Friday, 6 September 2013

Top 10 Business Plan Mistakes

Every business should have a business plan. Unfortunately, despite the fact that many of the underlying businesses are viable, the vast majority of plans are hardly worth the paper they're printed on. Most "bad" business plans share one or more of the following problems:

1. The plan is poorly written. Spelling, punctuation, grammar and style are all important when it comes to getting your business plan down on paper. Although investors don't expect to be investing in a company run by English majors, they are looking for clues about the underlying business and its leaders when they're perusing a plan. When they see one with spelling, punctuation and grammar errors, they immediately wonder what else is wrong with the business. But since there's no shortage of people looking for capital, they don't wonder for long--they just move on to the next plan.

Before you show your plan to a single investor or banker, go through every line of the plan with a fine-tooth comb. Run your spell check--which should catch spelling and punctuation errors, and have someone you know with strong "English teacher" skills review it for grammar problems.

Style is subtler, but it's equally important. Different entrepreneurs write in different styles. If your style is "confident," "crisp," "clean," "authoritative" or "formal," you'll rarely have problems. If, however, your style is "arrogant," "sloppy," "folksy," "turgid" or "smarmy," you may turn off potential investors, although it's a fact that different styles appeal to different investors. No matter what style you choose for your business plan, be sure it's consistent throughout the plan, and that it fits your intended audience and your business. For instance, I once met a conservative Midwest banker who funded an Indian-Japanese fusion restaurant partly because the plan was--like the restaurant concept--upbeat, trendy and unconventional.

2. The plan presentation is sloppy. Once your writing's perfect, the presentation has to match. Nothing peeves investors more than inconsistent margins, missing page numbers, charts without labels or with incorrect units, tables without headings, technical terminology without definitions or a missing table of contents. Have someone else proofread your plan before you show it to an investor, banker or venture capitalist. Remember that while you'll undoubtedly spend months working on your plan, most investors won't give it more than 10 minutes before they make an initial decision about it. So if they start paging through your plan and can't find the section on "Management," they may decide to move on to the next, more organized plan in the stack.

3. The plan is incomplete. Every business has customers, products and services, operations, marketing and sales, a management team, and competitors. At an absolute minimum, your plan must cover all these areas. A complete plan should also include a discussion of the industry, particularly industry trends, such as if the market is growing or shrinking. Finally, your plan should include detailed financial projections--monthly cash flow and income statements, as well as annual balance sheets--going out at least three years.

4. The plan is too vague. A business plan is not a novel, a poem or a cryptogram. If a reasonably intelligent person with a high school education can't understand your plan, then you need to rewrite it. If you're trying to keep the information vague because your business involves highly confidential material, processes or technologies, then show people your executive summary first (which should never contain any proprietary information). Then, if they're interested in learning more about the business, have them sign noncompete and nondisclosure agreements before showing them the entire plan. [Be forewarned, however: Many venture capitalists and investors will not sign these agreements since they want to minimize their legal fees and have no interest in competing with you in any case.]

5. The plan is too detailed. Do not get bogged down in technical details! This is especially common with technology-based startups. Keep the technical details to a minimum in the main plan--if you want to include them, do so elsewhere, say, in an appendix. One way to do this is to break your plan into three parts: a two- to three-page executive summary, a 10- to 20-page business plan and an appendix that includes as many pages as needed to make it clear that you know what you're doing. This way, anyone reading the plan can get the amount of detail he or she wants.

6. The plan makes unfounded or unrealistic assumptions. By their very nature, business plans are full of assumptions. The most important assumption, of course, is that your business will succeed! The best business plans highlight critical assumptions and provide some sort of rationalization for them. The worst business plans bury assumptions throughout the plan so no one can tell where the assumptions end and the facts begin. Market size, acceptable pricing, customer purchasing behavior, time to commercialization--these all involve assumptions. Wherever possible, make sure you check your assumptions against benchmarks from the same industry, a similar industry or some other acceptable standard. Tie your assumptions to facts.

