One element which often gives an edge to businesses, is the formulating of business plan.
This can take the form of some basic targets to meet over the coming year which would ensure survival.
Preferably though it should be a full cash flow, projected profit and loss account, and balance sheet.
Those firms who formulate a business plan are more likely to be those who survive and flourish.
It never ceases to amaze me when I see new clients, often quite large companies, who do not have a budget to work to. They have no idea of what they can afford to spend and no idea what their break - even point is. As a result their year end accounts often do not make very good reading.
The same people will often make very detailed plans arranging their holidays. They chose where to go, which form of transport to take. All this planning goes towards an activity that will last, on average, two weeks.
Yet the business which provides the income 52 weeks of the year, receives no planning at all!
By planning ahead potential problems can be anticipated and often avoided. By continuous comparison of the results achieved to budget, deviations can be responded to and the business can get back on course to achieve the desired results.
As results of formulating a business plan the owners can identify what results are desired for the coming year, How these targets can be achieved and identify a break - even point giving a real sense of control to the business to the owners.
This will help you to define your objectives and how you will go about achieving them.
You will be able to show it to your bank manager if applying for a loan. He will study your plan and form an impression of you and your chances of succeeding in business.
Use the Yearly Business Plan in this manual to help you with your own plan. Remember to be realistic rather than over optimistic about your first year of trading.
REMEMBER to INCLUDE
Your abilities and experience
Market information about the service you offer
Premises, plant and equipment needs
A cash flow forecast
Personal assets that you will be investing
Securities against any loans
Your project financial requirements
PRODUCING A TWELVE MONTH BUSINESS PLAN
After studying this course you will be able to produce your own Twelve month business plan.
The plan will include how and when to run promotions and competitions.
The right and wrong times to use vouchers
Creating an equal work load right through the year.
Making sure your business is off to a good start.
USE YOUR PLAN
Every month or as soon as possible after it you should have your actual figures to compare with it. This comparison is for two reasons;
To identify what has gone wrong, right, and to derive lessons for the future.
2. To identify problem areas for the future which may only emerge as your actual performance fails to keep up with your actual performance.
Photo Quote: My favourite thing is to go where I've never been. Diane Arbus