Blog Posts

Which Markets are Best Suited for Your Products and Services?

8/18/2017

Accessing the best and appropriate market(s) that will purchase your products/services is what doing business all about. Success is predicated on identifying and reaching your target customer at the right time, in the right place at the right price. In accessing the appropriate markets, you will need to determine:

current needs to be met in the marketplace;
the demand for each need;
how current products/services meet the needs;
which markets are best suited for your products/services, which ones are not and why;
what marketing strategies will be used to penetrate these markets;
which contracting or procurement opportunities within those markets would meet sales, profit and return on investment objectives; and
what is your competitive advantage in each market.

It’s a fact that business success hinges on your ability to identify and access the markets best suitable for you to sell and deliver your products or services. It’s important to note that there are barriers to entry in most industries, including any area of government. In other words, there are limitations that can inhibit a business’ ability to enter a particular market. Limitations such as finances, expertise, size, scale, competition, relationships and capital equipment resources top the list.

Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan."

What is Included in a Financial Plan?

8/15/2017

As previously stated, the Financial Plan is vital to your business whether or not you’re seeking outside financing. It gives you and your potential lenders or investors a clear picture of your company’s financial strength. Documents typically contained in a financial plan include:

Cover letter – The cover letter simply identifies the financial plan and describes the documents included and the purpose for submission.
Balance Sheet – Sometimes called the Statement of Financial Condition or Statement of Financial Position, this statement is used to show a company’s financial position at a particular date. It’s called a “balance” sheet because total assets invested in the business at any time are matched by the sources of these assets.
Income Statement – Sometimes called the Operating Statement or Profit and Loss Statement (P&L), is used to list revenues and the costs and expenses charged against them for a specific period of time.
Cash Flow Analysis – Used to show the changes in assets (especially cash, accounts receivable, inventory and working capital) and liabilities (payables).
Operating Budget – This statement provides an estimate of sales and expenses for one year. Using historical data, you can project economic trends, inflationary increases and anticipated business changes (e.g., capital expenditures, increases/decreases in staff, production, etc.).
Estimated Projections & Forecasts Statement – This statement uses historical information to project the future. It provides information to predict what could happen under various circumstances. Projections should be made for an entire year.
Assumptions – This is a supposition that facts or ideas would be true under an arranged set of circumstances. For instance, pro forma (information before the fact) statements are prepared under the assumption that certain planned activities will yield the anticipated result. Some examples of financial assumptions are:
Notes to Financial Statements – Numbers alone don’t always paint a complete picture of a company’s financial position. For this reason, accounting notes are prepared to explain, in detail, what the numbers actually mean. For example, notes can state what accounting rules applied to the financial statement or discuss other information not included in the financial statements. If accounting notes are required, the following statement should be centered at the bottom of each page containing the data for which the notes are written:
“See accompanying accountant’s review report and notes to the financial statements.”
Key Financial Metrics (Terms, Ratios & Formulas) – Most common terms, ratios and formulas used in financial accounting and in pricing your products or services.

Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan."

How Do You Handle the Financial Accounting in Your Business?

8/14/2017

Accurate financial, accounting, sales and other management records are vital to the profitability, success and long range planning of your business. Improper recording and use of inaccurate financial information can be very costly. Additionally, if inaccurate information is used in any decision making, significant losses in revenue, time and resources are likely to result.

The financial planning process begins with a reliable accounting system. The importance of accurately recording all transactions affecting a company’s financial position cannot be overemphasized. The major components of every accounting system include:

Source documents – original documents, usually a sales slip, invoice, time card or check;
Journalizing – the manual or electronic processing of any source document into various journals;
Posting – transferring data from the journals to the general ledger; and
Trial balance – listing of all accounts, their titles and all debits and credits in the order in which they appear in the general ledger.

When setting up your accounting system, you must determine whether you will use an accrual based or cash based accounting system. With an accrual-based system, a customer could buy your product/service in August, but cash may not exchange hands until September. Even though the sale is made prior to payment, the revenue is recognized upon delivery as opposed to when payment is actually received.

With the cash based system, however, revenue is recognized at the time payment is made. For credit card sales, the revenue is recognized when payment is received. Regardless of the type of system you implement (specially-designed or commercially-marketed), it should be tailored to meet the specific needs of your business.

