throughout this course I have learned and thought about many things regarding my business. I am glad that I have learned to create a business plan for one and that it wont be all that stressful when it is time for me to create one for my business. As time went on and I learned about demographics and psychographics, I didn’t know it was important to figure this area out until I learned the definition. At first I didn’t understand why we need to minimize our target customers, why couldn’t I just open business for whoever. I now understand why this is so. Trying to focus on helping everybody can lead to a stressful business and even failure. everybody is different. Not saying you have to turn down people who wasnt your target customer, it’s just that you should stay focus on your target customers when you advertise, promote or market. For instance I want to be a low-income accountant, helping a low to moderate environment, but I am open to all business; however when I start advertising my business I want the low-income home owners, business, families, and individuals to know I am here for them. that the prices will suit them well. I want to involve my business with non-profit agencies and any source of programs within any community that is looking out for the low-income environment. I am still thinking how things will take place and how to organize this business in order to live comfortable while helping the ones that are in my position. Its about giving back to the community no matter what work field you are in.
INFLUENCED BY THE PLAN
So this weeks blog is about the influence the book, Anatomy of a business Plan, have on my goals of becoming an entrepreneur. The book is really good I have been stressing in all my blogs; however, it did not have any influence on my view of becoming or not becoming self-employed. What it did influence is the confidence of completing a business plan for my business.
Before I started the class I knew nothing about a business plan. I didn’t even think a business plan exist. The management class I am taking isn’t even inmy education plan. This is a class I took on my own to get more knowledge about owning my own business. I knew there was more to it then just finding a location and setting up shop. This class has open up my mind to better understand what more comes with being self employed. I am glad our teacher allowed us to pick a book that most interest us, that got to do with business or I would have never known about this wonderful book.
So I would have to say the book that I am reading had an impact on me in being more confident in completing a business plan. The break down it have in each chapter is very self-explanatory and easy to follow. I love the examples the author had put in the book as well. I am a visual person and I am glad she thought about those visual learners.
This book also influenced me to be prepared. I know what to expect when it is time to launch out on my own. I know what to create in my plan when it is time. How the lay out suppose to be and what or what not to put in my business plan for it to be acceptable.
I am glad I chose this book because it allow me to gain the knowledge that I was lacking. This book will help me create my business plan for my class project as well. This book should be known for anybody that is starting off a business and for the ones who have a business but no business plan. I learned that it is something you should always have laying in your files. When its time to break out that plan, reach for it, update it, and hand it over.
FINANCIAL DOCUMENTS
This week blog will be on Financial documents, that I have learned out of the book by Linda Pinson, Anatomy of a business plan. A financial document is a projection plan of your business and it is very important to be included in your business plan. I will speak on the importance of this plan and how it is formed.
Your financial documents will consist of summaries, dispersal of loans fund statement,cash flow,three-year income, break even analysis balance sheets,profit and loss, loan applications and financial statement analysis. Your financial plan should be in this order because each section feeds off the last section. It will be easier for you to complete this section.
the financial document section is the realistic of your business plan. These our the numbers that makes up your plan and allow the lender to see your plan more visually now. You should always keep this section updated as much as possible. There are four types of financial documents: statements of sources and uses of funds from a lender or investor (only included if you are seeking funds), pro forma statements (cash flow, income projections statements),actual performance statement (Past performance of your business, new business wont have this included), and financial statement analysis(consist of your balance sheet and income statement).
When You begin you will need to decide what documents will be needed. New business seeking or not seeking a loan, existing business seeking or not seeking a loan or a business plan being written for a division that belongs to a larger company. Once you have figure this out then you can proceed with your financial documents. YOur summary will include working, growth and equity capital. It will also state why you need these funds and how much you need. Your Loan dispersal statement is letting the lender know how these funds will be used with supporting documents. YOur pro forma cash flow is all about the numbers instead of statements of words. So this cash flow will show worksheets of cash being paid out and source of cash. cash being paid out is start-up cost, inventory purchases, expenses,assets liabilities, and owners equity. Source of cash is cash on hands, sales,miscellaneous income, liabilities,and equity. Your pro forma will also have a budget analysis this will show and compare your projected cash flow with your business actual performance. The Three year income projection is your profit and loss over the three years . This will be a worksheet showing your income, expenses, net income operations and net profits loss. Your break even analysis is showing that you didn’t los or gain with in your business. this analysis will consist of fixed and variable cost and total sales volume usually completed as a graph worksheet. The Actual performance financial statements is the past activity of your business which is your balance sheet, income statement, profit loss statement, financial history or loan application.
