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The Importance of a Well-Structured Business Plan

In the world of entrepreneurship and business management, the old adage “failing to plan is planning to fail” couldn’t be more accurate. A well-structured business plan is the cornerstone of any successful venture. It serves as a roadmap, a compass, and a comprehensive blueprint for your business’s journey. In this article, we’ll explore the critical importance of a well-structured business plan and why it should be at the top of your entrepreneurial to-do list.

Setting Clear Objectives
One of the primary functions of a business plan is to set clear and measurable objectives. It forces you to define your business’s goals, both short-term and long-term. These objectives serve as a guiding light, helping you stay focused on what matters most. Without a plan, you risk drifting aimlessly and losing sight of your business’s purpose.

Securing Financing
Whether you’re seeking investments from venture capitalists, applying for a small business loan, or looking to attract angel investors, a well-structured business plan is often a prerequisite. Potential financiers want to see that you’ve done your homework, that you have a solid strategy in place, and that their investment is in capable hands. A well-crafted plan can be the difference between securing the funding you need and being turned away.

Strategic Decision-Making
Running a business involves countless decisions, both big and small. A business plan provides a framework for making informed choices. It outlines your market analysis, competitive landscape, and financial projections, allowing you to make strategic decisions based on data and analysis rather than gut feelings. This data-driven approach can significantly reduce the risks associated with business operations.

Business Growth and Expansion
A business plan isn’t just a one-time document; it’s a living document that evolves with your business. As your company grows and evolves, your plan should adapt accordingly. It becomes a tool for scaling your operations, entering new markets, or launching new products or services. Having a well-structured business plan in place ensures that you have a clear strategy for growth and expansion.

Communication and Alignment
Your business plan is not just for your eyes—it’s a powerful tool for communicating your vision to your team, partners, and stakeholders. It provides everyone with a shared understanding of the business’s mission, goals, and strategies. This alignment fosters a cohesive and motivated team, all working towards a common objective.

Risk Mitigation
Every business faces risks, from market volatility to unforeseen challenges. A well-structured business plan helps identify potential risks and develops contingency plans to mitigate them. By thinking through these scenarios in advance, you’re better prepared to handle adversity when it arises.

In the ever-changing landscape of entrepreneurship, an sba business plan is not a luxury; it’s a necessity. It empowers you to set clear objectives, secure financing, make informed decisions, facilitate growth, communicate effectively, and mitigate risks. Without a plan, you’re navigating the business world blindfolded, increasing the likelihood of failure.

Invest the time and effort into crafting a comprehensive business plan that reflects your vision, strategy, and goals. Keep it updated as your business evolves, and use it as a dynamic tool to guide your journey. Remember, the road to success is often a winding one, but with a well-structured business plan as your map, you’ll be well-prepared to overcome obstacles and reach your destination.

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Remote Work To Look Into

Remote Work – Start Your Business

Considering the time and era we are in, it is no surprise that remote work is starting to gain more and more notoriety within our society. Starting a business is already a challenge in and of itself, but with a home business, you can get started and launch your business from the comfort of your own home. A home business offers the flexibility to use your home as an office and build your company from the ground up without any need to rent a space for operations. Whether you’re a student, a stay-at-home parent, or simply prefer to work alone in a comfortable environment, setting up a home business offers many benefits. So, what are some remote jobs to look into today?

– Personal/Virtual Assistant

Are you an organizational guru? Do you have incredible time management skills, a knack for planning, and a talent for multitasking? Put your skills to good use as a virtual assistant. Maintaining calendars, booking travel, email correspondence and more, can all be done remotely – all you need is a computer. If you’ve already worked successfully as an assistant, your previous references will do wonders for getting your business off the ground. If you need to develop a clientele before starting your business, UpWork is again a useful option for getting your feet wet. 

– Freelance Writing

Writing is a great skill to have because it’s needed somewhere in every industry. If there’s an area you have expertise in, such as fashion or technology, maintaining a blog on that subject allows you to have a personal portfolio to show off your work and start earning paid projects. The good news is that you don’t have to start off entirely on your own, there are plenty of freelance writing websites where you can find paid work, such as UpWork, that you can use to build a client base before going off on your own.

– Consignment Shop

If you have an eye for fashion and know how to put together an eye-catching ensemble, then you might have what it takes to start your very own online consignment shop. You can find great, affordable items at your local thrift store, pieces that people might otherwise overlook, and use your skills to create one-of-a-kind outfits that go from drab to must-have. You can model the outfits yourself, or involve friends and family by asking them to model your looks and show off a variety of styles on different body types. 

