Your business plan needs to be a live document that is in constant development and is continually checked and updated, You must know if you are meeting your goals and if you do not continually check your business plan it can not work for you. Your business plan will allow you to make the needed changes to adjust to your small business growth or lack of growth.
The basic outline of a business plan is to detail the systems you will use and the task that are needed to accomplish your goals. By reviewing your business plan on a monthly basis at first you will be able to check your progress or lack of it. Once your business is up and running inn the direction you desire you may want to revise the time you review your plan. If your small business is progressing the way you planned and growth is steady checking your plan quarterly might be a good choice.
At first financial goals should be small. Although small they should be accomplished in the time frame you set. The initial small goals are as vital to your overall plan as the larger goals you have set for later dates. If your plan is working correctly in the early stages you will be able to determine if the complete business plan is achievable. Make sure that each goal is achieved as planned.
As in most aspects of life the best of plans can fail. You must ask yourself two questions. 1. Did you complete each goal in the time period you set. Were you able to achieve some of your goals but not all of them.
2. Were you able to use the systems you put in place and did they work as planned. Maybe some them performed as expected while others did not.
Look carefully at your answers and analyze them. You will have systems that worked correctly and performed as expected. Keep those and continue working with them. The will also be systems that did not meet the goals you had set and the plans you had made. Look at these systems and find why they did not work.
You need to know why they did not work, if the system was flawed, were there steps in the system you may have missed. In answering those questions you can adjust future plans to accommodate errors that may have been made or discard the system completed and replace it with a new one.
A good solid business plan will continually improve and adjust. By adjusting your business plan and making needed changes you will improve the effectiveness of you business plan and ensure future growth of your business.
A business plan can increase your confidence and help build any small business ideas you may have. A business plan is like a silent partner that helps keep your business on track.
I was the owner of a small industrial supply company that supplied components to reputed clients on a credit period of 30 to 60 days. I was doing quite well but always wished that I had more funds in hand since I had constant problems catering to my daily expenses in cash. I also realized that even though I wanted to expand my business, I was unable to do so due to lack of adequate funds.
I first approached my bank in order to procure a loan in the hope that it could solve my problems. Unfortunately, the bank required that I submit some collateral such as my property, against the loan. They also demanded the financial statements of the past 3 years of my business in order to approve the loan. I would have to pay monthly installments against that loan along with the interest amount for a fixed period of time. Since, my business was only a year old and I was operating in a rented office, I had difficulty meeting both the requirements of the bank. Thus, I decided to look for other options.
I approached a few angel investors and venture capitalists too. But although they were willing to lend me the money, they insisted on becoming partners in my business and also keeping a portion of my profit margin in exchange for the finance provided. This was unacceptable to me since, it could lead to interference in the way I ran my business and could also present other problems in case I wanted them to exit the partnership.
It was during a casual meeting with one of my friends that had been in a similar predicament that I found out a rather simple solution to this problem. It seems that there were business-factoring companies that would 'buy' my credit invoices and transfer the invoice amount to my bank account within a day or two minus their 'factoring fees'. These fees would depend on the credit period that I had given to my clients, the credibility of my clients in the factoring company's eyes and the total amount of business that I could provide to these companies. The fees could thus be around 1.5% to 5% of my invoice amount, which I felt was fair enough. There would not be any question of collateral and this financing would only grow with my business since the amount, which I received would depend on the invoices that I sold to these companies.
With my friend's help, I contacted a business factoring company that scrutinized my client list and agreed to finance me. The entire documentation took around 5 days and that was it. All I had to do was to send my invoice to the factoring company and they would wire the amount to my bank account by the next day. This helped boost my cash flow, which resulted in me being able to meet my business expenses immediately. I also used that money to buy my products in bulk quantity and against cash payments, which enabled my costs to drop drastically. My business started growing at a faster pace and the more invoices I 'sold' to my factoring company, the more money I received. It was a win-win situation for my business.
Thus, business factoring managed to save my cash flow woes and helped my small business to soon grow within a short time. I am glad that I paired up with the right business factoring company that realized my needs and provided me with instant finance.
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