Simply Junior » Small Business Owner

Step by Step Guide to Creating an Effective Small Business Plan

admin — Sun, 12 Jun 2011 17:37:47 +0000

Having a good small business plan will ensure that your journey to success is much smoother. All successful business owners know that having an organized, well thought plan is essential to see the results they expect. Even if the business plan doesn’t give the results that you would have thought in the beginning, you can tweak and change different areas of your process to perfect it.

I thought I would go through a step by step guide to what you need for an effective small business plan. Many people try and start a business without any true expectations for the future other then ‘oh this is going to work’. You have to know exactly what “should” happen so that the surprises are less. In most cases surprises in business aren’t positive.

You must have a plan for many different areas of starting a small business. How are you going to fund the start up fees? How do you expect to sell your product/service? How do you expect to pay your employees? How are you going to promote your company effectively? Most importantly and what most business owners don’t think about is where do you want your business to be in 5…10…20 years?

Creating the right small business plan is all about creating effective systems. A system is something that you can use over and over again in different situations to receive expected results. You at least have some idea of what’s going to happen if you have the right systems in place.

The first step to your business plan is knowing exactly how much money it’s going to take to start your company. None of this has to be a professionally written up small business plan that costs thousands and thousands of dollars hiring an “expert”. Take out a piece of paper and write down your plan. The main thing is that you know exactly how you are going to fulfill your dream of being a successful small business owner.

So what are your opening expenses? Here are some questions you need to answer to find out your estimated dollar amount:

How much money does your product or service cost you? How much money will you charge for your service/product? How much money do you require to live for two years with no profit coming in from your business (safety precaution)? How much will it cost for your employees for 2 years? What are your legal fees? What are your CPA fees? How much will getting a physical location cost you (if needed)?

Every business is going to be different so think about anything that you need to spend money on to get it running. The next step you must consider is how are you going to get this start up money. Are you going to go to a bank for a loan? Are you considering finding a partner that can cover the costs with the agreement you can buy out the company later down the road? Do you want to talk with a wealthy family member about your business? Anyway you choose to get the money doesn’t matter.

Having a thorough small business plan is going to help you get that start up money though. As long as you can show the lenders how you plan on getting a return on their investment, you will be set. It doesn’t matter if you have horrible credit or don’t know anybody that will lend you large amounts of money. You can always find a way. Think outside the box!

Alright the next step should be the simplest for you. You want to write down your complete sales funnel for how you plan to sell your product or service. Go through every step you expect a customer to go through to reach your bank account. What are you selling exactly? How are you packaging the items? Are you providing multiple services and products? What do you expect to be your number one seller? What’s your specialty?

Once you have all these areas done, you have to know how you are going to promote your business and keep the business coming in. This seems to be the biggest problem most business owners have. You know everything there is to know about your products/services, but you know nothing about marketing. That’s expected too. Marketing is an expertise in itself.

If you’ve read much of my blog, you know how I preach about smart marketing. Smart marketing is all about spending your hard earned dollar and getting more then you spent in return. In other words, big return on investment (ROI). Every market will be different and different marketing tactics will work in each of them. You have a huge list of options too.

Newspapers, Yellow Pages, Radio, Television Ads Fliers, postcards, promotion coupons Referral programs Internet marketing Email marketing Holding seminars and special events Business to business referral programs

These are just to name a few of the options you have. You can never go wrong working with other local businesses. It’s beneficial for both businesses and can be something that explodes your business quickly. It should definitely be part of every small business plan.

No matter which direction you take your marketing in, remember to always be able to track your marketing method. You always want to know how effective each method is for your business. Don’t spray and pray! In other words, don’t just buy what that marketing salesman is selling you if they can’t show you how many customers you are getting in return.

Creating your small business plan with all of these areas covered is a great start to having a successful business. You can go in deeper and deeper to have an even more effective plan and you should, but this is a great start for anyone. Once you have the plan, you just have to follow it step by step. It makes your job so much easier. You have too much to worry about already. There is no reason to have to constantly be wondering…’what am I going to do now?’ You need to know what you’re doing beforehand.

Business Plan Resources – The Small Business Plan – Seven Critical Components

admin — Thu, 02 Jun 2011 16:47:51 +0000

The effective and successful small business owner works to a well thought through small business plan. This plan outlines and documents the key business objectives, benchmarks and performance measures that must be met.