Starting your own business comes with many challenges, but with these home business ideas and of course, your customized bargain business plan, you’ll have the tools you need to hit the ground running. What are you waiting for? Get started today!

 

Entrepreneur Funding

Stakeholders and Financial Statements

Stakeholders and Financial Statements

The main objective is to provide financial information about the reporting entity to users of the financial statements that is useful in making decisions about providing resources to the entity, as well as other financial decisions. In order to provide useful information to the stakeholders of a business the financial statements must fairly present the position and performance of that business (or show a ‘true and fair view’)

The 4 main users (stakeholders) of financial statements are commonly grouped as follows: 

  • The public may wish to assess the effect of the company on the economy, local environment and local community. Companies may contribute to their local economy and community through providing employment and patronising local suppliers. Some companies also run corporate responsibility programmes through which they support the environment, economy and community by, for example supporting recycling schemes.
  • Investors and potential investors are interested in their potential profits and the security of their investment. Future profits may be estimated from the target company’s past performance as shown in the income statement. The security of their investment will be revealed by the financial strength and solvency of the company as shown in the statement of financial position. The largest and most sophisticated groups of investors are the institutional investors, such as pension funds and unit trusts.
  • Lenders need to know if they will be repaid. This will depend on the solvency of the company, which should be revealed by the statement of financial position. Long­term loans may also be backed by ‘security’ given by the business over specific assets. The value of these assets will be indicated in the statement of financial position.

  • Employees and trade union representatives need to know if an employer can offer secure employment and possible pay rises. They will also have a keen interest in the salaries and benefits enjoyed by senior management. Information about divisional profitability will also be useful if a part of the business is threatened with closure.
  • Government agencies need to know how the economy is performing in order to plan financial and industrial policies. The tax authorities also use financial statements as a basis for assessing the amount of tax payable by a business.
  • Suppliers need to know if they will be paid. New suppliers may also require reassurance about the financial health of a business before agreeing to supply goods.
  • Customers need to know that a company can continue to supply them into the future. This is especially true if the customer is dependent on a company for specialised supplies.

Remember: management and competitors would also use the financial statements of a business to make economic decisions. Management, however, would predominantly use monthly management accounts as their main source of financial information. It is also unlikely that a business would prepare financial statements for the purpose of aiding competitors! 

 

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Financial Information and it’s Characteristics

What are the main characteristics of financial information?

One thing stakeholders take a look at is the financial statement you present. You must contain vital information and quality content. Some of what you may need to include are:

Completeness

The information presented to the shareholders should be complete. This means that all relevant transactions and events relating to the accounting period must show in the financial statements in accordance with relevant accounting principles. Roughly put, all transactions included in the statement occurred during the accounting period that the statement covers and that all transactions that occurred during the stated accounting period are included in the statement.

Prudence

The outcome of many events and circumstances presented in the financial statements may be uncertain. For example; a company can only be sure of receiving the cash from a credit sale when the customer physically transfers the cash to the seller. Prudence means exercising a degree of caution when preparing financial statements so that assets/revenues are not overstated and liabilities/expenses are not understated.

Reliability

Leaning more into information and what is considered to be reliable if it is: faithfully represented.

  • This means that financial information must be similar to economic substance (which is part of the U.S. tax law that is used by the IRS to determine if tax shelters are used to abuse tax liability by reducing it, it is not merely the legal form of a transaction. To quote: “Under the doctrine, for a transaction to be respected, the transaction must change the taxpayer’s economic position in a “meaningful way” apart from the Federal income tax effects, and the taxpayer must have had a “substantial purpose” for entering into the transaction, apart from the Federal income tax effects.”
  • An example of this would be where a business sells assets at the year end but they agree to buy them back again the day after the year ends by contract. Although, legally, a sale has taken place – the key is that the company has not really sold the goods at all; roughly said, they are window dressing to bump up  their year end revenues.

Comparability

Users must be able to compare financial information relating to the entity over time and against other business entities. To this end accounting treatments should be applied consistently from year to year and should be disclosed in the financial statements.

Materiality

Materiality is a vital source of importance to you and others who will be filling out financial statements. Through this information – it can potentially influence the economic decisions of the users when taken on the basis of the financial statements as a whole. This also provides relevance.

  • Relevance: information is looked at to be relevant if it has the ability to impact the economic commitments and decisions of the users and it is provided in time to influence those decisions.

 

Entrepreneur Funding

Franchise Funds

Owning a franchise is another type of entrepreneurship. A franchise is a license to use the trademark of an existing business. It is run by a franchisee under the brand name of the national or a multinational company (Franchisor). Starting a franchise can be lucrative if the brand already has a loyal customer base.