Your Financial documents will need to be will organized, accurate and up to date to the best of your ability. These documents will be generated from your marketing and organizational plan. It takes time and commitment like every other section within your business plan. hopefully this was some kind of help for some. This is only a brief summary on this topic, please look for the book I am basing it off to get more details.
MARKETING PLAN
Today I will be speaking on a Marketing plan. A marketing plan takes time, planning and research. Out of the book Anatomy of a Business Plan, it touch on a lot of things that make up a marketing plan, such as, Analysis, Goals, Accomplishments, Advertising, Public relations and more. Your job is to research all of these things pertaining to your business to create a good Marketing plan. I will only touch on some of the topic today,However, it is a lot that need to be covered.
A market plan is a comprehensive blueprint which outlines an organization’s overall marketing efforts. you need to address the details of your market analysis, sales, advertising and public relations. These are your major sections.these sections should all come together representing the goal you are trying to accomplish in your business. Your goal should always be realistic and measurable, rather your goal is to gain customers, promote a new product,or just simply increase sales. which ever goal you are trying to accomplish the statement need to be very clear on why you want to achieve this goal, how do you plan on achieving this goal and how is this goal going to help your company grow.
Identify your marketing by asking the famous questions you were taught in elementary school. Who, what, where, when and how. the book I am reading broke all this down for me. who are your customer and competitors. What are you selling, your quantity, prices and products. Where is your target market located or how can they be reached. When are your customers most likely to buy, the busiest months seasons etc. How will you reach these potential customers. Find your potential customers who are ready to buy, let your customers know you can fulfill their needs and find the customers who will pay. This is also where the research of demographics and psychographics come in at. When you have figured out the answers to these questions, next you need to remember to follow the four must. as it is explained in Anatomy of a business plan, your four must is: Sell selectively, Know your niche, Create your pitch, and Price for Profit.
Market research is an important part of your market plan as well. Market research will give you an idea about picking the right locations, Seeing what type of customers you have in the area or what are they needs. to conduct a market research, you can do this several ways. you can present a questionnaire on or offline, polls, surveys on or offline, and focus groups. How ever you conduct your research make shure the questions are clear enough to get the response you are looking for to improve your business. In order to learn more how to conduct a market research you can always find free or low-cost workshops or utilize self-help books.
This is just some steps about a market plan. There is much more to cover and to research, for instance, methods of sales and distribution (catalogs, websites ect.). Packaging, pricing policy, sales strategies (email, direct mail, viral ect.). Advertising, public relations, networking and more. this is why I say to have a good market plan it will take time, planning and research. even when you have done all you can do to create your market plan it is best to asses your results by monitoring the thing that you have set up, rather its is surveys campaigns ect. a good thing to do is when customers do come in or call you business always ask how did you hear about us. That sums it up for what I have learned out of this wonderful book and look forward to learning more and sharing more.
EXECUTIVE SUMMARY
My blog for this week out of the book called Anatomy of a Business Plan will be on executive summary. Though I learned plenty of things so far reading this book, yet I will concentrate on giving you an idea of how to prepare an executive summary with the information I have gain from reading this book. This is a wonderful book to read if you have no idea of how to create a business plan. I now see why the author named it with anatomy in her title.
Executive summary and all that is required to be in an executive summary. Rather you are seeking finical help or not this blog will help you get an idea of what to expect in your summary. I was shown examples of a complete executive summary in this book and I will share them with you at the end of this blog.
First let me explain to my readers what an executive summary is. An executive summary is a statement or an overview of your business plan. It let the reader of your plan know what you are trying to accomplish, where is your company heading, what is your needs, what make you different from any other businesses and why. It is your introduction of your business, that mean it will be one of the first items that will be read so you need to make a good impression. The executive summary will be completed after your business plan is finished. The reason for this is so that you will have all the necessary important information to include in your summary.
What will be included in your summary is who you are where your business is located or will be located, what kind of business is it, and the uniqueness of your business. Then what will follow is your market opportunity, mission statement, profile of all managers, financial projection, and information about your competitors along with their strength and weakness. If you are seeking a lender you will state the amount you are in need for, how long you need the loan what it will be used for, how this loan will benefit your business and the repayment plan or date when you will pay the lender back.
That was just a quick summary of an executive summary; however, seeking a lender versus not seeking a lender; your summary will be a little different. One difference is you will not have to state anything inquiring about a loan also your summary would only need to be one page long. If seeking a loan your summary will be longer but should not exceed 3pages.
