Last week I talked about the importance of establishing a business plan and how it is important to fully transfer your thoughts onto a document of record. It will help to keep you on track, remember the direction you started, build the confidence that you have thought things through, as well as bring all business partners together on the same common ground. Nothing is worse than to have multiple partners with different agendas on the direction of the business. This week I talk about the Financial and Marketing plans. I will also talk towards bringing all these together for business growth. It is important that all the plans become live documents. Nothing is set in stone. As things progress and the business begins to roll forward, it may become apparent to adjust the direction slightly.
The financial plan is arguably the hardest to develop and the scariest due to its impact to the organization. Developing the financial plan will force you to consider any and all costs involved in running the business as well as your personal income from the business
which by the way can be a real shocker once the numbers are put to paper. Every aspect of the business finances need to be considered to a fine detail. This is not your personal finances but a bit more complex. Things like taxes and insurance are must haves, while continuing education and personal salary are adjustable and probably a minimum, if non-existing, at first. It will take estimation for many items if this is the first business venture. Talk to other business owners, talk to your local SCORE chapter, or even use the wonderful internet but with caution. Remember anything you can pull off the internet can be heavily influenced by authors with differing agendas than what youre looking for. Searching can be daunting and validating the author of the information can be next to difficult. Sell prices, wages, taxes, insurances, advertising and promotion, staff packages, personnel taxes, leases, equipment costs, and other taxes
have I mentioned taxes yet? Yes they are a necessary evil and you will have to count on all taxes to include Federal, State, City, property, etc. A good accountant that knows the rules, has experience with other businesses, is well trusted by others, not arrogant, and you feel whole heartedly you can trust them is a valuable asset during this time. Talk to several and do some research before settling in on one. This person will be helping to guide you financially. Run your financial plan by them to check your figures. Changes need to be a discussion leading to an agreement of understanding, not simply telling you what you need. If the financial numbers dont make sense now, you will be faced with either full trust on an accountant or struggling with the numbers throughout the startup and into maturity of the business.
The Marketing plan is a third document you will need to get things rolling. This is the one item often forgotten or simply not completed. This document should include each and every way you plan to get your name out there, attract new business, promote your product or services, and communicate to the target audience. Remember, if your target audience doesnt know what it is you do, what you can do for them, or what you are offering and that they need, you wont have much business. Consider all aspects of current technology and all potential mediums. Exploit each one available that makes sense. However, make certain you perform due diligence before spending money. Remember the Financial plan? Spending should be within budget. If it isnt, something in the budget must be adjusted somewhere. Not every medium is designed or effective for the target audience, so be smart. I have found that some of the early ideas which seem like a good idea at the time, can later prove to be a waste or a hastily idea. You have to take risks, but haphazard risk can cost more money with an already tight budget.
With the three plans developed and reviewed, you have now provided yourself a beginning road map for success. Execution is next. These three plans should also be by your side when seeking funding. With lending institutions not willing to take the same level of risk as they would prior to 2008, these documents will show you have done due diligence. Use these documents along with your selling technique to secure financial backing. Execution is your next venture. I often hear how people take on a business on a whim. Dive into it with both feet and very little forethought. In many cases the same statement comes out
I literally started this business overnight. Those are not the norm. The target market is typically specific. The product of service timing is just in front of or at the height of the need. It is not the norm and not for those whom arent willing to take blind risks. And yes, if you believe in luck, a fair amount of luck is involved. That is not to say the skill or talent is not high as well. What you dont hear are the failures. These are far higher than the successes but seldom if ever make the news. Be confident in your venture, do the documentation to vet out gaps, issues, or misses. It should not scare you out of the venture, but should redirect you to a path for success with a detail that you may not have considered.