Category Archives: Business Planning

Business Planning, Owning a Business, Self-Employment, Starting a Business

Welcome to the RiskBuster Business Plan Oasis

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Welcome to the RiskBuster Business Plan Oasis, the online Business Planner’s RoadMap. We’ve been busy at the Oasis creating videos to help you jumpstart your business planning. Over the next few months we’ll be adding them to our YouTube Channel.

Visit us at YouTube and if you like what you see give our subscription button a click!

http://www.youtube.com/BusinessPlanOasis

 

 

 

Business Planning, Self-Employment, Starting a Business

Don’t Waste Another Dollar on Business Planning

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If you’re starting or growing a small business and throwing a lot of money into business planning, you might want to read this before spending another dollar.

Talk to almost anyone in the business development or lending arena, and they will tell you flat out that you need a business plan.

True enough. You need a plan.

What’s less well touted is that almost all of the benefits of business planning accrue from researching and writing the plan yourself.

So, let’s cut to the chase. Individuals setting out to start small or micro-businesses are far better off to take up the mouse and keyboard themselves than to outsource the development of a business plan. Anyone can write you a story, but nobody can read your mind or predict whether or not you’ll succeed in business.

And guess what – you stand to lose everything if the plan doesn’t work out.

Of course, you also stand to gain everything if your business gains traction and succeeds.

So, here’s the rub. If a consultant could create a business plan that is guaranteed to succeed, why would he do it for you for pennies? Why wouldn’t he simply start the business himself? Here’s why – because 99.9% of the work is not in the planning; it is in the implementation of the business plan. And only you can assess whether or not you are able and willing to take on the work and make the business succeed.

Anyone who knows a few words can write a story. Anyone with those skills, a hint of imagination, and a bit of business knowhow can write a fairly convincing business story. But is that person in business? And specifically, unless that person is buried in your business up to the neck, the business plan isn’t going to be worth the pdf it’s written on. And if that person is in the business already, he isn’t going to help you in to the market place just to compete with him.

So, where do great business plans come from? They arise from the mind of the entrepreneur putting assets on the line, tempered with a few hours of research to validate any assumptions. That’s it. The only business plans that are worth a pinch of muskrat muck are those that are brought about through the blood, sweat and tears of the person who’ll be paying the taxes once the business is rolling.

So, suck it up and research and write your own business plan. If you have a roadmap to follow, it’s not such a bad thing – fact is, you might even enjoy the planning process once you get past the initial fear. After all, in planning a business, you are mapping out the next leg of your personal journey. You are laying the groundwork for an optimistic future, possibly improving your financial status and getting into a lifestyle you want.

What could possibly be more enticing than that?

Business Planning, Financials, Owning a Business, Starting a Business

Forecasting Isn’t the Same as Accounting

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There’s no doubt that forecasting or attempting to predict the future in any way, is considered by many to be a mild form of insanity.

Forecasting is one area of business planning that entrepreneurs tend to resist. There are many reasons for this.

  • Beyond spending, many people simply don’t like to deal with money matters.
  • Unless you’ve previously owned a business, the entire business financial arena tends to be a vast, spooky mystery.
  • Those who have weathered a financial black eye in their personal lives are inclined to be apprehensive about tackling the management of business finances.

Many people assume that forecasting is the same as accounting, and that it should be left to highly skilled professionals, such as bankers, accountants and MBA’s. And yet, the process of forecasting is sure to be a healthy learning experience for owners and anyone thinking about starting a business.

To dispel myths and misguided fears about forecasting, it is helpful to clarify what it is… and what it isn’t. One way to do this is to identify the ways that forecasting differs from accounting.

  1. Forecasting is an educated guess at future scenarios, while accounting is a detailed compilation of past transactions.
  2. Forecasting takes place prior to a period of business, while accounting happens after commerce is done.
  3. Forecasting provides an approximate picture of the future, while accounting shows an accurate record of business past.
  4. Forecasting is built upon safe assumptions and conservative estimates, while accounting is built upon precise records and receipts.
  5. Forecasting is usually best done by the small business owner, while accounting should almost always be entrusted to an accountant.

The truth is, most entrepreneurs have no crystal ball skills whatsoever, and most will never be accountants. Any yet, small business owners need to have a certain level of confidence in the future of their enterprises. A rationally constructed forecast can give you the confidence needed to move forward, while arming you with the information necessary to weather upcoming threats.

As surely as the business owner must pay taxes, he or she should take on the responsibility of forecasting. You can hire someone to foretell your future and you can certainly turn your business records over to an accountant for compilation, but at the end of each year it is the business owner who pays for any mistakes made and who reaps the rewards when things go right.

While attempting to predict the future might seem a bit crazy, the real insanity is trying to run a business without the benefits of forecasting. 

Business Planning, Entrepreneurship, Market Research

Eight Vital Steps to Proving a Business Case

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After a number of years spent assisting start-ups to write business plans, I believe that the point of all early stage market research is to prove or disprove your business case; that’s what the feasibility does, and it’s best done before you go to the trouble of writing a business plan. In doing a feasibility, you will gather enough information to decide whether to proceed or not, while also collecting most of the data you’ll need to write a business plan.

Here are the main elements of proving your business case:

  1. Validate Customers and Demand. Prove that your anticipated customers truly exist, that they want or need your products and services, and that they will pay for them. This can be done through market surveys, interviews, or focus groups. It can also be determined by studying businesses already in the market.
  2. Confirm The Size Of Your Market. Prove there are enough customers to support a thriving business. For consumer businesses, total market numbers can be found through secondary sources, such as census information, surveys and reports—business-to-business research can be accessed from business databases.
  3. Determine If You Qualify. Prove that you have the skills and knowledge to own and operate the business. This is a matter of matching your skill set to that required by the business or industry. In some cases, you may have to upgrade or get certified before starting the business.
  4. Source Your Suppliers. Identify suppliers and communicate with them to verify availability and costs, including shipping and any duties or tariffs that might apply if you’re moving goods across borders.
  5. Validate Pricing. Prove your pricing will work. This will entail getting clear on the cost of producing and getting your products or services into the hands of paying customers, and researching the competitor’s prices.
  6. Build a Financial Forecast. Prove your financial case—that the business will be profitable—monthly for the first year, less detailed for year two and three. At a minimum, you’ll want to create a sales forecast, a cash flow forecast and a 3-year income and expense projection.
  7. Determine Sustainability. Prove your business will survive and thrive. This includes confirmation of each of the six points above, and taking a close look at your personal situation—ensuring that you can manage the business ongoing in terms of your family, time, money, and energy.
  8. Assess Risks. Prove that you can mitigate risks and meet all of the applicable regulatory requirements. This can be done by talking to those already in business, reading trade or industry publications, and getting involved in relevant associations.

Once you’ve gathered the information above, you will be well on the way to proving or disproving your business case. There may still be other hoops to jump through, such as nailing down financing, building partnerships, clarifying investor strategies, and comparing the investment with other opportunities. As to whether or not to start the business, that is a decision that can only be made by the entrepreneur taking the risk. The eight steps above will prepare you to make the right decision for you.