Hopefully some of this information was helpful. If you want more details on this topic, my advice is to download, rent or buy the book “An Anatomy of a Business Plan”. It will be well worth your time. You can also ask any question that I may be able to answer concerning the book. Please look forward to other topics on this book each week. Below is an executive summary that is seeking an loan. I have copy and paste this out the book “Anatamoy of a Business Plan, By Linda Pinson”
AeroTech, Inc. Executive Summary
Formed in 1999, AeroTech, Inc. was established with the objective of custom designing and manufacturing specialized parts for the aerospace industry. AeroTech, Inc. is an S corporation operating from a 10,000 square-foot manufacturing and warehousing space in Aerospace Tech Park, a light industrial park, located at 372 E Main Street, Burke, New York. In the past two years, the Economic Development Corporation (EDC) of Burke has been successful in encouraging large aerospace and technology corporations to relocate to the Tech Park. AeroTech, Inc. has developed excellent working relationships with the relocated companies. The company currently serves 20% of the total market with gross revenues of $3,650,000.
Market Opportunity
Burke EDC projections through the year 2011 indicate a 30% increase in tenancy in the Tech Park by aerospace companies. Federal government statistics project a 25% increase in the United States in aerospace development through the year 2020. Information from engineering and aerospace trade associations indicates that automation is needed to allow the company to remain competitive. By building on past working relationships with current companies and by actively marketing to new residents of the Tech Park, AeroTech, Inc. will be able to capture an additional 15% of the market; the Corporation’s share will be 35% of the total market.
Capital Requirements
The company is seeking growth capital in the amount of $250,000 for the purpose of purchasing automated equipment and for training existing personnel in the use of that equipment. Modernization of equipment will result in a 35% increase in production and will decrease the unit costs by 25%.
Funding is needed in time for the equipment to be delivered and in place by May 23, 2008. There is a two-month period between order placement and delivery date. Training of employees on the new equipment is projected to cover a two week period following equipment placement.
Breakdown of Use of Funds
Provided below is a breakdown of the use of funds
Activity Amount
Automated Equipment $ 230,000
Personnel Training $ 20,000 Total
Loan Repayment $250,000 Repayment of the loan and interest can begin promptly within 30 days of receipt of funds. The loan can be secured by company-owned real estate that has a 2007 assessed valuation of $800,000.
Mission
The mission of AeroTech, Inc.is to serve the aerospace industry, providing premium quality parts, value added services, and quality workmanship. The company’s experience and proven service to the aircraft industry have demonstrated its capability to meet current and future aerospace requirements.
Management
AeroTech, Inc. has a very strong management team as well as a board of directors comprised of several industry and community leaders. Brief profiles of the management team are provided below (See resumes in Supporting Documents).
John Guzman, President and Chief Executive Officer
John Guzman was previously CEO for Omni Aerospace and was the force behind its well-documented growth between 1991 and 1998.
Roberta Thompson, VP Marketing Director
Roberta Thompson previously served as marketing head of the products division of ABC Corporation.
Thomas Choi, Corporation Secretary
Thomas Choi heads up Administration, capitalizing on his twelve years as an administrative executive with US America Air.
Althea Johnson, CFO
Althea Johnson was a senior partner with JFG Accounting and successfully achieved turnarounds for several multi-million dollar corporations
Donald Smith, Production
Donald Smith came to AeroTech, Inc. following 20 years as an R&D and production engineer with Boardman Electronics.
Competitors
Competitive threats come from Aerospace Manufacturing and Technology, Aero Designs, Inc., Aero Parts & More, and Space Technology, Inc. While Aerospace Manufacturing and Technology and Aero Designs, Inc. have longer operating histories, their technology is obsolete and subject to several inherent disadvantages. These disadvantages include longer installation time, more complex components and assembly, and excessive weight issues. Aero Parts & More and Space Technology, Inc. have technology that meets the unique demands of the marketplace. However, both companies have a short operating history and lack the credibility demanded by customers.
AeroTech, Inc.’s Competitive Advantages
AeroTech, Inc. boasts a world-class management team with extensive experience in the aerospace industry and a successful record of running multi-million dollar corporations. AeroTech, Inc. benefits from first-mover initiatives as the company introduces groundbreaking parts designed specifically for the latest technology in the aerospace industry. Additional competitive advantages include: patented technology, state-of-the-art equipment, and long-term contracts with key clients including the United States military.
