Writing Good Business Plan Takes Time

Preparation is Most of the Work

The preparation, research, and planning which leads up to the actual writing of the plan constitutes most of the time required to create a business plan. Planning and strategizing cannot simply be done in a day or even a few days. Not only is it important to get feedback from advisors or other trusted parties, which can take time, but the entrepreneur himself must let the plan ruminate a bit in order to uncover aspects he may have missed or thought about incorrectly previously.

Research Time

Research for the business plan may be the most time intensive element of this preparation. Research should, ideally, be more than secondary sources such as articles, blogs, and industry reports. Primary sources, including interviews, surveys, or focus groups with customers, vendors, and competitors, are very important and more persuasive. Developing data from these types of sources takes a good deal of time. Even information in secondary sources must be pored through carefully to find the nuggets of interest for the business plan. Finally, research into the costs of the business can require calls and even negotiations with vendors to learn about rates and volume discounts. There is no easy shortcut for this type of direct research, which can make launching a much easier process if this legwork has been carefully documented.

Writing Time

Finally, the writing cannot be rushed, as convincing prose does not generally flow under intense time pressure. Time must be given to allow for the writing and then revision of the plan itself. Finally, time should be allowed for proofreading by qualified individuals other than the entrepreneur. This is the only sure way to spot mistakes in the plan at this late stage.

Grant Money for Small Business

In the case of government grants, the rules are even stricter. One of the first places that people often turn to is the Catalog of Federal Domestic Assistance, which is where all listings of government grants approved by Congress are announced. The problem with this resource is that there are very few programs available for small businesses.

These grants are usually awarded to deserving individuals or nonprofit organizations having some community-based project in mind. Rarely will you find a government grant awarded to help set up a for profit business. That is why when searching for a small business grant you should not turn only to the government for funding resources.

A good source of grant money is the Association of Fundraising Professionals (AFP). The AFP is considered the chief professional association for fundraisers. The association was formerly known as the National Society of Fund Raising Executives (NSFRE). Their website at AFPnet.org offers sections on ethics, public policy, publications (including AFP’s online bookstore), professional advancement, local chapters, jobs, and youth in philanthropy (along with a member gateway/dashboard).

Besides that, the AFP also provides a list of organizations (including their websites) that are among the top basic resources of grant money. Foremost on their list is the Foundation Center at FDNCenter.org, which publishes the revered Foundation Directory.

Consider contracts. Government money can sometimes come in the form of contracts. “If you can demonstrate that your company can execute a budget line item, if you can shape part of your idea to what the government wants done for a particular project – say something educational or construction-oriented – if you can fill a need, you can compete,” says Francie Ward, CEO of the Business Owner’s Idea Café at BusinessOwnersIdeaCafe.com.

Info of Cash Flow Management

Successful cash flow planning does not require a degree in accounting. What you need is real-time understanding of where the cash is originating, where it is going, and how much is left over (just like you do at home). Businesses need to operate with a cash flow model that looks ahead one year, month by month, and is updated with actual results every week.

Create a Worksheet

The formula for successful cash flow management is deceptively simple. Money in. Money out. Money left over. If there isn’t any money left over, then you need to do something differently.

Start with Sales. Sales is work performed that is documented by cash register receipts, guest checks or invoices. Project the amount of sales you anticipate month-by-month starting with the current month. Sales should fluctuate when you consider the seasonality of your business. Break the sales into categories and be conservative.

Project your collections month by month. Collections are the money you put into the bank in the form of cash, checks or charge card vouchers. If Sales do not equal Collections, you either have accounts receivable or a cash control problem.

Review your expenses. Define your expenses into two major areas: Cost of Sales (expenses that fluctuate with sales such as product costs) and Overhead Expenses (expenses that do not fluctuate with sales). Define the cost percentages for your major sales categories. Forecast all other Overhead Expenses (rent, utilities, insurance, licenses, etc.). Project all expenses out in the month they will be paid.