A simple example of this would be the real estate section of your plan. Every company eventually needs some sort of real estate, whether it's office space, industrial space or retail space. You should research the locations and costs for real estate in your area, and make a careful estimate of how much space you'll actually need before presenting your plan to any investors or lenders.

7. The plan includes inadequate research. Just as it's important to tie your assumptions to facts, it's equally important to make sure your facts are, well, facts. Learn everything you can about your business and your industry--customer purchasing habits, motivations and fears; competitor positioning, size and market share; and overall market trends. You don't want to get bogged down by the facts, but you should have some numbers, charts and statistics to back up any assumptions or projections you make. Well-prepared investors will check your numbers against industry data or third party studies--if your numbers don't jibe with their numbers, your plan probably won't get funded.

8. You claim there's no risk involved in your new venture. Any sensible investor understands there's really no such thing as a "no risk" business. There are always risks. You must understand them before presenting your plan to investors or lenders. Since a business plan is more of a marketing tool than anything else, I'd recommend minimizing the discussion of risks in your plan. If you do mention any risks, be sure to emphasize how you'll minimize or mitigate them. And be well prepared for questions about risks in later discussions with investors.

9. You claim you have no competition. It's absolutely amazing how many potential business owners include this statement in their business plans: "We have no competition."

If that's what you think, you couldn't be further from the truth. Every successful business has competitors, both direct and indirect. You should plan for stiff competition from the beginning. If you can't find any direct competitors today, try to imagine how the marketplace might look once you're successful. Identify ways you can compete, and accentuate your competitive advantages in the business plan.

10. The business plan is really no plan at all. A good business plan presents an overview of the business--now, in the short term, and in the long term. However, it doesn't just describe what the business looks like at each of those stages; it also describes how you'll get from one stage to the next. In other words, the plan provides a "roadmap" for the business, a roadmap that should be as specific as possible. It should contain definite milestones--major targets that have real meaning for your business. For instance, reasonable milestones might be "signing the 100th client" or "producing 10,000 units of product." The business plan should also outline all the major steps you need to complete to reach each milestone.

Monday, 26 August 2013

5 Business Training Opportunities

Career training opportunities can take many forms and can often be used as continuing education credits that will help them keep specific certifications. Members of management often encourage employees to improve their skills by attending classes whenever they are available. It is understood that keeping up with new forms of technology is the best way to keep a company one step ahead of its competitors.

1) College Courses - IT professionals and individuals who work with software on a daily basis, might do well to take college courses that teach the newest trends, and as such many colleges and universities offer professional development IT training. Accounting professionals can also benefit from refresher courses every couple of years to stay on top of new tax laws and guidelines, making this a career path that requires lifelong accounting training. Individuals can also work towards a higher degree in the hopes of advancing their career.

2) Company Sponsored Training Programs - Large corporations who want to provide learning opportunities for their employees may hire instructors to come in and give lectures. Industry leaders can offer advice on new techniques and practices that can help increase the efficiency of the business. By holding company sponsored training programs, management can make sure every employee receives the same training, without having to rely on them to complete it outside of work.

3) Specialized Training Programs - Suppliers and equipment manufacturers may provide training to individuals who will be operating or using their product in the workplace. One example is an accountant who will be using a new version of software for accounts payable/receivable. This type of accounting training is beneficial because the individuals teaching the course are those who developed the software.

4) Webinars - Online seminars or "webinars" can keep members of management up to speed on the latest trends in office management and business procedures. They can be completed in their office or at home simply by logging into the training website. While most webinars cannot be used for continuing education credit, they can provide sound advice for individuals who are dedicated enough to sit through them and take notes.

5) Online Classes and Conferences - Online classes and conferences are also beneficial forms of business training. Many people do not have time in their already busy schedules to sit in a classroom for several hours a week at a specific time. Online classes allow them to do their work at their own convenience and gain college credit at the same time. College courses follow the same format as conventional college classes except students are able to work from home. Most online classes will transfer to regular classroom credits if the student chooses to return to a more traditional college setting.