You don’t have to be a Certified Public Accountant (better known as a CPA) to be successful in business or understand the finances of your company. However, you must incorporate a good financial accounting system. Today there are several software programs on the market that can efficiently record and report sales transactions of your business. Quickbooks by Intuit is one of the most popular small business accounting systems.

While software programs are designed to easily, quickly and efficiently handle the financial reporting of your business, the software alone is not the answer. You will still need a clear understanding of what numbers need to be calculated and what they mean.

No matter where you do business in the world, there are rules and guidelines that accountants and bookkeepers follow for recording all business transactions. The Financial Accounting Standards Board (FASB www.fasb.org) is the independent body in the U.S. that governs what we call generally accepted accounting principles (GAAP). GAAP (pronounced “gap”) is essentially the uniform way in which financial statements are prepared or presented.

Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan."

10 Reasons Why You Need a Financial Plan for Your Business

8/12/2017

The Financial Plan is vital to your business whether or not you’re seeking outside financing. It gives you and your potential lenders or investors a clear picture of your company’s financial strength. Even in large corporations presidents and board of directors rely heavily on the “bottom line” in their decision making. This is important to note because many of the financial decisions that need to be made by small businesses are similar to that of large businesses.

If finance and accounting aren’t one of your strengths, it’s critical that you hire a bookkeeper or accountant as early as possible. But whatever choice you make, understanding the principles of bookkeeping and accounting are essential for your business success. This especially holds true in this time of economic uncertainty.

Financial planning will aid you in:

understanding your company’s present and anticipated financial position;
making sound financial decisions (e.g., major purchases, hiring additional staff, etc.);
creating and managing budgets;
determining how much money, if any, you will need to borrow;
determining how the money will be used and when it’ll be repaid or the return on investment;
filing tax returns;
passing financial audits;
settling legal matters;
measuring business success for failure; and
monthly, quarterly and annual financial reporting.

Because financial planning takes years of study and practical experience to master, hire, consult or barter with a financial expert who will teach you how to set up your financial reporting systems and handle your financial reporting.

Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan."

What is Included in a Business Plan?

8/9/2017

There are many formats and structures for business plans. But, whatever structure or format is used, business plans contain the same general types of information. The following is one structure of a business plan which includes:

Operating Plan – Details of the business you’re in, your products/services, and how they are manufactured/produced.
Marketing Plan – Details of how you will promote and sell your products/services, and the marketing and promotion activities, including social media campaigns.
Management Plan –Details how you will staff your operation.
Financial Plan – A clear picture of what your business looks like to include costs (or projected costs) on all business operations and activities you’ve identified.
Strategic (Long Range) Plan – Details of where you think your business will be in the next year, three years and five years.
Succession Plan – Details of devising and implementing a plan for transferring, selling or liquidating the business if or when it becomes necessary.
Executive Summary – A part of the Introduction that briefly summarizes every aspect of the business and all information contained within the body of the completed business plan, and is placed in the beginning, but is prepared last.
Appendix – Includes any type of documentation that supports your business plan (e.g., agreements, licenses, corporate documents, studies, articles, etc.).
Introduction – Includes the cover page, cover letter, executive summary and table of contents. While these documents are placed in the front of the business plan, they are always prepared last.
Glossary – Includes all terms that are unique to your business or industry. Don’t assume the terms throughout your business plan are familiar to individuals in your company, bankers or investors. Even if they are familiar, adding a glossary can ensure that all parties understand how each term is used specifically in your business.
Table of Contents – List and number each section of the business plan. It makes it easy for persons reviewing it to quickly locate their area of interest.

Once completed, make sure your business plan is free of typographical errors, is constructed in a neat and legible format and all pages are numbered. Also, appearance is as important as content. Hiring a professional word processor is highly recommended. Assign or hire one or more individuals to proofread. Once completed, each copy should be laser printed or copied with the best equipment available then bound before use and distribution.

Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan."

Updating Your Business Plan Regularly

8/7/2017

As an internal document, it cannot be overemphasized that business planning is an ongoing process. Updating your business plan regularly is an absolute must if you intend to stay in business and be profitable. One of the biggest mistakes entrepreneurs make in preparing a business plan is neglecting to update or revise it on a regular basis.

