Getting Started on Your Business Plan
22-Jan-2008 |
| Your best bet is to follow a self-help business plan book that shows you how to conduct the financial forecasts described above. Two good bets are How to Write a Business Plan, by Mike McKeever (Nolo)
Motorola Cuts $3.9 Billion Deal to Buy Symbol Tech:
By Keith ReganE-Commerce Times 09/19/06 10:19 AM PT
Motorola has agreed to acquire Symbol Technologies in a deal worth around US$3.9 billion… |
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How Will You Use Your Business Plan?
22-Jan-2008 |
| Depending on whether you're trying to attract investors or are creating a blueprint for your own use, a business plan can take somewhat different forms.
Attracting Investors
If you will use your business plan to borrow money or interest investors, you should carefully design your plan so that it sells your vision to skeptical people. Normally this means your business plan should include:
a pe… |
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Pay your bills early and your taxes on time.
22-Jan-2008 |
| In the real world, where a reputation for keeping one's word is a hugely important asset, a good strategy is either to pay your bills up front or pay them early. You gain trust, build a positive credit profile, and have a built-in safety net if things go badly. These benefits outweigh any interest you might earn by holding onto your money until the last possible minute.
Most importantly, pay you… |
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Pay attention to the legal status of your workers.
22-Jan-2008 |
| When you hire workers as independent contractors, make sure they shouldn't really be taxed as employees. The IRS can impose substantial penalties against you for not withholding taxes and paying taxes for a worker who is really an employee. The IRS and other agencies are likely to think that a worker is an employee rather than an independent contractor under any of these conditions:
The worker… |
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Hire and keep good people.
22-Jan-2008 |
| Your goal should be to hire and retain truly excellent employees -- not just reasonably competent ones. A highly competent and truly enthusiastic employee is at least two and sometimes even three times as valuable as a person of average skills.
To create a stable and happy workforce, it's essential not only that your employees (and independent contractors) believe they are being fairly treated, … |
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Put all agreements in writing.
22-Jan-2008 |
| The laws of your state require you to put some contracts and agreements in writing:
Contracts that will last longer than a year.
Contracts that involve the sale of goods worth $500 or more.
Contracts that transfer the ownership of copyrights or real estate.
Even if not legally required, it's wise to put almost everything in writing, because oral agreements can be difficult or impossibl… |
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Get and keep a competitive edge.
22-Jan-2008 |
| Building a competitive edge into the fabric of your business is crucially important to long-term success. Some ways to get this edge are by knowing more than your competitors, making a product that is hard or impossible to imitate, being able to produce or distribute your product more efficiently, having a better location, or offering superior customer service.
One way to hold on to your competi… |
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Make a business plan, no matter how short.
22-Jan-2008 |
| Understanding your profit numbers and creating a break-even analysis is the first step in making a business plan. For most small companies, the key portions of a business plan are the break-even analysis, a profit-and-loss forecast, and a cash flow projection. (Projecting your cash flow is key and will make or break your company: Even if your business is getting plenty of work or selling its produ… |
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Understand how -- and if -- you will make a profit.
22-Jan-2008 |
| You should be able to state in just a few sentences how your business plans to make a substantial profit. For starters, you need to know your costs: how much you'll spend purchasing inventory, paying the rent, compensating any employees, and covering what is likely to be a surprisingly long list of other costs. Then you can figure out exactly how much you need to sell each month, for how many doll… |
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Protect your personal assets.
22-Jan-2008 |
| When you go into business for yourself, you are usually personally liable for all judgments and debts that the business incurs. This includes business loans, taxes, money owed to suppliers and landlords, and any judgments against the business as a result of a lawsuit. If you don't protect yourself, a creditor can go after your personal assets, such as your car and your house, to pay for these debt… |
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Start on a shoestring.
22-Jan-2008 |
| Think small. Don't rent premises if you can work somewhere else, and don't hire employees until you can keep them busy. (You can hire independent contractors or temps in the meantime.)
People who start their small business on the cheap, often in a garage, den, or some other scavenged space, and create their first goods or services with more sweat than cash, have the luxury of making their inevit… |
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Save up as much money as possible before starting.
22-Jan-2008 |
| All too often, people go into business without any savings, exclusively using loan money from friends, banks, or the SBA. They except to be able to start paying the loans back right away with their profits. What these business owners don't realize is that it can take months or years to make a profit. And once a lender discovers a business isn't as profitable as expected, the lender is likely to ca… |
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Al Meedan