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58
StreetSmarts
Budget
Your budget puts numbers to your strategy. Whether it
entails a future business or personal loan, this is the part
of the plan that financial folks will read with the greatest
attention. Create 12-month cash-flow and profit forecasts
that have an estimated two-year projection. If you have
been in business for more than two or three years, you
have a history of annual growth that can provide a more
accurate projection.
Look at your monthly expenses. Write down every
expense you can think of. Even if you work out of your
home, costs are associated with electricity, phone service
and office supplies. Be realistic and pessimistic. A wise
banker once told us, "Once you are finished with your
sales forecast and expenses, then double your expenditures
and halve your forecast."
Completing your business plan
Start your business plan with a brief business profile that
provides:
1. A description of your business, along with the products
and services you offer
2. The physical makeup of the business, including profit
margins, number of employees and location
3. Your business growth to date
4. The markets you ser ve and your geographical scope
5. A description of your competitors and your competitive
advantages
As you work through the three key elements just mentioned,
the goal is to outline how you plan to move your
business from where it is now to where you want it to be.
Importance of market research
An area overlooked by many businesses is market
research. It is too often a weak link in their business plans.
Market research needs to address:
1. Financial, economic and market conditions
2. Key suppliers
3. Potential customers and competition
4. Issues that do or can affect your industr y (for example,
the need for Payment Card Industr y Data Security
Standard compliance)
Your business plan should clearly indicate that you have
done this research.
SWOT
A great way to provide a summation to your research