Forecast your payroll. List your current and anticipated employees and categorize them as Cost of Sales labor or Overhead labor. Cost of Sales labor may be projected in part by a target labor cost percentage. Estimate payroll expense per employee (average hours worked, rate of pay) over the next twelve months.

Evaluate Your Profitability

With monthly sales and expenses projected, business profitability, feasibility and value can be determined. Total Sales minus Total Cost of Sales Expenses (including Cost of Sales payroll) minus Total Overhead Expenses (including Overhead payroll) equals Monthly Cash Reserve. This is also your profitability. Is there any money left?

What debt are you servicing? Evaluate this debt separately from your profitability. Debt takes many forms including notes, loans, credit cards, leases, and lines of credit. When businesses must restructure their debt in order to improve cash flow, lenders expect the business’s Balance Sheet to look a certain way in order to qualify for financing.

Personal Guarantee for Small Business

Many personal and business lenders ask for a personal guarantee when it is the initial application for a loan or mortgage or when they have some doubts about the borrowers’ ability to repay the loan. It is very common for example for a bank to request a personal guarantee from a parent or guardian when a young person borrows for their first car and it also fairly common practice when it comes to the first business loan or credit request from a small business.

These types of loans are seen as a higher risk by the banks and therefore they want some added assurance that they will get their money back if the kid smashes up the car or the small business goes under. Neither would be an extremely unusual event and the banks have learned very well how to protect their interests along with collecting their interest rates.

In the case of business loans and lines of credit, the individual owner or operator is often asked by the bank or lending institution to put up their own personal guarantee to secure the required funds. That might mean assigning a portion of their property or assets over to the bank or it may come in the form of an actual cash guarantee. It doesn’t have to come from the individual however and a personal guarantee can be provided by a family member, a friend, or another business person in the community.

While it may seem a little unfair to the borrower to be asked by the lending institution to provide a personal guarantee it actually allows both sides to get what they want. The small business operator gets the funds they need to stay in business or make necessary improvements while the bank gets assurance that it will get its money back. It is simply another way of doing business.

A personal guarantee is a sign to the lending institution that a small business owner is ready to back his or her business with their own money or that they have such standing in the community that someone else will provide that assurance and guarantee on their behalf. A personal guarantee only really comes into play if the borrower cannot pay the money they borrowed back and in that case the business must be either poorly managed or ultimately unprofitable. The best way to avoid that scenario is for the small business owner to ensure that their business is a success. Then the business owner, the guarantor, and the bank will all be happy.

Entrepreneur to Employer

Like all businesses you experience growing pains. Cash Flow is sometimes tight, customers come in ebbs and flows but you continue to make progress.

You win a few major contracts and at the back of your mind you realise you need to make some important decisions for the future.

Your hours at work have been steadily increasing and the reason you went into business, lifestyle, more time with the children, sport, or whatever your passion is, these important parts of your life have been dropping off lately and you find yourself getting resentful. Take control!

So how do you make the jump from entrepreneur to employer?

Employing someone in your business for the first time brings with it obligations and responsibilities. It is exciting, has possibilities and can result in considerable reward! Do your planning and sums first before making the leap.

Some responsibilities you need to consider are;

  • Cash Flow. The old adage that ‘cash is king’ is true.
  • Work Flow. Do you have enough work in the pipeline to fund your business expansion and sufficient work and marketing processes to ensure the work flow continues.
  • Business Plan, Mission & Value Statements. Your business plan should be revisited to ensure that you are working in alignment with your medium to longer term objectives.
  • Federal & State Employment Laws. When you think about employing someone for the first time you must consider the employment laws.
  • Workplace Health & Safety. You must consider workplace health and safety obligations when employing someone.
  • Insurances. Have you considered insurances? Doctors, Dentists, Accountants and other professional bodies have specific requirements. Check these out!
  • Premises. Employing someone may result in your need to source larger premises or make alterations to your existing premises. Do your sums.
  • Business cards marketing, office supplies. Do you need to purchase business cards, new stationary, office supplies and what is the cost?
  • Assets and Equipment. Consider assets and equipment.
  • Your personal stress tolerances. Do not underestimate the personal stress that you may experience as the result of employing someone.

