It’s a natural tendency of lots of new entrepreneurs to focus their efforts first and foremost on the written portion of their business plan and overlook completely the business plan financial section which is, if anything, more important to the overall success of their business than the written portion.
Most likely this is due to a lack of financial experience and their inability to figure out how to approach the process. In order to create a financial plan it is much easier to start with financial software that can take the entire burden of understanding accounting or finance out of the equation and allow the business owner to strictly work on gathering the numbers that need to go into the plan.
The numbers are things like how much in sales the owner expects the new business to produce and what costs and expenses are going to be associated with those sales. In finance, these numbers are what are called assumptions and how you come up with your assumptions is key because faulty assumptions lead to a worthless financial plan.
The best way to do it is to have experience in the industry you are entering so you can be very confident what things will cost and what kind of sales you can expect.
Lacking this, the next best thing to do is study existing companies and go out and get actual price quotes for the cost of whatever it may be that your business will use including materials costs, average industry salaries for your area and lease rates or other critical parts of your financial plan that will most directly effect your chances of making a profit. You can estimate the less critical things like office supplies and one time costs like buying computers and office furniture.
Although most people tend to put off until last the things they are least comfortable with in this case putting off creating your business plan financial results is going to hurt your chances of creating a high quality plan overall since the numbers and the plan work together. Use business plan financial software to take the work out of the accounting part and then follow the guide that comes with the software to help you gather all the numbers you need and the job will be done in no time.
By: Matt Remuzzi
Posts Tagged ‘Business Plan’
Creating the Financial Plan Portion for Your Internet Business Training Program
December 8th, 2009
If you are enrolled in an Internet Business Training Program then you need a financial plan within your business plan. A business plan is tantamount to any successful business as is the financial plan that goes with it. Having the ‘Financial Plan” portion of your business plan will keep you from purchasing things you didn’t plan for and don’t necessarily need.
Your financial plan should break down how much you want to give yourself for a salary, the cost of your Internet connection, the cost of a computer should you need to buy one, the cost of your hosting each month, the cost of the domain name or names you want to buy and any other expenses you can think of. Some expenses are fixed and continue on a monthly basis, others are one-time expenses, you must include these but separate them by their respective categories. Next, your financial plan should have ‘budgets’. Budgets for things like new tools for automating your business, new systems that will increase your productivity, and education programs that will further your skills are excellent ways to forecast a solid plan for what you do want to buy and when.
These types of financial plans allow you to know that if you want to purchase a ninety seven dollar information product to teach you about marketing, a piece of software that will help to automate your business, or a seminar to learn new strategies or make new partners, you will know when and if you can make that purchase. Having a financial plan like this eliminates the tendency to buy every new product that comes out on the market which claims to be the next best thing for your Internet business. This also relieves the hemming and hawing stage of ’should I buy this or should I not?”
Financial plans usually are the first sub topic of any business plan. These plans are meant to keep your finances in check while operating your business. This is essential for any business to be able to chart and stay on a track of fiscal responsibility.
By: Rebecca Pinkerman