A good small business plan is the result of having first conducted a thorough Strategy Formulation exercise. The ability to think strategically is one of the qualities of good leadership that all successful business owners and entrepreneurs should possess as part of their repertoire.

Strategy Formulation is a fundamental process that identifies the critical areas to be addressed and sets the priorities for the business across an agreed strategy period.

By focusing on the key areas that are identified as part of this process, the effective manager and business owner ensures laser-like focus in achieving results.

The small business plan integrates and aligns all the business activities around these critical areas and ensures that all effort is targeted, contained and understood by everyone in the business.

Having a plan is critical. It ensures that the right things get done, within the time frames allotted, and allows for the emergence of new initiatives when the plan is reviewed.

This review period should be in keeping with the rates of change that the business encounters around the factors experienced in both its internal and external environments.

Given that this is clearly understood, and that any gaps in capability have been identified, the small business plan is written with seven critical components in mind.

1. Determine Where You Are Now

This is simply a list that identifies and spells out where the business currently finds itself in relation to a particular critical issue. An example might be sales and marketing, for instance. The list, in bullet point form, spells out what is being done, at present, in relation to these activities. All critical issues facing the business should be analyzed, in turn.

2. Project Where You Want to Be Across the Time Frame

This is a second list that identifies where the business should be, in relation to the critical issue being addressed. Using the same example of sales and marketing as above, this list spells out what the “end picture” should look like in relation to these activities, across the business plan time frame.

3. Objectives

By analyzing the gaps between the two lists we have created, we are able to identify the main objectives that must be achieved to fulfill our vision across the agreed time frame. These gaps must be managed well as part of the business performance management process and the business development and risk management profile.

4. Tasks

Objectives must be broken down into a series of tasks and jobs that need to be completed to ensure that the given objective is met. These tasks must be specific, agreed, realistic, targeted and have accountabilities and responsibilities clearly assigned to them.

Tasks should be made into “bite-sized” pieces. Once this is done and each task is completed, it will unerringly lead to the objective being achieved, and everyone can see how their particular task and its completion fit into the bigger strategic picture.

5. Deadlines

All of the tasks assigned must have strict deadlines that are agreed and adhered to by all people involved. Keeping each other accountable is an important dimension in pushing for high performance in the effective and successful small business. Interrelated tasks must be identified, and critical paths for their completion established.

6. Accountabilities and Responsibilities

All the tasks must be assigned to people who take responsibility for getting them completed within the agreed time frames. The successful small business has developed a culture where the taking of personal responsibility for an assigned task is simply a given.

7. Reporting

All of the objectives and tasks spelled out in a business plan will quite likely have glitches arise as part of the implementation of the plan. Part of a successful business plan roll-out includes keeping a regular, updating reporting mechanism in place, so that potential problems can be addressed and emerging opportunities can be exploited. Therefore, follow-up and reporting must be conducted on a regular basis to ensure the success of the plan.

In Summary

Small business plans are nothing more than ordered common sense. A plan makes sure that the right things get done, in the right way and in the right sequence. Effective small business owners have a business plan, and everyone in their business knows exactly the part they play in ensuring its success.

Small Business Taxes – New Law Turns Tax Loophole Into a Crater

admin — Wed, 18 May 2011 16:06:00 +0000

Tired of dealing with those complex depreciation rules? Thanks to recent tax law changes, here’s how to avoid them completely while benefiting from a lucrative small business tax break that not only puts money in your pocket, but also makes the filing of your income tax return much simpler.

If you are a Small Business Owner or Self-Employed Person, this is one tax break you must know and use.

It’s actually an expansion of a tax rule that’s been on the books for years. Known as the Section 179 deduction, the new legislation takes this loophole and turns it into a deduction big enough to drive a fleet of SUV’s through.

The Section 179 deduction enables the Small Business Owner to deduct 100% of the cost of most business equipment, in lieu of depreciation over several years.

What’s so great about that?

Think about it like this: I’ve got a dollar and I’d like to give it to you. You have two choices — I give it to you now, or I give it to you 5 years from now.

Which do you prefer?

Obviously, you’d rather have it now, right?

And why is that?

Because of what you learned way back in Finance 101: something your banker calls “the time value of money.”

