Working Out A Business Plan
As I have mentioned in earlier posts, there are a lot of people who dream of starting a business but don't think about doing a business plan first -- especially when it comes to getting into an Internet business.
Somehow, they think that just by following what the hundreds of Internet marketing "experts" say, they can start today and make money tomorrow.
Well, the first thing I say to these people is "Don't quit your day job yet".
For that reason, I have to emphasize to do a quick business plan first in order to know what you will have to have in order to replace your salary.
And speak of salary, when you do a business plan make sure to include your salary in it, so that you can calculate your expenses *including* this most important expense.
A lot of people will exclude it from the expense calculation and then look at the net income bottom line to see what's left for salary. Well that's not the best way of doing it.
First of all, if you do a business plan for the bank or for some investors, you have to have it in the proper place and that is within your operating expenses.
Secondly, your working percentages of expenses are affected by that large expense. Let's face it salary is one of the largest expenses of a business operating statement.
If you read my last post, you saw a quick breakdown of initial sales and expenses to work out in order to understand how it works.
In this post, I'll just add a few more things that would be part of making a business plan, which take you beyond the initial instant overview.
Once you get the initial idea of what a business plan requires you will need to do these next steps:
* Develop an Initial Operating Expense Projection
* Do a list of Launching Expenses to incorporate into your projection
* Expand the Initial Operating Expense Projection into a Year 1 Working Operating Statement
* Include a Cash Flow and Accumulated Cash Flow bottom line to show your peak financial need
* Expand the Year 1 Operating Statement Projection into a Year 2 Projection
* Set up a Monitoring Worksheet for your Monthly Actual figures versus your projected figures
A lot of people also do not see and understand how important the planning of *all* expenses is when thinking of starting a business. As I already said above, even the owner’s salary must be provided for in the vision. They just think of the "self-employment" and the "sales" they'll be "automatically" getting, and assume they'll be able to live on it.
And it doesn't matter what kind of business it is -- whether it is ONline or OFFline -- this works for any type of small business start-up. It works on basic figures that you can expect a business to make no matter what product or service it provides.
How much money do you need to live? You need to pay for your shelter, food and necessary expenses. If you're single, you may get by with $25-30,000 to start. If you're supporting a family you'll need more! How about $50,000, $100,000?
In the financial business, everything is relative!
After all of the financial projections have been made, the next important and indeed "critical" step is to MONITOR monthly. This is one of the most crucial function of a business plan. This is where a lot of business folks fail. They may do a business plan, but they never look at it again.
Does that sound like a lot of work? Well, not really... it should be fun -- it's part of business.
I can't cover everything about this on a post... however, if you click on the tab above under "Business Plan 201", you can read more details from where I leave off here... just go over now and see for yourself.
Blessings and Success,
.