Practically, franchisees adopt the entire model of the franchisor, ranging from the branding and marketing to pricing. Once approved, the franchisee enjoys all the benefits of franchisor’s brand and the other resources such as logistics, accounting, and professional consultancy.

Make Sure You Check Your Funds

Being a franchisee, you must know about your financial standing. You will waste a lot of time in finding and searching franchise opportunities without knowing your budget limits.

It is best to prepare your net worth statement before deciding to become a part of a franchise business. Prepare a list of your assets and the liabilities. The difference between your assets and liabilities is your total net worth. Your franchisor will require this information from you. Mostly the franchisor set their minimum net worth requirements.

Always consider beyond the minimum buying requirement of the franchise, listed as registration fee and equipment cost. Do not ignore the costs that involve marketing and advertising activities. You need a significant amount of money to survive on break-even point and the initial loss period before your business actually starts hatching the profits.

 

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Using Your Business Plan To Your Benefit

Before we get into HOW to use your business plan, let’s see why you need one in the first place. 

As an entrepreneur it can be tempting to jump into a new idea immediately and move full steam ahead to begin a new business venture. However, you have to walk before you can run! Diving into a project can result with a huge to-do list, and not enough time and this is when the chaos happens. This is why it is important to plan the business and think through all scenarios before startup. Not only is a business plan a blueprint for the startup of your company, it will provide an outline for the first few years and also give you an idea of if the idea is actually viable before you invest your time and money in it. Creating a business plan can be the deciding factor in your viability, success, and in securing financing.

 

Viability of Your Business

One of the most important steps in the business plan is writing the marketing analysis and competitive analysis segments. These will help you discover and visualize what your competition will be and establish what sets your company apart and gives you a competitive advantage in the market. This, combined with the financial projections, can be a huge clue to the likelihood of your startup’s success. These segments will tell you if the idea is not profitable enough or if it would take too much time and money to sustain, so you can cut losses early on and move to the next idea. Much better to find out early than to invest years and significant amounts of money into something that won’t work!

 

Success of Your Business

The process of writing a business plan forces you to think through exactly what you want your business to be – what products or services will be your core offering, what you hope to expand to over the years, and what voice to the customer and marketing methods you will use, to name a few. By first establishing feasibility, and then running through potential situations that may arise during the launch and growth of a business you are setting yourself up for success. Be proactive, not reactive! It can be the difference in success and failure. 

Now – knowing all this, how can we use our plan to our benefit? 

– Attract Investors & Lenders

So many businesses give up entirely on the concept of investors. “It’s too hard” or even “my business isn’t good enough”. Both of these may have an element of reality to them, but overall, no. There are risks and benefits in many aspects of business, but if you neglect to have a business plan, you’re not even trying to get investors to notice.

How to use a business plan regarding investments is by creating an executive statement that addresses the need that you are solving. Don’t obsess on numbers, or being unique, or even being the first in your market. Chances are, you’re not. But, you may very well provide what people need and that is what investors specialize in.

– Be Ready for Pressure

It’s incredible to see how minor tweaks made in how something is done can have a monumental impact on the result. Use your business plan to identify where things can be achieved at a better cost or more efficiently. It’s nearly impossible to address all potential possibilities without laying it out in a business plan.

 

 

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Investors

What Are Investors?

Investors are people who put money towards a product or entity with the expectation of generating a larger benefit or financial return in the future. Additionally, investing is a long term practice. Those involved tend to take a smaller risk for a larger gain. Investors are a great option because many of them look to invest in small businesses. A positive gain, this aids your business to move forwards not only financially, but also economically. Not everyone who throws money your way is an ideal investor. Even though it may be tempting, it’s important to read the fine print before accepting any investment. The perfect startup investor offers more than just money. Meeting any type of investor is intimidating. Sometimes, even the slightest fumble in your pitch can cause them to doubt the future of your startup. Luckily, with the perfection prepared business plan, you’ll have an organized breakdown of your business model, structure, and execution. The best things to consider when pursuing an investor are:

Expertise– What is your investor’s background? If they weren’t investors would you consider hiring them? An investor who can offer skilled expertise applicable to your startup is more valuable than any blank check.

Network– Maybe your investor isn’t offering the oftiest amount of cash, but do they make up for it in who they know? Many times, who you know can make you an authority in your market quicker than anything else.

Resources– When possible, pursue industry veterans who have the resources you need at their fingertips. If they really believe in you, they’ll be glad to share.

 

There are a few different types of investors: passive investors & active investors.