Take advice sooner than later and be encouraged. Many others have trod the same path and succeeded.

Finally employing someone is exciting and while there are challenges there are opportunities. Sales, Profit and more time for you can become a possibility and reality.

Personal Responsibility Is The Prescription For Anxiety

There’s a lot of anxiety out there this summer. I’ve observed a lot of worry among the talented folks I’ve coached, and often they’re frozen by it, unable to contribute the inspirational leadership they’ve always brought to their teams and organizations. In many cases they need to learn (and practice) a truth held dear by generations of great professional salespeople: If worry is the sickness, action is the cure.

Salespeople are sometimes frozen by worry. They worry that they’ll be rejected, that they’ll be left feeling bad. Like most coaches and sales managers, when I’m working with a salesperson in this mode, I always recommend action – bold, positive action, plenty of it, and right away. Make a service call to a happy customer… catch up on some paperwork… follow up with new information for someone who’s still contemplating your offer. Do something, and build some positive momentum. Suddenly the numbers game that is sales work starts to look less intimidating, and it only takes a little success to make you forget all about the worry.

I once worked for a leader who described worry as “negative goal setting.” When you set positive goals, you start by imagining a desirable future state, and then you go about quantifying it and planning your work toward the goal. When you’re frozen by worry, you’ve let yourself imagine a bad future… no wonder you aren’t doing anything! You don’t want to work toward THAT future! When I really got hold of that concept, my sales increased dramatically.

So you aren’t a salesperson? Most of my clients these days haven’t been. But many are still worried, and the anxiety is still holding them back

If you’re worried about your job, start a business on the side. You can do it with a surprisingly low investment of time, energy, focus, and money… especially if you start a home-based internet business. There is money to be made out there in cyberspace, and if you can bring enough energy to learn the business, you can get your share. And soon that extra cash flow will help free you from worry, and you’ll find your “day job” easier to tackle. Meanwhile, you’re doing something… you’re moving… you’re not just sitting around waiting for something bad to happen.

If you’re worried about your health, start today developing some healthy habits. I’ve published many articles that discuss five key daily health practices I like to refer to as The NEWSS: Nutrition, Exercise, Water, Sleep, and Supplements. Make a small change on each of these (you can do it today) and you’ll start having the sort of positive mental attitude that will help you banish the worry. You won’t become super-healthy in one day, but again, you’ll start moving toward a positive future. Cut the garbage out of your diet (see if you can eat just fresh, real foods today), go for a walk (better yet, a little jog), drink two liters of water (and cut back on alcohol and caffeine), get a good night’s sleep (at least eight hours) and take a good multi-vitamin (I can recommend a great liquid nutraceutical that you can feel pumping up your energy right away).

If you’re worried about a relationship – any relationship – pick up the phone or jump in the car and spend some time with the person. Think of something YOU have done that has possibly damaged the relationship, and sincerely apologize for it. Make sure you are brutally honest with yourself! If you are, either you can think of something legitimate, or you can’t… in the first case, your action is clear (say you’re sorry!); in the second, maybe the relationship needs a break, or maybe it even needs to end (in the case of a romantic relationship). Either way, make a conscious decision, and go with it. If you can’t apologize, resolve to let things lie still with that person for a certain amount of time, and then plan to call them after that. Don’t just wait to hear from them, or for them to hurt you. Take personal responsibility, and stop worrying about it.

If you’re worried about your government, or the economy, or other big things that don’t seem accessible to action from little-old-you, rethink that. What action can you take today? Two months from today, those of us who worry greatly about the direction our American government is taking our country can take the important action of throwing the bums out at the ballot box… and in the meantime, we can keep ourselves informed, work to inform others, and maybe even volunteer for a campaign. If your side doesn’t prevail in this election, heave a deep sigh and start taking daily action to work toward the next one! But don’t just sit around and worry, or worse, gripe and complain. It doesn’t do any good.