Financial Projections
The company is expected to break even 24 months after completion of the employee training period. Forecasts for identified revenue growth resulting from a devoted and loyal customer-base and aggressive marketing initiatives indicate that AeroTech, Inc.will exceed $13 million by the end of year 3. Net profit for the three years is forecast to be in excess of $1.3 million.
Cover Sheet for a business plan
My blog this week is about what I have learned out of the book I am currently reading “Anatomy of a Business plan.” I have learned plenty of things so far, but I will touch on the cover letter of a business plan. If you are starting up a business or if you currently have a business you should think of creating a business plan.
A business plan is like a blue print of your business. It is very crucial to have one if you are seeking financial assistance, such as, a lender or an investor. It is also helpful if you plan on setting up business in a foreign market. A business plan is said to be more profitable if you have one. If you don’t have one and you are planning on starting a business, please consider it.
What consist of a business plan is a cover sheet, table of contents, executive summary, organizational plan, marketing plan, and financial documents. Todays blog will be about the cover sheet. I am sure there is other ways to create a cover sheet other than the way I will explain on here. This is an ideal cover sheet that is taught by a sucessful woman named Linda pinson, an award winning business planning expert who is also an executive officer.
The cover sheet is basically like an introduction to your business. So it should be neat accurate and attractive. It’s your first impression of an interview. The cover sheet will have your company’s Logo on it. So try and have your Logo and even your company’s name catchy to grasp the reader’s attention. On the front of this cover letter it should have your company’s name, address, phone number, web address, logo, the name, titles, addresses, phone numbers of the owners or corporate office, month and year of when you created this plan, name of the preparer, number of the copy and optional would be a confidentiality statement.
Now how to set up this cover sheet you would make sure your company’s name, address, phone number, and web address will be at the top one third of the blank document. Your company’s logo will go underneath this information or on top of your company’s information. The owners information will be in the center of your cover letter and the rest of the information I have mention will be at the bottom third of the page of your cover letter. Make sure your month and year is updated. If you hand in an outdated business plan such as five month old you may be requested to update your plan. So keep your plan up to date!
So you see a cover letter might be one of the easiest item to put together in your business plan. Even though it may be the easiest part of the plan, don’t mean it need to be forgotten. Like I mention at the beginning of my blog, your cover letter is your first impression. Keep it professional neat and attractive.
TIME MANAGEMENT/ EFFECTIVE USE OF YOUR TIME
Two weeks into the book, Anatomy of a Business plan, and so far the passage that capture my attention is when the author speaks on Effective use of your time. The author had mention that business planning takes discipline, time and privacy to create an effective business plan. A lot of people should know what this mean and it make very sense of why these three words was used, but for those who still don’t grasp the understanding of time management it is all about planning, setting a schedule and sticking to it. Though we may have other duties in life that we need to take care of daily, time management is an effective way to accomplish these daily goals with less stress involved. This apply to creating your business plan. Planning is everything, especially dealing with your future.
Discipline is showing a controlled behavior. Creating a plan or goal and sticking to it no matter what. Do what you need to do to achieve it. If you get distracted try not to get distracted for too long. Set your day time and area to work on your projects that need to be done. In this case I am speaking of a business plan. Discipline requires your commitment and determination. Be committed in what you do and what you believe in.
Time is all about making time for your projects. Set some time aside to get things done. Put your project in your daily duties and try to make it a habit to stick with at the same time every day. This will help you get in the routine of handling your project daily like a chore. Now don’t worry if you don’t stick to this time every day, life is not always on a schedule.
Privacy is having some quite time to yourself. No distractions or interruptions. This will help you focus on the project that needs to be done. Not to mention it helps you think when you are alone. Too much noise or distractions can cause irritation and lack of focus, so you should try and find a private place in your home or go to the library when it’s time to work on your project.
This is just my point of view and feelings on effective use of your time or time management. Everybody have their own opinion and I would love to hear your thoughts on it.
http://boss.blogs.nytimes.com/2012/11/07/the-joys-and-dangers-of-owning-a-microbusiness/?_r=0
The Joys (and Dangers) of Owning a Microbusiness
CREATING VALUE
Are you getting the most out of your business?
Today, there are about 27 million businesses in the United States. Of these, the vast majority are what we call microbusinesses, those that typically have fewer than five employees and less than $1 million in sales. This was where I started my business career and, after having gone through all three stages of business growth, I’m happy to be back there again today with my wealth management and consulting business.
