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February 07 2012
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Legal Entrepreneur: Cashflow – Do You Need a Business Plan for a Law Office?
Many of you know how to research issues on legal websites, draft coherent arguments, and write a great legal brief. But how many of you actually thought about writing a business plan for a law office? I teach a class on how to write a business plan for other small business owners and I thought this would be a great opportunity to discuss the various sections of a business plan and why you should be writing one for your law office.
Keep in mind, that most often, the true value of actually writing a business plan is that it forces you to think of the various aspects of your office, pose the question, and then go find the answers.
There are two main sections for any business plan. First, the narrative. This is where you actually write down what your office is going to be like, the type of customer you are going to target, how you are going to advertise, and what problems you may encounter along the way. The second section is the actual financials for your business. The amount of money you think you are going to need, how you are going to spend it, what payroll is going to look like and some general financial forecasts you anticipate. Spreadsheets work great.
Here are the sections that a typical business plan will have:
1. Executive Summary
This is generally the first section of any plan, but almost always written last. It should summarize your plan in general, give a roadmap to the reader for what to expect, and gives an overview of your plan, just in case this is the only section they read. Even a law office can have an executive summary. Once you have gone over all of the other sections of your business plan, read back through them and get a sense of what your law office will look like. Then you can summarize it for your executive summary. This section does not have to be very long. For a law office, I suggest two or three paragraphs.
2. General Company Narrative
The next section is the general company description and will consist of several different sections where you go into much greater detail about your individual law office. When you are writing this section, it may help to try and answer as many questions about a law office. One of the first questions to keep in mind is “Why should a bank give you financing?” If at all possible to start out with little to no debt regarding your office, you should do so. But there may be times when you need a line of credit to cover payroll, new equipment purchases, or buying an office building. In that case, having a good business plan will assist you when asking for financing. Thinking of the different sections with this question in mind, gives you a target audience to write for.
We will continue this post in the next article and go over in greater detail the various sections of your company narrative.
As always:
Got a comment, different point of view, or question, just let me know.
Law school teaches you how to think like a lawyer, but not run a business. This column fills in that gap. You CAN open your own law firm and you CAN be successful.
© 2011 Douglas C. Howard
The Legal Entrepreneur
Twitter: legalpreneur – helping attorneys learn the fundamentals of running a law business
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