Saturday, November 15, 2008

Business Plan in a Month, Part 4

Summary to this Point

Part 1 of this series is here.
Part 2 is here.
Part 3 is here.

If you've been following along, you have a small binder, which contains
- A Mission Statement
- Three specific, measurable goals for Q1 2009
- Three specific, measurable goals for year 2009
- Financials for 2008
- Very rough first take on projected financials for 2009

Now, Let's Revisit 2009 and Make Adjustments

First, review your goals for 2009, and Q1 in particular.

Do you have plans that will require additional expenditures? If so, figure out what those expenses are and pencil them into the spreadsheet.

Sometimes, we have a tendency to increase sales on a nice, straight line. If that's realistic, then you should write it down. But don't forget to put some money in there for marketing and sales expenses.

You're going to hire a new employee to handle the new work? You'll need salary at a minimum. You might also need furniture, phone, computer equipment, etc.

If you need new equipment or other major purchases, pencil those in.

You get the idea.

We all want to do things. What specific things have you got planned for next year? When will you do them? When will the expenses hit?

Make notes about everything. You don't even have to use complete sentences. You can add comments inside Excel spreadsheet cells, or add a notes column to the right of the financials.

In general, you're going to use the financials and goal statements to define actions you'll take in 2009, justifications for those actions, and notes about how you'll pay for them.

In the end, that's what a business plan is:
- A statement of your mission or vision
- A statement of your goals (action plan) for the the year
- A justification for these actions in light of your company mission statement

Now review again . . .
- Are hardware sales projections realistic, based on 2008?
- Are software sales projections realistic, based on 2008?
- Are hourly labor sales projections realistic, based on 2008?
- Are managed service sales projections realistic, based on 2008?

Think. Have fun. Make notes.

Be able to justify your decisions to your spouse and your accountant.

- - - - -

Now go backward . . .

Just for fun, now that we have most of our numbers for 2008, and projections for 2009, let's do a quick recap of how we got here.

Look at the Excel spreadsheet you downloaded in Part 1. The third worksheet is entitled "Where We've Been." Go there now.

Now that you have the general numbers to plug into 2008 and 2009, let's go back into QuickBooks and plug the numbers for 2006 and 2007.

Why? Well . . . we're looking for more of those quick explanations. Why is one month so big, and why does an expense drop off suddenly?

It's a good idea to summarize income and expenses for about three years going back.

You don't have to do anything with this information now, but I'll bet you do anyway. :-)

As a curious business owner, you'll look for trends. Cause and effects. Do you have cyclical "ups and downs" in your business?

- - - - -

Now go forward . . .

You've got a first run at 2009 numbers. Now speculate about 2010 and 2011.

These are very wild guesses. No one has a crystal ball.

But that doesn't relieve you of the responsibility to make some choices (and guesses) about your business.

I hope you see what this gets you: a total view of your business. Even if your business plan doesn't have one complete sentence, you can look at these notes, spreadsheets, mission statement, and goals all at once.

Your 3-ring binder might only have five pages, but it should be a very nice summary of where you've been and where you're going.

- - - - -

I've received a few comments and emails from folks who want to know how to get off their butts and get started. I don't know what to tell you except Do It!

Earlier I encouraged you to sit down 20 minutes a day and review where you've been and where you're going. If you do that, and give that few minutes a day to the process, you'll have your business plan in very short order.

Next Up: Building a Marketing Plan in light of your business plan.



  1. I sense a new book/Audio coming on here... marketing plan in a month..

  2. No, not this one.

    There's lots of good stuff out there.

    I'm just trying to get people off their butts.



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