I’ll spare you a boring textbook definition. Instead, let’s just assume we agree on this simple point: Is a dollar worth more today or 5 years from today?

It’s worth more today, right?

And that’s why the Section 179 deduction is so valuable.

Huh?

Let’s use an example to bring all this financial theory into reality.

You buy $5,000 worth of office equipment in 2008. Under normal depreciation rules, you wouldn’t get to take a deduction for $5,000 in 2008. Instead, you’d write off the $5,000 over 6 years — part in 2008, part in 2009, etc.

If you’re in the 35% tax bracket, you get your $1,750 in tax savings over 6 years. Yawn. That’s a long time!

You’d get your deduction, and the resulting tax savings, but you’d have to wait 6 years to realize all the benefits.

Section 179 says that if you meet certain requirements, you can deduct the full $5,000 in 2008. You reduce your taxes by $1,750 in Year 2008.

So let me repeat my question: Uncle Sam has $1,750 he’d like to give you. When do you want it? All at once, or spread out over 6 years?

That’s the beauty of Section 179.

Here’s how it works. The maximum amount of business property that can be immediately deducted rather than depreciated has been increased over the past few years:

Year 2003 — $100,000

Year 2004 — $102,000

Year 2005 — $105,000

Year 2006 — $108,000

Year 2007 — $125,000

Year 2008 — $250,000

Year 2009 — $128,000 (plus a Cost of Living Adjustment)

Year 2010 — $128,000 (plus a Cost of Living Adjustment)

Year 2011 — $25,000

Never liked depreciation? Well, you can pretty much kiss it good-bye now.

IMPORTANT: A few other requirements must be met to claim the Section 179 deduction. Here’s a brief overview:

1. Most personal property used in a trade or business can be deducted via Section 179. Real property cannot. Typical examples of personal property include: office equipment such as computers, monitors, printers and scanners; office furniture; machinery and tools. Real property means buildings and their improvements.

2. In 2011, unless new legislation is passed, the Section 179 amount goes back down to $25,000.

3. There are special rules regarding the use of Section 179 to the purchase of business vehicles. For example, the special “SUV rule” that allowed 6,000 LB vehicles to be fully deducted (up to the $100,000 amount) was changed to $25,000, effective October 22, 2004.

4. Your total Section 179 deduction is limited to the business’ annual profit. In other words, you cannot use the Section 179 to create or increase a loss.

This is known as the “taxable income limitation.” For “C” Corporations, this limitation is very cut and dried. But if your business is an “S” Corporation, Partnership, LLC, or Sole Proprietorship, it may not be as limiting as it seems. For these non-”C” Corp businesses, the Section 179 deduction can be used to offset both business and non-business income.

And if you’re married filing jointly, the Section 179 deduction can offset your spouse’s income, including W-2 income.

Example: You start a new business in 2008 that ends up with a loss for the year of $5,000 (before taking the Section 179 deduction). Your spouse has W-2 income of $60,000. Even though your business is unprofitable, you can still take the full Section 179 deduction of $5,000 (again, assuming your business is an entity other than a “C” Corporation).

(Be sure to consult with your tax professional to get the scoop on all the Section 179 rules.)

Be sure to take advantage of this new loophole. A very nice deduction just got expanded to monstrous proportions!

Take advantage of it.

Drawing Up A Successful Small Business Marketing Plan

admin — Sun, 24 Apr 2011 09:41:24 +0000

Every small business owner dreams of drawing up a good marketing plan, implementing it and seeing revenue increase. It is worth taking a look at the elements of a strategically relevant plan that is detailed enough for the business person to assess the suitability of a large number of available marketing tactics appropriate to the business concerned. There are seven key areas involved when it comes to creating a strong and efficient marketing plan for your business.

1. Vision. There has to be a marketing vision that mirrors the overall business vision. So for instance if you marketing vision is to expand your market into previously untapped markets but your business vision is to carry on doing the same old thing, the two are not matched. This will weaken your marketing efforts and produce negligible results.

2. Awareness. For your marketing efforts be effective you have to comprehend and accept the particular needs, concerns and assumptions of your target audience. If you neglect to do so the result will be poor communications and reduced return on investment.