These excellent opportunities are a key part of constant self-improvement which is one of the cornerstones of success.

Business Success - The Little Things Mean A Lot

You may have heard it said before, many times - the adage that good enough is good enough - and it's true, as long as you don't put out junk in your business. So, the question becomes how do you make sure you're not putting out junk. You pay attention to the little things in your business because the little things mean a lot.

For example, when someone clicks on your website what do they see? Do they see a date that's six months old on the product or service you're offering? Now, you may think that's a little thing, but it's a little thing that means a lot, because people don't want information that's outdated. Nobody wants to think they're getting something old. The perception that they're getting old information may not necessarily be accurate, but that's how our minds tend to think.

You also have to understand that different things are important to different people. While one person will pass your website by and not click on your offer, another person may not even notice the old date. But, the same person who overlooked the date will notice that you have two misspelled words on your website, which may be a big deal to them. They may ask themselves, "Do I really want to do business with this person? If they can't spell correctly on their own website what kind of service am I going to get from them?"

As a business owner you're going to run into these things over and over, and you have to be aware of all of the little things that could adversely affect your business. Paying attention to the details is part of business, and when you're looking at your sales and marketing you need to be asking yourself if you're moving forward, and are you making money? All of these little things can have an effect on your business - the big part.

 You have to put checks and balances to work in your business. This process will allow you to take care of the little things, and it will make a huge difference in your bottom line. You should have a plan in place to look for the little things that may be slipping through the cracks in your business so those little things don't become big things... costing you hundreds, thousands, even hundreds of thousands of dollars every year.

Pay attention to the little details. Take a look at the little things in your business that are keeping you from growing, moving forward and making more money. And, put a system of checks and balances in place so that you can become even more profitable in your business.

Understanding the Importance of International Business

International business is all business transactions-private and governmental-that involve two or more countries. Why should one be interested in studying international business? The simplest answer is that international business comprises a large and growing portion of the world's total business. Today, almost all companies, large or small, are affected by global events and competition because most sell output to and/or secure suppliers from foreign countries and/or compete against products and services that come from abroad.

More companies that engage in some form of international business are involved in exporting and importing than in any other type of business transaction. Many of the international business experts argue that exporting is a logical process with a natural structure, which can be viewed primarily as a method of understanding the target country's environment, using the appropriate marketing mix, developing a marketing plan based upon the use of the mix, implementing a plan through a strategy and finally, using a control method to ensure the strategy is adhered to. This exporting process is reviewed and evaluated regularly and modifications are made to the use of the mix, to take account of market changes impacting upon competitiveness. This view seems to suggest that much of the international business theory related to enterprises, which are internationally based and have global ambitions, does often change depending on the special requirements of each country.

 Another core issue is the company's growth and the importance of networking and interaction. This view looks at the way in which companies and organisations interact and consequently network with each other to gain commercial advantage in world markets. The network can be using similar subcontractors or components, sharing research and development costs or operating within the same governmental framework. Clearly, when businesses formulate a trading block with no internal barriers they are actually creating their own networks. Collaborations in aerospace, vehicle manufactures and engineering have all sponsored the development of a country's or a group of countries' outlook based on their own internal market network. This network and interaction approach to internationalisation shows the substance of being able to influence decisions when knowing how the global network players work or interact.

For example, a crucial market network is that of the Middle East. Middle East countries are rich, diverse markets, with a vibrant and varied cultural heritage. This means that although there has been a harmonisation process during the past few years, differences still exist. Rather than business being simpler as a result, it should be recognised that because of regulations and the need those countries have to restructure as they enter the global market, performing any kind of business can be highly complex. It should be remembered though that the Middle-Eastern countries have a low-income average and like to have their cultural differences recognised. Those firms that will or have recognised these facts have a good chance of developing a successful marketing strategy to meet their needs. Fortunately some firms have realised these important differences and reacted adequately when strategic decisions had to be made regarding their penetration to this kind of markets.