Find Success in the Import Export Business

In the early nineteen eighties, one of the most popular things in Soviet Russia was American made blue jeans. Exporters made money hand over fist selling American made products to the East. Now, twenty years later, we have seen the fall of communism in many cold war countries. This has opened the door to the import export business companies to make handsome profits by moving goods from one continent to another.

Blue jeans in the former Soviet Union sell as good now as they did twenty years ago. But now it is not only blue jeans. American cars, computer and electronic devices, even beauty products are becoming a big business all over the eastern continents.

China has shown automobile sales in the last two years that rival the United States. Western culture, a mythical and mystical thing to many eastern countries, is being shipped in everyday. Trade embargoes are loosening and the profit margins are now being recognized all over the world.

Even the European nations are seeing an increase in their exports to the East. There are world economics at play now that were not even dreamed of twenty years ago. Imports and exports are being moved everyday, and you could play a profitable role in it all with your import export business.

Not only is there still the crave for Western Culture in the East, there is the need for lower cost goods here in the West. Importing goods from these same places can be as profitable as exporting to them. Imported products can be sold in a variety of ways from online stores and auctions to a storefront in your hometown.

There are also companies set up online that do importing and exporting and will contract you as a reseller. This can become extremely profitable. Most of the time you are not even required to keep an inventory. There is also a market for buying the imports these companies bring in and reselling them on auction sites and in retail outlets.

You will need to be aware of any taxes involved in both importing and exporting goods. Customs regulations and federal laws on imports and exports will need to be clarified before you start. Make sure that everything you are moving is legal and acceptable between countries.

Also, having a little capital to work with, say around one thousand US dollars; will allow you to get off to a solid start. Exporting goods on the Internet is one of the least expensive ways of getting started and can be done through existing import export companies.

Researching import export businesses can be done effectively online. There are many such small businesses (or at least, they started that way) who are willing to share the secrets of their success. Importing and exporting is not rocket science, nor does it require you to have a Ph.D. in economics.

One of the easiest things about import export businesses is that you are not dealing with direct sales. Most of your sales will be in bulk to distributors on the other end. This means that you will have to have little or no technical information about the products themselves, only whether they are legal or illegal to sell to that location.

Small Business Resources

Small Business Resources. If you are running a small business, then you will love the fact that the Internet affords you the unique opportunity to access a variety of small business services. In fact, the Internet can guide you to resources that can help your small business become successful. Moreover, you will find that managing your l business becomes a far easier task.

Small Business resources can provide you with information pertaining to business basics, banking basics, advertising hints and strategies, proper software applications for business management, business management strategies, marketing fundamentals and much more. In fact, when you research resources on the web you will be pleasantly surprised by all of the information available to you.

Articles are an excellent source of information and can help you learn how to manage your business successfully. Frequently articles pertaining to small business focus on the minute details of business management and you can read about anything from proper tax applications to how to motivate your employees. What’s more, such articles are frequently offered to you for free or at minimal charge and the information they contain is invaluable.

Alternatively, you can access forums where you can discuss small business issues with like-minded individuals: individuals that are encountering or have dealt with the same issues that concern you. Forums are a wonderful way to discuss how to motivate employees, how to handle tax issues, how to increase your bottom line, how to affectively use merchant accounts or how to handle the day-to-day workings of yourl business. You can also get some great advertising ideas.

Perhaps you have a brick and mortar business and you are looking to extend your business to Internet consumers. Then the Internet will definitely provide you with the services that you need to get your web-based business started. You can sign up for merchant accounts, find web hosting for inexpensive monthly payments, and get your business online within a few weeks. Plus, small business resources will advise you about the best way to pursue your Internet business and how to get yourself successfully established on the World Wide Web.

Communication is Good Business

Worried about customer satisfaction? Then a staff with improved communication skills will have an immediate effect in this area. Frustrated that you have to spend so much time in repeating requests; re-stating statements and fixing up the results of miscommunication? Just think how much more effective time you would have with improved personal communication skills.

There are three simple rules which, if followed, will improve your ability to communicate.