3. Competition. It is vital to analyze your competitors in the marketplace whether direct, indirect or variable. Your direct competitors are self explanatory e.g. shoe shops compete directly with other shoe shops. Your indirect competitors compete for the same budget in the same general area e.g. movie theatres compete with restaurant for family entertainment spending. Variable competition refers to external factors that could disrupt your business e.g. a bridge is washed away in a flood preventing customers from reaching your offices.

4. Message. It is important to work out the communications element, i.e. the basic message, you want to get across to your audience. An inappropriate message could do your marketing campaign more harm than good. It could even benefit your competitors.

5. Media. Once you have clarity about your marketing message it is time to decide how precisely the target market is to be reached. Try to eliminate personal preferences from the mix. Just because you like SMS campaigns does not necessarily mean it is appropriate for your business or your target audience. Endeavour to use a wide selection of media.

6. Analysis. Determine how you are going to test, measure and tweak your marketing efforts in the short and long term. Build these methods into your marketing plan. This is very important. I would go so far as to say that you should eliminate any media where your efforts cannot be measured precisely. If your intention is to gain new markets then you must make sure that the success of this plan is measurable. This is the only way you will be evaluate and adjust your marketing campaign as required.

7. Funnels. These are marketing systems whereby you should define the process whereby your target audience is addressed, your prospects garnered, how they will be informed and how they will eventually become customers. By designing your funnel you will be able to streamline the process and instill continuity for staff and customers alike.

In dealing methodically with these aspects in your marketing plan you will be able to build a solid foundation for your campaign on which to base all your marketing efforts.

Small Business Must Adapt Their Business Plan

admin — Thu, 31 Mar 2011 02:05:51 +0000

A Recap of What Has Happened: During the earlier part of the decade (2001 – 2006) small businesses found there business environment easily managed. Revenues simply increased by 10% or more every year. Most small business owners are highly skilled in leadership, management, have a sale’s personality and\or a technical skill. These skill sets are a good fit for and can accelerate revenues increases in times which growth occurs.

Small businesses saw a sales increase on the income statement and debt increase on the balance sheet. Generally speaking, small businesses became focused on growth (only revenue growth) and overlooked other accounting metrics. The growth decisions made by small business owners omitted the risks of the overall financial position of the company. A result for small businesses was an expansion of their production capabilities. Companies over expanded their production capabilities through purchasing fixed assets (vehicles, equipment, furniture, etc) through debt obligations. Some businesses made these purchases by being enticed by tax benefits. The tax benefits were paid by debt, which means they received a deduction in the year they made the purchase, but did the cash outflow was over the next several years. This would later come back to haunt small businesses by having cash outflow without an offsetting tax deduction (i.e. paying off debt is not tax deductible).

Small business owners general choose to become a “flow through” entity for taxes (s-corporations and partnership). These entities, generally speaking, do not tax equity distributions (i.e. dividends). The small business owners used the tax regulations to exhaust all capital in their company. This worked efficiently during times when the small business owner could fuel growth through debt. With this no longer the case and small businesses are no longer able to depend on financial institutions for borrowing, small businesses will need to fuel their own growth through their own equity. This means owners will have to sacrifice by leaving monies inside the company (no taking equity distributions).

Overall, from 2002 through 2006 (perhaps even into 2008) being a business owner was fundamentally effortless. Risk was factored out of the equation. Group think began sneaked in. Group think is when no one disagrees or is ostracized for disagreeing. Realists were considered pessimists in the sea of optimists. The realist would be proven the victor, but there would be no celebration.

A Forecast Of & A Solution For The Future: The business environment has changed and will continue to be challenging for several years according to several economists and articles in Barron’s. The business model of the past (easy revenue growth, lots of debt and little equity) no longer matches the current environment. Small businesses have had their revenues cut by up to 30% (if not more) and have had financial institutions not renew and\or call loans. Small businesses will need to reposition their balance sheet to include high current asset balances (especially cash), reduce debts and increase their equity as well as rethink their strategy.

Small business owners need to immediately meet with their board of directors’ and\or advisors (or create a board) to begin to develop a new business model. The new business model will need to help reposition their company’s financial and business position to be able to survive the next several years. Small businesses must become more innovative and efficient so make sure the board participants have the ability to be creative and the environment to speak freely (in order to tell you what you need to hear, not what you want to hear). Speaking of what you may not want to hear, a lot of sacrifice and longer hours may be warranted in the new business model.

