Financial Planning for Your Small Business
Having a Business Plan is a Roadmap to Success
If you don’t know where you’re headed, any road is okay. But, if you are planning for success, taking the right road is critical. A 2015 business plan is an essential roadmap for business success.
Business plans differs, depending on the individual specifics, but there are some basics general concepts that apply to most businesses. There are several important planning steps required. This article will highlight these key steps.
Describe Your Company
Your company description provides information on what you do, what differentiates your business from others, and the markets your business serves. As you do your written business plan for 2015, include:
- Describe the services and/or products your company provides
- Describe the customers and markets your company targets
- Describe the problems your company solves for its customers
- Describe how your products and services meet these customer needs
- Describe the competitive advantages you business has –such as your location, expert personnel, efficient operations, and problem solving ability
Describe Your Target Industries and Customers
Describe what industries your potential customers operate in. List the major customer groups within your industry. What are the critical needs of your potential customers? Are those needs being met? Are you able to meet the needs of your customers?
Narrow Your Target Market to a Manageable Size.
Many businesses make the mistake of trying to appeal to too many target markets. Remember, you cannot be everything to everybody. Select your targets carefully.
Describe Your Sales and Income Goals for 2015
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Realistically, based on past performance, what gross income (sales/commissions/fees) can you expect?
Describe the Customers that will Provide the Income
Realistically, based on past performance, what customers do you expect will provide the income? Explain the logic behind your calculation and conclusions.
Describe Your Communication Strategy
How are you going to reach your customers? Consider using a combination of the following tactics: promotions, advertising, public relations, personal selling, and printed materials such as brochures, catalogs, flyers, etc. Decide which works best for your business. You cannot afford to use them all.
Describe Your Fees, Commissions, and Pricing Structure
Plan in advance where, when and to whom you will charge what prices. Avoid getting trapped into offering unnecessary discounts and concessions.
Describe Your Financial Projections
Are you are going to seek outside financing? Do you have adequate internal financing? Develop your financial projections after you’ve analyzed your 2015 marketing goals, and have set clear objectives–that is when you can allocate resources efficiently.
Make sure that your 2015 business plan matches your funding availability. Be certain that you recognize the business assumptions you have made in your projections. Monthly, check your actual business results with your projections and assumptions. Identify the causes of missed targets. Make corrected assumptions and projections monthly. It’s much better if you catch mistakes early, before they cause damage Planning for a successful 2015 is a year-long ongoing project, not a “one time do it and forget it project.”