Learn to Listen. Communication is a two way process, but if you start with focusing on your listening skills you will have a much better understanding of what people actually say to you.

People do not listen very well. They are more concerned with what they are going to say as soon as they can get a word in edgeways, than actually giving attention and interest to what is being received. Change your focus and become a listener; and that means concentrating on what is being said without judgement or bias.

Listen with movement; which means encourage the speaker with gestures. Nod in agreement; use eye contact to maintain interest.

And finally if you do not understand something take the time to clarify it. A simple question such as “I am not sure I understand what you meant, can you explain it again to me.” will allow the speaker to rephrase it.

When you have listened, you are in a better position to undertake clear communication yourself.

Organise your thoughts. To be able to be understood you need to have a clear outline of what you are speaking about. We think very much faster than we speak, so taking a few moments out to organise what we want to say will not impact on our communication, it will improve it.

We need to know quite clearly in our own mind what our main aim is going to be. If we are not clear on this our communication is going to be erratic, unfocused and ineffective. We should ask ourselves what do I want this person to know or to do. This is the key to clear and effective communication.

Once we have it clearly in our mind, the next thing we should consider is what are the most important things my listener needs to know for me to achieve this aim. Three pieces of information at one time is all that your listeners can absorb. So quickly select the three most potent points you can use and you’re done.

Monitor the feedback. While you are speaking to your three main points watch your listeners for feedback. You may notice that they are looking confused. Stop! You may need to rephrase the statement, or restate the information in another way. You might find that your listeners clearly do not agree with what you are saying, and you have the opportunity to allow them to voice their opinions. Being able to address concerns immediately usually has a very positive effect on your listeners.

You will also be able to see the nod, the smile and the positive body language which will indicate that you have agreement.

In business today, there is very little activity at any level which does not depend on good communication skills. And yet when considering what can be done to improve a company’s position in the market, it very rarely even gets a mention.

Start Building a Relationship With Your Bank

Tell Them What’s Happening and Build Trust in the Process

Communication is one of the most important aspects in building a relationship so tell the Bank what is happening within your business. Send them quarterly reports which cover the key things which have happened, your management accounts, and the good deals you have picked up for example.

No one likes surprises, and this flow of information will put the Bank at ease, especially if you are already borrowing. Aim to meet your Manager at least once a year. Regular updates will quickly build a relationship and an element of understanding of what your business is all about.

… And Don’t Forget The Bad News!

If you are committed to regular contact the communication between you and the Bank should also include any bad news you may have. Perhaps not so important if you are not borrowing, but if you do have a loan then an early call about a problem, whether large or small, is better that the Bank hearing about it through the grapevine.

Even if the problem is not a potential business destroyer a phone call to inform, especially if it could disrupt your cashflow, would be appreciated by the Bank, and help build credibility and trust. The willingness to share both good news and bad news will demonstrate that you can manage your business effectively and dispassionately.

Understand Why They Do What They Do

Banks can do strange things sometimes, and Bank charges, well … where do you start! If you are looking to build a relationship with a view to borrowing money or to extend what you already have, then don’t go looking for constant arguments. Understand how Banks make their money and why they do what they do.

This doesn’t mean rolling over and accepting every charge which comes your way; by all means query and challenge, after all it’s a further example of the type of business person you are. What I am saying is that accept what you can’t change, don’t keep going on about it otherwise you will put your relationship at risk.

Ask Them to Visit

Seeing a business on the ground is the best way to understand how it really works. Invite the Manager to visit your premises (as long as it conveys the impression you are looking to create of course!).

I know you will agree when I say that very often you can get a ‘feel’ for a business very quickly after visiting it for the first time. You can either sense an atmosphere of excitement or desperation!

Bank Managers visit many businesses and so they can become very attuned to these subtle messages.

Write a Business Plan

There is no better way of getting the Bank to understand your business than writing a Business Plan. A well prepared and written Business Plan will tell the reader everything they need to know about your business.

Get Building

It’s a fact of life that sometime in your business experience you are likely to need a Bank on your side. Start building a relationship with your Banker today!