SEO Articles Help Your Business Grow

If you have a blog or website you know just how important content is for your site. Without enough quality content your site just won't go anywhere. Ask yourself what it is that your readers are looking for when they visit your site, give this lots of thought, it's important! And you don't need just quality visitor content, you need that content to be search engine friendly, which we call SEO or search engine optimization. Here's how SEO articles can help your business.

Drive Traffic

The main point of having SEO articles is that they help to drive traffic based upon your keywords that you select for your website. When someone visits a search engine they type those keywords into the search engine and come across your site in the rankings. You need to use the right keywords to get that traffic to your website. You can do this on your own but often it's better to go with a search engine optimization service to get the right articles for your business. The right service will know how to turn your keywords into traffic for your website.

Better Rank

With highly optimized articles your website or blog will naturally rise up in the search engines because the engine will view the content as being authoritative and genuine. You don't want poor content on your site as this will lower your rank and in some cases even get your website de-indexed from the search engines. With great articles you'll enjoy a better rank over time. If you keep adding new and fresh content then this will help your rank even more, and your audience will consistently grow.

Be Seen as an Expert

If you are always adding fresh SEO optimized articles then your site will be recognized by the search engines as an authority on the subject. The right article service can help you turn those keywords you have into the right articles for your business so you are seen as that expert in whatever field you are in. You most likely are already an expert in your field, but sometimes it's difficult to put your knowledge in words, not to mention very time consuming. You want to hire high-quality writers to complete these articles for you but they are hard to come by. You want a team of experts to provide you with the best articles possible, so do your due diligence wisely when researching article writing services.

How to Make Your Business Plan Efficient and Effective

If you are an entrepreneur thinking about business planning for your startup or to develop your existing business, consider an effective way to write your business plan. With a plethora of software accessible, it is more often than not that business owners lose their core objective while they start business planning. Business planning is a continuous process not an event where you write and forget about it. Planning an effective business plan needs plenty of work and time. Do not rush yourself or your consultants while planning.

The key to having an effective business plan is dynamic adaptability. Recognize these key concepts before you start making a plan.

1. Make your strategy the soul of your plan- Strategy is the key. It is important to focus on your target market using specific products or services. Your strategy should be based on your niche or your unique characteristics that links you to your customers. It should define how you want to set your business apart from the rest. Strategy should be a concept, which can define you, your product, your market and your specific branding focus. While you can change most of the business planning aspect quickly; your strategy is the slowest and the hardest to change. Before you finalize your plan, make sure to develop a backup plan in response to changing conditions of your available resources, time and quality.

2. Do a little more research- Before you build your plan, research thoroughly about your target market, key customers and branding. While you don't need to elaborately write your research in the plan, try to summarize your key concepts with bullet points or graphs or even pictures. Understanding your competition and the volatility of the market in depth prepares you to expect the changes gradually than severe swings. Research brings more focus to your strategy, strengthens your products or services and defines your niche aptly.

3. Plan milestones - Plan your entire operation with milestones.Track your progress with milestones, achievements, lists and tables. The most important part of milestone planning is to run a business on strict budget and resources. Resources can be time, material or services and human effort. Milestones should be practical, measurable and concrete. Keeping your expectations reasonable will benefit in achieving short term goals. Again do not lose heart if you are behind on your milestones, just do an overview of your plan periodically and modify changes accordingly.

4. Make your business plan lean - You might be surprised about the term lean in business planning. However understanding the lean concept of planning is a must if you want to make it effective and efficient. Lean doesn't mean thin or lack of details. Lean means powerful, effective and efficient. Learn to write your business plan according to your vision rather than adapting to a template. If you go to a consultant ask them for more customization rather than trying to fit into one of their packages. Lean concept of business planning helps you to write essential elements that are required for your operation; it helps to promote your brand as unique in the market.

