June 17, 2015 – You’ve been dreaming about opening your own law practice. But to make it a reality and set yourself up for success, you’re going to need a focused business plan. It’s one of the most important things you can do, says Johanna Kirk, Kirk Law Office LLC of Superior.

“Doing the business plan gives you the reality check on both your practice areas and your ideal clients, as well as on financial aspects – how much is it really going to cost me to rent office space and what does insurance really cost, things like that.”

A business plan should act as a kind of self-assessment, helping you set up your ideas and confront the potential challenges that you may not have considered. For instance, “If you want to be a patent litigation specialist, you’re probably not going to do that in Superior, Wisconsin,” says Kirk. “The clients aren’t there, and the work just isn’t there.” A good business plan clarifies what is possible.

It’s important to “know what kind of risk-taker you are or might be, how to plan your dream, and then figure out the realities and practicalities of what your ideal office and practice kind of looks like.”

The Components of Your Business Plan

Business plans are usually put together for the benefit of lenders. “You develop them so that you can go into a bank … and say ‘loan me some money to make this dream happen,’” says Kirk. The typical components include:

• Your mission
• Your vision
• An analysis of your potential market
• A description of what services you specifically plan to offer
• An analysis of your competition
• A financial analysis

It is this financial analysis where you project out for a period of years, what you expect for your monthly expenses, how you plan to generate revenue, your projected sales, and more.

“You’re almost guaranteed, if you’re borrowing money to start a law firm, you’re going to have to do the business plan,” says Kirk. “I encourage everyone to do it because it really gives you a reality check of understanding what it is that you are taking on.”

Starting Your Business Plan

Internet searches are an easy way to start outlining your dream. “When I did the process myself, I started out by just Googling business plans for lawyers,” says Kirk. “I got more templates and draft forms than I ever thought existed.”

“I also did a lot of work with the small business administration centers that are located throughout the state of Wisconsin.”

A program of the University of Wisconsin-Extension, the Wisconsin Small Business Development Center (SBDC) is a statewide network supporting entrepreneurs and business owners through no-cost, confidential consulting and targeted educational programs. At each site, experts facilitate improvement and growth for small and emerging mid-size companies and help launch successful new enterprises.

“You can go into an office, sit down with somebody, and get free advice on drafting your business plan,” says Kirk. “They will give you information on how to collect client demographics, industry competition.”

You can get can even get information from the Census Bureau and court system websites. So, for example, if you’re considering starting a practice that will handle divorce proceedings, you’ll know in advance how many cases get filed, how many are unrepresented, and if there really a demand in your geographical market.

The Wisconsin SBDC is “really a valuable tool to help you go through that business planning process.”

Paperwork is Part of the Process

A business plan will also help you organize and prepare for all of the forms associated with owning your own business. “I found very quickly that when your door is open … it’s a lot of paperwork,” says Kirk. There are numerous forms that have to be filed. Everything from filing with the Department of Financial Institutions the type of entity your practice will be – are you an LLC, a partnership, a sole proprietor – to filing with the Internal Revenue Service to create your Federal Employer Identification Number.

Moreover, if you plan to have other staff members, there are unemployment and worker’s compensation filings that have to be done with the state. “If you have trust accounts for client funds, there’s filings with the Wisconsin Trust Account Foundation,” says Kirk. “I was amazed at the paperwork that had to be done in the first two weeks.”

Attend Business School for Lawyers

“If you are considering starting a new practice, or even if you are already in practice and you feel that there are parts of your business that you’re not really confident with … the State Bar is offering a Business School for Lawyers.”

Business School for Lawyers provides practical information about the operations, financial management, marketing, and human resources concepts required for managing a practice.

Upcoming sessions:

• Aug. 14, 2015 – BSL 201: Business Plans for Lawyers is ideal for new graduates, experienced lawyers looking for a change, or current law firm owners wanting a refresher.

• Sept. 18, 2015 – BSL 301: Business Principles for a Successful Law Firm is perfect for BSL 201 attendees, current law firm owners, or lawyers who have experience working in a law firm and want to learn more advanced business school concepts related to operations, financial management, marketing, and human resources.

Looking for more targeted information? Attend the Business School for Lawyers Roundtable Series. Each one-hour seminar consists of a panel of experts discussing topics relevant to law firm management. And at the in-person live seminar, you’ll have an hour after the panel discussion to consult with the speakers and other attendees. Bring questions or examples of current challenges you’re facing.