Because changes in your business and its industry occur frequently, it’s important that your business plan reflects these changes as they affect your business. This includes:

Trends in the industry;
Relevant laws and regulations;
Financial status of your company;
Technology;
Management techniques;
Addressing new and current ustomer needs, and most important;
New or obsolete products/services.

In making the update of your business plan a priority, set aside time each month or each quarter and force yourself to make revisions. This practice can easily become a habit and help keep your business organized and your business plan current and relevant.

Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan."

20 Things Your Completed Business Plan Will Tell You

8/4/2017

As the owner, you should know more about your business than anyone else on the planet. Whether you hire a consultant or write it yourself, your completed business plan will tell you specifically and in great detail:

what products/services you will offer and at what price;
what problems do your products/services solve or what purpose do they serve;
how will products/services be manufactured/produced;
who your customers are and how you will market to them;
what your customers’ needs are and how they’re currently being met;
how your products/services can better meet customer needs;
what your manpower needs will be;
what your initial investment should be;
how much money you will need invested or borrowed, how it will be repaid and what will be the return on investment;
whether the company has met sales and performance expectations as planned;
how the business will be scaled;
what new products/services will be introduced and when;
as products/services expand, who will be the new customers;
how will new products/services be priced;
where your business is headed and how it’ll get there;
what to do in the event the business needs to be transferred, sold or closed;
what to do in the event of a catastrophe or emergency;
whether this type of business is sustainable;
what metrics will be used to measure success; and
what is considered success.

Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan."

5 Reasons Why Some Entrepreneurs Don't Write a Business Plan

8/2/2017

Some entrepreneurs go into business and ironically are very successful for many years without ever having written a business plan. Others who take that same route are not so fortunate. There are numerous reasons entrepreneurs neglect to write a business plan to include, but not limited, to:

not taking the time because they are so immersed in the day-to-day operations of their businesses;
lack of expertise or confidence in writing business plans;
not wanting to put their ideas in writing for fear someone may take and replicate them;
not understanding that the business plan is a valuable tool; and
simply putting it off and not making their planning a company priority (e.g., borrowing money or seeking investors).

Whether you write your business plan yourself or hire someone to do it for you, having one and updating it on a regular basis, can keep you organized and abreast of whether your business is on track for success.

Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan."

How Much Business Can Your Company Handle? Conducting a Capacity Constraints Management Assessment Can Tell You

7/31/2017

Your dream of business success can become a reality. But you will need to start conducting business at a pace you can comfortably handle. Understanding capacity constraints will keep you from taking on more than your business can handle at any given time. This could even mean passing on what appears to be a great business opportunity. Too much too soon could easily mean failure for you. Easily costs can be higher than anticipated and profits lower than expected. Setting small or short deadlines for yourself that are attainable and not overly ambitions can keep you on track.

Before taking on more work or too much work, conduct a capacity management assessment to determine the additional resources you may need to perform such as:

labor or workforce;
office space;
materials and supplies;
equipment or machinery;
capital;
inventory; and
marketing.

Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan."

Being Best in Class Requires Business Execution Excellence

7/28/2017

Throughout the business start-up and business planning processes, defining and executing established strategies and using best skills and abilities to meet desired goals is the formula for business success. Developing strategies and a well thought-out business plan are of no use if you don’t properly or effectively execute the details of them to meet your goals.

Business execution excellence requires that all human resources and business resources are in lock step. This alignment ensures that each area of the company understands their specific roles and work within the prescribed framework to meet established goals. And when this alignment is absent, procedures to ameliorate any issues must be put in place. Company leaders must regularly create and communicate the overall company goals to all employees and consultants.

For effective execution excellence, your company must have:

a strategic plan that defines overall quantifiable and attainable company goals;
employees or consultants with the right skills sets in the right positions doing the right work to ensure the best use of human resources;
senior or executive staff that creates effective communications across all levels of the company that are clearly understood, motivating and engaging;
processes in place that ensure that manufacture/production of products/services is streamlined, cost effective and operates efficiently; and
an efficient cash management system that properly collects and records all transactions, strictly adheres to budgets, monitors all spending, and conducts monthly financial reporting, including bank reconciliation.

Excerpted from, "The Start of Something BIG" Your Ultimate Guide to Writing a Dynamic Business Plan." (2017)