Elements  Business Growth (appreciation) Business growth is the measure of profit and growth of working capital. Growth = ( liquidated investments + revenue) – (operating expense + cash reserve + employee program)

14. 7/23/0714 Business Plan Elements  Breakeven point At what point have you met your goals? This is called your breakeven point. This is a major milestone where the revenue is greater than the operating expense

15. 7/23/0715 Business Plan Elements  Target Growth; 1 Year Percent growth expected from working capital Specify the Strategies used for obtaining the targeted growth. Stocks Indexes ETF Options  Types, directional, spreads, complex Currency

16. 7/23/0716 Business Plan Elements  Target Growth; 5 Year Percent growth expected from working capital Specify the Strategies used for obtaining the targeted growth. Stocks Indexes ETF Options  Types, directional, spreads, complex Currency

17. 7/23/0717 Business Plan Elements  Re-investing in growth Budget for investing tools  Classes  Conferences  Subscriptions  Computer upgrades  Internet Employee Growth Expanding Business  Diversifying

18. 7/23/0718 Business Plan Elements  Cash Reserves Emergency Funds Savings  Taxes Differences in taxes Stock vs. Options Incorporate or not Estimated tax payments Tax advisor

19. 7/23/0719 Business Plan Elements  Employee / Community Programs Employee retirement Employee Scholarship Programs  Diversifying As the business grows seek out additional avenues of investments that generate a reliable as steady cash flow usually at expense of lower return. Examples are real estate and franchises

20. 7/23/0720 Recommended Books  Eat that Frog, Brian Tracy  The five Major Pieces of the life Puzzle, Jim Rohn  The Four Laws of Dept Free Prosperity, Blaine Harris and Charles Coonradt  Rich Dad Poor Dad, Robert Kiyosaki  Cash Flow Quadrant, Robert Kiyosaki