7 Tips to Real Estate Agents’ Success

admin — Sat, 26 Mar 2011 13:05:29 +0000

With over 2 million real estate agents according to the National Association of Realtors (NAR), becoming a successful real estate agent takes more than just a license and a knowledge of current laws and regulations.The first year drop out range estimated to be from 40% to 80% demonstrates that many real estate agents are not as successful as they could be and research suggests that 90% give up after 3 years. The following 7 tips may help you avoid becoming one of these statistics.

First and Foremost YOU are a business. Real estate agents work for a broker, but are independent, commissioned sales people. This means that you are a small business and must run your practice as a business. Again, remember you are a small business owner. Embrace a Planning Attitude. If you don’t have a plan, then you are on some else’s plan – usually the successful real estate agent’s. During the last 10 years, what I have learned as a performance improvement consultant or coach is that most people place more value in planning a trip to the grocery store or a vacation than planning their lives either professionally or personally. Research Your Market Plan. Since you, as the real estate agent, are responsible for your own expenses, do your research specific to your marketing plan within your strategic plan. Time spent in constructing your marketing plan is definitely well spent. NOTE: Remember a business plan usually is data driven, while a strategic plan identifies who does what by when. Establish Sales Goals. Using your strategic action plan, establish sales goals. If you are new to this industry, it may take 6 months before the first sale. HINT: Use the W.H.Y. S.M.A.R.T. criteria for goal setting. Create a Financial Budget. Budgeting is critical given the up and down of this volatile market place. Your financial budget should plan for your marketing costs, any additional costs such as education and your forecasted income. Make Managing Yourself a Priority. Building a business is not easy. You must learn how to manage yourself especially in the area of time management, ongoing real estate business training coaching continuing education units, and personal life balance. Real estate is said to be a 24/7 business much like any small business. However, it is important not to lose sight of your personal life including family, friends, physical health, etc. Find a Mentor or a Real Estate Coach. Going it alone is not easy. Take the time to find a mentor who can help you steer through some of the known obstacles and help you during the “peaks and valleys.” If you have the resources, you may wish to hire a real estate coach or an executive coach who specializes in small business help and sales.

Being an incredible sales person and entering the real estate market does not guarantee similar sales success. However, these 7 tips may help you avoid many of the pitfalls by not being one of the four real estate agents who quit within one year or one of the nine who give up after 3 years.

Writing a Cohesive Small Business Plan

admin — Thu, 20 Jan 2011 21:34:46 +0000

Having a business plan has made and broken more than one successful, business idea. When a potential, small business owner is asked to write a business plan, most of them run the other way. Writing a small business – the business plan can be a complicated process. A business plan is the document you will use to sell your business idea to potential backers, venture capital firms, family friends, or just about anyone who may back your business venture.

Getting funding can be costly and extremely time consuming. It will most likely be the hardest part of starting your business. Therefore, your business plan must convey your excitement with the promise to succeed at your business venture. You maybe excited about your business idea, but that does not mean others will be as excited as you. Not only will you need to convey you excitement but you will need to make sure you illustrate the profit potential correctly. If no one can see the potential, then the odds of getting funding will be slim to none. When writing the small business – the business plan you will need to make sure your plan stands out amount the rest.

If your plan looks, and reads like a junior executive wrote it than your business plan may get overlooked. Getting your small business plan to break through the minutia. Start off with the benefits – you will want to start off with detailing what you do and how what you do will provide your investors with a sizable profit. Make your projects believable – do not just show figures, explain what will drive growth, how you plan to capture sales and how the two activities coincide. Show detailed knowledge of your market – you will need to demonstrate that you have extensive knowledge of your marketplace.

You will need to show how you plan to progress into the mass market. Introduce you and your team – this seems like a minor detail. However, you need to demonstrate that you and your team have the experience and accomplishments to achieve the profitability goals. Provide financial forecasts – make sure to keep your forecast realistic. You will want to include a breakdown on how you plan to reach your projections. Demonstrate product or services – the power of observation can go a long way in illustrating your products benefits.

Developing a plan does not have to be the kiss of death. If you structure it correctly, it could be your ticket to success.

Health Spending Accounts Help Small Business

admin — Thu, 20 Jan 2011 08:17:46 +0000

Some may have heard of a Health Spending Account or HSA, but few know the absolute benefits to a small business owner.

