Business planning

The lack of a business plan is the biggest error most business owners make, in my opinion. As an accountant, here in Hamilton, I see many clients get frustrated because they are not achieving results. Business Plans don’t need to be complex or out of reach, but they are the measuring stick for business owners to evaluate their successes.
Business Planning
A simple business plan is much better than no plan at all; I highly recommend creating one even if you start small and lack specific details. Let’s look at the simplest parts of a plan to help you create one:
1. Key Success Factors – What are the key things that you must do to be successful? Write these down and make sure that these are the core of your business! Example: Each customer must leave with a smile, etc.
2. Marketing – How are you going to generate sales? What do you need to do to bring customers through the door? Design your image, get a web presence, figure out what you need to do to generate leads or sales.
3. Sales flow – Write out the forecasted sales and be realistic; there is no sense in fooling yourself! Trying to achieve riches without knowing how to generate the sales create chaos. Know your sales, and when and where they will come from.
4. Profitable – Make sure your sales are profitable. Calculate the costs and see what you are selling your product or service for and then see if you should adjust your prices. Selling a pencil for $100 when no one will buy it is futile while selling the same pencil for $1.00 when it costs $2.00 is self defeating. Know your costs.
5. Create your projected profit and loss statements and your cash flow. Each of these are critical to know and it’s just as important to know when you are going to be short. This will allow you to plan when to get more money to cover the shortfalls. This will also help you to know if you can pull money out for yourself.
This is a simple plan but necessary to start. I hope for your success. Brought to you by your friendly neighborhood accountant.
Keep things simple!