5. A dynamic plan for volatile market- In business, continuous planning matters. Your plan should be dynamic based on your need and extremely customized for your product. Never stop planning if you want be ahead of the curve. Your plan should accommodate volatility of the market to keep you running. Your plan should have enough wiggle room to experiment with new products or services.

6. Writing for specific audience - Keep in mind your audience while writing your business plan. If you are writing to get capital from angel investors, add details of your plans, expansion and practical use of your product or services. If you are intentions are on borrowing money from the bank, their expectations are different. You have to concentrate on providing more financial information like cash flow; balance sheet and financial models to procure the loan. If your are presenting for your future clientele, make sure to add key performance indicators, market analysis and value of your product or service. Adding information about your education, your work background and your association with charity work might fetch you the capital instantaneously.

Creating A One Page Business Plan

The one page business plan is the key to getting your business started and running quickly.

I'll get to where the 93.5 inches comes from.

The One Page Business Plan Advantage

Most people start a business without a plan. The ones that do a business plan will sometimes spend months on the plan and never get to starting their business.

I am a huge fan of planning. If you don't plan, you will never get your business moving forward. That said, you really need to start doing business to make a plan worth doing.

A one page business plan can help you define what you are going to do, who you will do it for and how much you will charge, but it doesn't get bogged down in five-year financials, etc.

The One Page Plan: When to Use It

If you are going to try to get financing for your business from banks, investment bankers or angel investors, you will need a full blown business plan. At that point, I would recommend that you get a professional plan writer at that point.

If you are simply trying to start a business, you need to make some decisions. Who will you sell to? How much will you sell for? What will be your measure for success? And so on.

The One Page Business Plan: The Questions

This is a list of questions that you need to answer on your one page business plan. Answer them with one or two sentences, in the order I have them here.
  • What product or service will you offer?
  • Describe your average customer?
  • Describe your ideal customer?
  • What will you charge for your product or service?
  • What will it cost to produce the product or service?
  • What will your profit be?
  • What volume (how many sales) will you need to break even (profit - expenses = 0)?
  • How much do you need from the business in order to survive (your minimum income)?
  • What will be your measure of success (your salary, number of customers, etc.)?
  • Is your goal to build the business and work it for years or to build it and sell it?
  • What is your company's mission statement (based on the information above)?
No answer should be longer than 25 words. In other words, imagine you need to put this information up on Twitter.

The One Page Business Plan: Implementation

The key to your one page plan is the same as everything else I talk about here: Get going. Start now.

Now you know who you want to sell to, how much you want to sell things for and how much you need to do to break even and achieve success.

That's the map, now take the journey.

Contents Of A Business Plan - Key Information Required By Banks

Many small business owners and entrepreneurs produce business plans quickly and without much thought or analysis. While having one is critical when seeking loans from a bank, the actual contents are even more important. This is often over-looked as most business owners are not familiar with what banks are really looking for.

The contents of a business plan are critically important to the banks' lending decision process. It's not enough just to have all the headings covered off in the table of contents.

So what are banks really looking for? In this article, we will discuss the important of market and competition analysis in the contents of a business plan. Both of which are critical to a banks' decision-making process.

Demonstrated understanding of the key target market

The contents of a business plan include a detailed analysis of the industry and market segment within which the business operates. Beyond merely providing the estimated size of the market, and market share, banks look for analysis on the relevant market.

The following list of questions will be asked in one form or another by a potential lender to gain an understanding of the market segment the business operates in:
  • What is the size of the market - what geographic area does it cover and what is the estimated turnover of the whole market in the relevant area?
  • Where is it in its growth cycle, ie. Startup, mature, declining?
  • What is the business' estimated share of the market?
  • How much will it cost for the business or competitors to enter that industry, ie. What are the barriers to entry?
  • How competitive is it?
  • Is it regulated?
  • Is their demand?
  • Who are the business' direct and indirect competitors?
A potential lender will also focus on a detailed assessment of the business' ability to:
  1. Attract new customers
  2. Attract and retain good employees
  3. Fully utilize operating capacity
  4. Reach its target customers
  5. Retain existing customers
These attributes are the key success factors for that business to operate successfully in their target market and are usually included in the Industry and Market Analysis section.