When you leave employment to venture into your own business, you generally leave behind your ‘benefits’ package and suddenly find yourself with no health-care coverage. There is however, a very simple, very cost-effective and tax-effective solution-the HSA.

Most people are familiar with or have had ‘Group Insurance’ and hence are aware how the programs work. They are however Insurance programs and have limitations, restrictions and high risk of fee increases each year. A ‘typical’ group insurance program can cost a business owner $300-$400 per month for family coverage, and this coverage would have significantly low limits for dental, prescription drugs, hospital stays, etc., and would likely not cover eyeglasses, orthodontics, medical devices, certain therapy etc. Under an HSA, all of these items can be covered at a fraction of the cost, in fact, the savings under an HSA can be quite significant – consider the following example:

Jesse is a small business owner, has a spouse and 2 school – aged children. If their medical/dental expenses were $2000 per year, they would have to pay this with ‘after-tax’ dollars, therefore requiring gross income of approximately $3000 per year. However, only a small portion of the expense on for medical would be allowable as a tax-credit on their personal taxes. (medical expenses must exceed 3% of your taxable income before any is allowed for a tax credit) If they were to obtain group insurance, lets assume they paid $300 per month for coverage. Although some this would be deductible by the business as employee benefits, a portion of the plan would be a taxable benefit to Jesse, and the plan would have restrictions.

Now, let’s assume Jesse sets up an HSA for their family. By having the company contribute $200 per month to the HSA, Jesse would effectively have $2400 per year of ‘tax-free’ money to spend on virtually any medical expenses. The company would gain the benefit of a 100% tax deductible amount of $2400 per year.

As the money ‘belongs’ to Jesse, she may determine what expenses to submit for payment; orthodontics, eyeglasses, physiotherapy, contact lenses, prosthetics… and the list goes on.

There are other great benefits to an HSA as well:

Employee retention products; you can establish an HSA for your employees, setting the contribution amount at whatever you want – all employees do not have to be treated equally. ‘Bonus’ payments may be added to the HSA, incentive prizes etc. You can add an insurance component to your HSA – if someone experiences a catastrophic event, the insurance will pay when you exceed the value of funds in your HSA. You can add emergency travel medical to your plan – safeguard for when you are out of the country. One of the best benefits, completely unlike insurance, because the money is YOURS, you can carry forward any unused values at the end of the year to the next year – you do not lose any of your money. Setting up an HSA is not difficult, and generally only takes a couple of days. There is a small setup charge, however, the tax advantages as well as the health advantages far outweigh this fee.

Continuing with our cover story, lets look at the tax benefits of the HSA program for Jesse:

Assume Jesse earns $50k per year and her spouse earns $45k per year. They have family medical expenses of $3,000 per year. To cover the ‘after-tax’ cost of $3k, they would have to earn roughly $4,500 before taxes. Then, they would be entitled to a medical expense credit of only $251.62 The ending result, They still expended more than $4,000 of gross income to pay for their $3,000 in medical expenses.

On the other hand – if the company contributed to their HSA, $250 per month, they would be out-of-pocket $0. The company would realize a 100% tax deductible expense of $275 per month. (An HSA is a ‘costplus’ program that carries a 10% administration fee, paid by the company – the employee never has to pay a fee.) From the company perspective, as they have a tax deductible expense of $3,300 per year, assuming a corporate tax rate of 22%, the corporation saves $726.00, therefore, the actual ‘cost’ to the corporation is only $2,574 to give Jesse the BENEFIT of $3,000 per year in FREE medical costs.

HSA’s are not only for Corporations, a sole-proprietor can also realize an even greater benefit – if their marginal tax rate is greater than 22%. The business receives 100% of the tax deduction, whereas personally, the individual would only be entitled to a small non-refundable tax credit.

CRA, in recent Tax Information Bulletins, completely endorses Health Spending Account Programs, get yours today and give your family the medical peace of mind you deserve, and start saving your hard earned money.

Business Plan For a Small Business – What Purpose Does it Serve?

admin — Fri, 14 Jan 2011 20:02:57 +0000

One of my favorite types of projects is working on small business plans with clients. There is an air of excitement as they work out their ideas and put their dreams on paper. I always think that I might be witnessing a birth of another future corporate giant. Some of those ideas are compelling, others seem unattainable, and yet the confidence and certainty my clients exhibit leave me with no doubt that they will succeed.