Passive Investing: a safer method of investing. This is more of a buy-and-hold tactic which limits the amount of turnover by following the index. 
Active Investing: riskier method of investing. Involves a constant buying/selling strategy. 

Investors can either invest under their own personal account (retail investors), or those who invest in a start-up (angel investors), or those who invest in private companies. Individuals can also become investors themselves by building a portfolio and having sufficient funding to have the ability to invest in an individual, or a business entity. 

This is a rough draft of some of the documents needed. Typically, it varies from lender to lender.

 

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Why Social Media Is Important For Your Business

Social Media Is Important For Your Business

Besides being accessible, promoting your company on a social platform is cost-effective too. For a post on Instagram or Facebook, it costs less than $5. This is a very big advantage, especially for new business owners. When you link your website to a post that is promoting your group, your traffic increases tremendously. More traffic = more visitors. More visitors = more potential clients. The need to hire and invest in a big advertising agency is not needed for a start-up, which allows new business owners to invest their money in more important matters. Through this method, conversion rates are higher as well. Each post is a potential business deal with a client. 

When it comes down to advertising your new business, it is important to expand your knowledge of how consumers will view it.  Through strategic marketing and advertising, your company can reach target audiences in no time. When you have an answer for each of the questions, you can slowly start outlining your plan on how you will present your company. You hear the word “promotion” & “advertising” quite a bit in the business world. Why do they hold such significance? These are the outlets in which your organization will introduce itself to the world and most importantly, investors. You want the appeal for your company to be high, so that consumers, viewers, potential clients can be drawn to it.

The most typical yet essential resource you can have in this century. Sites such as Facebook & Instagram hold the highest views and business adverts than any other platform. Facebook alone is a host for 3 million businesses to advertise on. It is smart to view this as a community. Over a 4-week campaign, users on Facebook will see your ad over 10 times. Another reason as to why social media promotion is ideal is that it helps you stay relevant. Your company will constantly be publicized in rounds. It is a great reminder to existing customers that your services are still open and running. This gives you full control over who you want to see your ad, how many times, in which countries it will appear, etc. 

Social media advertising is what keeps your business active and afloat.

 

 

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What Investors Look For in Your Business Plan

Investors for your business

Investors for your business will consider quite a few things before they put their money where their mouth is. Oftentimes this includes your team positions, titles, and responsibilities. A track record proving your success, and an awareness of your competitors. But, what are other things that can attract investors for your business? The person you are meeting with for investments or loans wants to know how you plan to make the money back, and when you plan to see a return on their investment. Be sure to have an idea of your projections that are included in the business plan, because you will probably be expected to answer questions about them.

These are the three main items you need to discuss:

  1. How much are you asking for?
  2. What will it be used for?
  3. Will it be a one-time ask or if you will need another round of financing in the future?

If you know your business plan, you can be ready to answer just about anything that may be brought up. And having your business plan with you can be something to leave behind with them for review, or a handy item to point to when you want to show off your charts, graphs or photos of your products. An investor needs to see a viable, proven strategy for making a significant profit within an allotted time frame. They need to know that they will make a very secure, handsome profit in return for their investment. But also that there is a clearly defined, effective exit strategy in place for them to actually withdraw their profits.

 

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Business Networking & Its The Importance

Business Networking

Networking is the act of interacting and communicating with different people, investors, businesspeople while exchanging information, credentials, and contacts. One of the greatest ways your business can develop and advance is through networking. When you put yourself out there alongside your business, the chances of you gaining new support, clients, shareholders, even partners are high as your company starts to receive attention from different directions. You are making you and your business known to the public eye. By doing this, you are expanding the knowledge of your presence and what services your company offers to others. One of the key elements that can boost not only your business but your reputation. When you network, you put yourself out there and raise the chances of you meeting successful people who are in your sphere. 

When you start to enter the sphere of communication/networking – make it your goal to become known. By forming new relationships, you gain the advantage of people remembering you and the services you offer with your organization. In a lot of cases, new business owners focus more on their business plans rather than the actual business itself. They invest their time and thinking on how to create this extravagant organization, but when the time comes to put the plan to use, it is ineffective because the company either does not meet the standards of the plan. Take into consideration that though the plan is the foundation for the organization, there are other aspects that have to be built on it. 

So, what else is important that networking gives you? Simple – you gain perspective. Maybe you want to change the format that your business is currently running on to something different. It is much easier to envision the fail/success image of your company through someone who has the experience and is operating on the platform that you are interested in. You see head-on what it is like and align your vision to see if that format is fit for your personal business.

 

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