Understanding and analyzing the competition

Banks will keenly examine and question the contents of a business plan covering competition analysis. The competition analysis section needs to show that the business owner has an understanding of their business strategy and model, and how they might respond to any competitive behavior in the market place.

The content needs to identify the strengths and weaknesses of top competitors and identify the needs in the customer base that are not being fully met by the competition.

Getting an understanding of how competitors are performing financially will also help support estimates made about the returns a business might make in the market it operates. This feeds into the financial section as one of they key factors that will form the basis of realistic sales projections.

This analysis will also identify the opportunities and threats to the business. Opportunities that can be capitalized on and incorporated into a well articulated business strategy, and threats that need to be mitigated or managed.

What perspective do banks take when assessing the merits of a business plan?

Banks make a fixed return on loans made to small businesses, unlikely equity investors who take the first loss risk, and all the upside profits as recompense for that level of risk. This is why banks will always focus on the downside risks to a business in their assessments of the contents of a business plan.

Business owners and entrepreneurs need to highlight and address the existing and potential risks to their business in the contents of a business plan being presented in support of a bank loan application. Addressing and mitigating risks in this document will reassure banks that management is fully aware of the risks involved and have provided reasons why they are acceptable or show how they will be minimized.

By ensuring that the contents of a business plan cover off risk mitigation, the business owner will gain some credibility with the bank and thereby increase their chances of a favourable outcome.

Success Starts With An MLM Business Plan

You, like me - joined a network marketing company to create a profit.

Wish to put the chances in your favour? Spend a little time at the start of your career and map out a MLM business plan. Decide precisely what you need to accomplish in your business and the time frame in which you wish to get it done. Then address the difficulties of advertising, marketing, training, time and budget to make a step by step action plan.

In this short article we are going to discuss a few vital components of a MLM business plan to help you get started.

What's an MLM Business Plan

According to Wikipedia, a business plan is a written outline of your business goals, the reasons why ( according to market research ) these goals are said to be attainable, and the plan for reaching those goals. It could also contain background information regarding the organization or team making an attempt to reach those goals and the experience and responsibilities of everybody involved.

The best MLM business plan will begin with the end under consideration. What are the goals that you wish to do and when? As an example, the main goal may be to supply a $250,000 every year yearly before tax revenue within a 5 year period.

Another idea is to write out this first goal in terms of production: To sell XYZ number of products to new consumers each month and maintain a once a month continuity volume of one millions bucks to consumers that reorder.

Components of a MLM Business Program

The Ultimate MLM Business Program Executive Summary - The executive summary is an overview of one's entire program.

It clarifies the complete view from the program, such as an organization history including other products or services sold. Here is exactly where you would state your main objectives and reinforce why you believe the program is going to be a success.

Demographic / Market Investigation - Often by figuring out who demands what it is possible to design a product / service / supply to offer you the people exactly what they want.

You must take time to determine the quantity of leads accessible, widespread ages and generations your offer will appeal to as well as competitors (who else is trying to sell to these people?)

Organization & Management - Who's going to do what in your new network marketing business. What's their background and why are you bringing them into the business team builders, support staff or marketing specialists? What are they responsible for? These could appear like pointless inquiries to answer in a straightforward one- or two-person organization but it is important everybody who is involved knows exactly what is anticipated of them. This particular part of your MLM business plan also provides a great opportunity to take a closer look at quite how much really is concerned in building a genuine business.

Marketing & Sales - Without marketing a business is dead in the water. You want "fresh blood" or new buyers constantly. This could be the exactly where things get serious and you figure out who will be responsible for attracting new recruits and providing leads that will lead to new sponsors.

Do not forget or skip making a strong MLM business plan, it'll keep you focused and keep the business moving ahead. Plan anything you do as well as do everything you organize.