The Challenge of Writing a Business Plan
As excited as these entrepreneurs are about their ideas, for many of them the actual task of writing things down in a business plan format is very hard. They would rather get started already, develop their product or service, find a location – do all the things a typical small business owner does. They have such inner clarity about every single detail and yet communicating all of it in writing – in a business plan format – seems completely against their nature. It feels too structured, almost unnecessary.

Obtaining Financing
And yet, especially it today’s world, it is necessary. Most of the time the purpose for a small business plan is to obtain financing. No matter which group you are thinking of approaching – venture capitalists, commercial lenders, potential investors – they will all want to see a formal, written business plan.

Even though many people use business plans primarily, and sometimes only, as financing tools, they tend to write them in a way that puts the venture in too optimistic a light. Even if it gets you the cash you wanted, it will not help you succeed, because if the business has not been well thought out, or if the risks are too great, it will fail.

A realistic and objective business plan that also conveys your excitement about your business idea and your confidence in reaching your goals will have a much better chance of not only getting you the financing you need, but also fulfilling the other purpose it was meant to serve:

Planning a Business
Yes, that’s it! A business plan is a “planning tool”. That is its primary function and purpose. And it does this so well that shrewd business people like investors and bankers use it to determine who will get financed by them and who will not.

And you too will benefit from using it the most when you see it as such and not only as a sales tool.

It is a structured approach to refining your ideas about your business and devising a plan of action taking into account all aspects of the future enterprise: marketing, personnel, operations and finance. It helps you translate your ideas into actionable goals and it helps to predict your financial resource needs and financial results.

As you fine tune it, you will find out that it allows you to make many mistakes “on paper” and saves you from their consequences in the real world.

Monitoring a Business
The hardest business plan to draft is your very first one. Why? Because all you have are estimates and assumptions. But after a few months of operations, you will have some real numbers and you can update your plan at that point. Planning process has to be dynamic and on-going. A plan is not something you do once and put on a shelf. If it is to you, you have not realized the tremendous value it has for your business.

It should be an integral part of your management. Use it to compare your actual results to what you were anticipating. Analyze the deviations and understand them. Perhaps what you did was better than what you planned, perhaps not. Either way, you can learn from this comparison and refine your planning and your operations even further.

Any time you plan to introduce a new product, enter a new market, change the management structure, you should first prepare a business plan for the scenario you are envisioning. And don’t think this means too much time involvement for you. After all, you are just a small business owner. You cannot behave like a large corporation with a separate planing department, right? Wrong…

Large companies have large planning departments because they have learned the value and necessity of planning, but you need it just as much, if not more, because as a small business owner you do not have the reserves that can carry you through a sales slump or a bad business mistake.

This is what I always tell my clients – small businesses need all the sophistication of large companies. They actually need it even more, they just need it scaled down and adjusted to their size.

3 Vital Small Business Moneysavers

admin — Wed, 29 Dec 2010 15:14:28 +0000

Small business owners need all the help they can get when it comes to saving money. Small business moneysavers are imperative for the business owner to keep your head above water. There are many areas of your business where you may be able to cut costs and these may be things that you have not thought of, if you can save money in a couple of areas, it may go a long way in the money you can place into other areas of your business.

Instead of taking time each day to run to the post office and mail off your packages and letters each day, you can save a tremendous amount of time by being able to print postage at home. This is a great small business moneysaver and you will save time and money in the long run. You can also fulfill your postage needs whenever you choose and you will not be stuck on the post offices schedule.

Taking a good look at your phone bill can help you to save money. You may be paying for services that you do not use and eliminating these extras may save you a good amount each month on your phone bill. You should also compare companies and this is a great tip for small business money savers. You may find that there is a very competitive company that you can use that is less expensive then the phone company you are currently using.

You may also be paying too much for your internet service and you can also compare internet service providers also. There are many out there to choose from and you should not only look at prices, but also at the service that will be provided. You want to make sure that your internet can keep up with the use of your business and this should also be a final determination factor.

Taking a close look at your surroundings may help you discover many other ways to save money and you may be able to free up even more money and this can help you change the money that you are receiving each month in profit.

Small business moneysavers can create more income for the small business owner and there may be many services that you are not even using and only having the things you need for your business can make a big difference in your monthly income.