Posts Tagged ‘sales’
Monday, August 3rd, 2009
The best business plans tend to look like a truck ran them over. They are well-thumbed, heavily annotated, and popping their staples or bursting their bindings. That means they’re being used. The worst plans are clean, pristine documents that went straight from the printer into the file cabinet. That means they’re not being used. That may mean that nobody needs them, which might suggest that the company is continuing to follow the same old routes to get to the same destinations. Or it might mean the business plan isn’t worth the paper it’s printed on for those who should be following it. Either way, the company may be in serious trouble.
Tags: business plans, documents, marketing schedule, methodology, sales
Posted in companies, funds, innovative marketing, management, stocks | Comments Off
Monday, August 3rd, 2009
A business plan helps you achieve your goals. It also helps discipline the way you think about what you’re doing. But business plans have another important purpose.
Companies need business plans to apply for loans, grants, or other forms of funding to start or expand the business. Lenders and financial managers like to see something in writing that shows a firm is committed to its objectives and knows how it’s going to accomplish those objectives. Without a plan, serious outside funding—or any funding, for that matter— might not be available. After all, if you were in the business of investing money, how would you select the companies that would be the best risks?
But that means you need to write your business plan in different ways for different financial participants:
Plans used to attract equity investors—financial partners who will prosper as the business prospers—must be written to show how investors will gain from the company’s success. Investors expect a high rate of return, so they will be looking at growth and profit projections. Plans that project a successful profile are what equity investors are seeking.
Plans designed to appeal to lenders must demonstrate methodologies for repaying loans. At the risk of being simplistic, lenders have little financial stake in the success or failure of the company. They’re interested in how the company plans to repay the principle and its interest. And lenders are more likely than equity investors to be
concerned about cash flow. Your business plan should provide a timetable with repayment amounts the lenders believe your company will be able to make.
Tags: benchmark, business plans, marketing schedule, methodology, sales
Posted in developers, equity, expenses, innovative marketing, loans, online bank | Comments Off
Monday, August 3rd, 2009
The business plan offers general and specific guidance on reaching company goals. It outlines actions. It also separates the dreamers from the doers. It is often the great equalizer between the enthusiastic idea generators and the serious business people who will accomplish their dreams.
Business plans are usually annual, based on the fiscal year. But there also are multiple-year plans—the most common of which is the five-year plan.
An annual plan is operational and necessary to manage the company’s economic needs for the coming year. A five-year plan is more strategic and designed to chart the firm’s direction. In addition, five-year plans should be rolling plans.
The thinking behind a rolling five-year plan can be applied to other cyclical planning, such as the annual budget process or the marketing schedule. When May ends, for example, the managers can study the forecasts for that month and the results, determine the reasons behind the variances, then use their findings to shape a budget for the following May. Rolling plans allow managers to make the most of their budget analyses, provide greater continuity, and ease the burden of annual planning.
Tags: benchmark, business plans, economy, marketing schedule, sales
Posted in attitude, banking, budget analysis, business goals, business patterns | Comments Off
Monday, August 3rd, 2009
A wiling plan is a perpetual motion engine for your business vehicle. Once you finish the first year in your plan, you add another year to the end of the plan, so the company always is looking five years ahead. Not only does this ensure greater continuity of vision, but it also spares managers the enormous task of creating subsequent five-year plans.
Defining a sound strategy is vital preparation for success. But even the best strategy will fail without a good business plan to put it to work. The strategy is the idea behind the business, but the business plan is the first of many tools by which that idea will turn into actions.
The business plan is the where, when, how, and why of what a company must do to implement its strategy. It’s just that simple—and that difficult.
Tags: benchmark, business plans, economy, sales
Posted in attitude, business goals, business publications, innovative marketing | Comments Off
Monday, August 3rd, 2009
That’s good—as a beginning. Now, you need to get into details, by asking a few questions and coining up with solid answers:
- How are you going to increase sales?
- What expenses are you going to cut? How?
- What new products will you develop?
- How will you reach different markets in different ways?
- How can the company become more efficient? In what areas?
Of course, you may want to set ancillary goals in each of these areas. But beware of goals that set department against department, worker against worker. For example, goals for marketing, which are measured in terms of sales, might cause resentment if there are other factors that could affect sales—just as sales goals might not be met because an improvement in efficiency caused a drop in the quality of the products the sales reps are trying to sell.
Tags: benchmark, CEO, economy, sales
Posted in customer demand, employee, expenses, funds, payments, profitability | Comments Off
Thursday, July 30th, 2009
Businesses, especially new companies or old companies making forays into new enterprises, run the risk of sinking funds into the wrong end of the operation and then not having enough cash when it’s desperately needed. Adequately reserving for growth, especially during the early days of the business, is critical. It also helps to recognize the areas where cash can disappear without a trace.
No matter how prepared the business may think it is, unless it is operating in an area in which it has had years of experience—in terms of both the product and the market—the chances of anticipating the majority of risks that could come its way are remote. If managers hope for the best but reserve for the worst, they will find themselves in a better position when those cash-draining contingencies do arrive.
Tags: cash crunch, cash flow, productivity, profit, sales
Posted in accounting, banking, credit cards, financial risks | Comments Off
Thursday, July 30th, 2009
That’s good advice for any department head, no matter what the level of financial involvement. R & D managers might find need for additional research into other avenues affecting market or product, making additional expenditures necessary. Sales managers might suddenly be directed to fire several staff, incurring the cost of training and reduced productivity as part of these unanticipated changes. The product developer may find a need for more complex and expensive equipment, may see a sudden increase in the cost of raw materials, or may suddenly face new legislative restrictions on production.
If either of these individuals or companies haven’t made plans to protect their enterprises and reserve against such risks, then the demand for their product won’t really matter, because they won’t have the resources to meet that demand.
Tags: cash flow, productivity, profit, sales
Posted in accounting, customer demand, developers, payments | Comments Off
Wednesday, July 29th, 2009
First and foremost, cash flow is not the profit you make from sales or the difference between expenses and revenue. Cash flow is the flow of money in and out of a business. That’s all.
Cash is accounted for as an asset, and there are a lot more challenges related to cash flow than accounting provides. Fortunately, there are also solutions, or at least strategies, to maximize the inflow and minimize the outflow.
Keep in mind Maxim 1 of modern business:
Everything a business does takes longer and costs more than managers could possibly anticipate even in their most liberal scenario. Adjust your thinking accordingly.
What is cmhl For the sake of this discussion, consider it the company’s most valuable asset, the one you need to protect with all your might.
Tags: cash flow, profit, sales
Posted in accounting, global market, loans, online bank, payments | Comments Off