I love being a microbusiness. I have few worries about capital investment, little need for bank loans and no concerns about taking care of a large group of employees. I am able to concentrate on serving clients and don’t spend a lot of time on administrative duties.
Of course, when I’m not able to work, my business suffers. If I were unable to work for more than six months, the business would have a hard time surviving. That’s the biggest down side, one I experienced while going through my cancer treatment four years ago.
The other big challenge with a microbusiness is lumpy sales — when your sales go up and down in a significant way. You move between extremes. One day you’re so busy serving customers you don’t know what to do, and a week later you’re trying to figure out where your next job will come from.
That’s what happens when a microbusiness owner tries to do everything. Among other things, the microbusiness owner is the marketing manager, the sales representative, the service provider and the person who runs the company. It’s the moving from doing work to landing work that causes the roller-coaster ride in terms of cash coming in the door.
Cash flow is king in most small businesses, but this is especially true for those with fewer than 25 employees. Research from Open at American Express shows that about 50 percent of small businesses experience cash flow strains, mostly because they aren’t creating enough in extra profit to allow them to put cash away for a rainy day.
If your business doesn’t have enough cash, you will be under stress. That is something I can attest to from first-hand experience. When you don’t have enough cash, you feel pressure to take any client who walks in the door. But this is usually a mistake. Trying to be all things to all people will cost you money.
Most owners understand this. But when you are under pressure to pay your bills, it’s hard to say no — even if the customer is outside of your target market. You need money, you take the business, and you often end up spending an inordinate amount of time serving the customer. And if you stay in this cycle, you put your business at risk. When you own a microbusiness, burning time is just like burning money.
Several years ago, I did some work with a graphic design firm, Gray Cat Studio. Michelle Bisceglia, the owner, had built a knowledge base working with specialty food manufacturers. She knew a great deal about the businesses and what made them successful.
When I first started working with her, she would take work from anyone. She often lost money when she went outside her knowledge area, but like many microbusiness owners, she was often short on cash.
We worked on developing her niche and I coached her in using a new word: No. Over time, two things happened. She was able to charge higher fees because of her expertise, and it took her much less time to complete projects. This allowed her to create a cash cushion, which made it even easier to say no to customers who didn’t fit her profile.
Ultimately, microbusiness owners have two choices. They can choose to remain a microbusiness, like Ms. Bisceglia, or they can do what I did in my previous business and move into the next level, the traditional small business. In both cases, understanding the drivers that create cash for living and saving is crucial. If you want to grow, you will not only need to finance your own living needs and retirement savings, but you also need to create cash for growth.
There is no good or bad about this decision. It’s truly about an owner’s preferences. Some people decide they want a bigger business, and some are happy just doing what they want without having to worry about managing other people.
If you choose to stay at the micro level, you need to understand that lumpy sales exist and you must have a strategy for dealing with them. You should have a plan in place in case you become disabled. You should have a strategy for saving for retirement, because you will not be able to sell your business.
What do you think? If you’re a microbusiness, what are your challenges? Have you decided to stay at this level?
Josh Patrick is a founder and principal at Stage 2 Planning Partners, where he works with private business owners on wealth management issues.
“The business that fails to plan, plans to fail”
What this quote means to me (“The business that fails to plan, plans to fail) is that I need to do my homework, meaning…. Research, networking, take some business class if you can have patience, work hard, never give up be preoared for barriers, listen have faith and stay prayful.
Everything that you want to succeed in life take some kind of planning. The lack of planning in your life will show through the achievements you have gain the goals you are trying to reach. Not saying you will not achieve your goals if you dont plan, but it will be alot harder, stresful and a big possibility of failure. Even a Homemake need to make a plan if she want a less stressful life raising her children and taking care of the daily duties in the home. I am not saying you have to make a plan, but I am saying planning things out makes a big difference in your life, rather its a plan for your health, family, carreer or schooling.
The reason for my Blog
Hello to all my viewers, the reason I am blogging is because for one honestly because it’s a requirement for my management class that I am currently taking. The second reason, now that I learned what a blog is all about, is to receive viewers input, advice, ideas and wisdom on the topics that I will be sharing with you. Those topics will be business related. One will be input that i will share with you about the book that I am reading (anatomy of a business plan). The other is on micro business… yes a broad subject. I don’t have anything specific i want to know about a micro business because i would like to know as much as possible. Look forward to what others have to say and share. have a bless day
shaneedamarley 