The Master Plan


Many people assume that a formal business plan is only for big time businesses. Wrong. A business plan is for anyone who wants to give their enterprise their best possible shot. It is where you detail out all the operational, marketing, and money matters of your business. It is, in essence, a road map. With it, you will better be able to reach your goal. Without it, you run the risk of spending precious time and money traveling in circles or unwittingly wandering into danger zones.

In response to the question, what a business plan is, follow the following”

  • A business plan is written by the home-based business owner with outside help as needed.
  • It is accurate and concise as a result of careful study.
  • It explains how the business will function in the marketplace.
  • It clearly depicts its operational characteristics.
  • It details how it will be financed.
  • It outlines how it will be managed.
  • It is the management and financial “blueprint” for startup and profitable operation.
  • It serves as a prospectus for potential investors and lenders.

A study for “why” of creating it, note:

  • The process of putting the business plan together, including the thought that you put in before writing it, forces you to take the objective, critical, unemotional look at your entire business proposal.
  • The finished written plan is an operational tool, which, when properly used, will help you manage your business and work toward its success.
  • The complete business plan is a means for communicating your ideas to others and provides the basis for financing your business.

While you are to be the author of the document, you shouldn’t hesitate to get professional help when it comes to areas outside your ken, such as accounting, insurance, capital requirements, operational forecasting, and tax and legal requirements. Finally, in response to the question, “When should Business Plan be used?” note:

  • To make crucial startup decisions
  • To reassure lenders and backers
  • To measure operational progress
  • To test planning assumptions
  • As a basis for adjusting forecasts
  • To anticipate ongoing capital and cash requirements
  • As the benchmark for good operational management

If you have been doing your research and homework all along, you probably have most of the raw material for the business plan, so it won’t be such an awesome task.

Business plans differ greatly, depending on the nature and scope of the enterprise. Some elements a person in a retail sales business would need in his or her business plan may be totally irrelevant for your service business. Similarly, business plans vary in length—from five or six pages or a virtual booklet; some are written in an engaging narrative style while others take another approach—just the facts. However, while business plans may differ in style, tone, length, and components, there is some common ground. Below is a list of items that should be in almost every business plan:

  • A summary of the nature of your business and its principal activity with a detailed description of the product(s) or service(s) you will offer.
  • A statement as to the form your business will take (sole proprietorship, partnership, incorporation) and how it will be managed and operated (with information on employees or subcontractors if applicable).
  • A discussion of any extra-ordinary (and potentially problematic) matters revolving around such things as space requirements, production processes, and operating procedures.
  • A discussion of major trends in your trade or profession.
  • A discussion of your competition and the basis on which you will compete.
  • A description of your target market that might include a profile of a typical customer or client.
  • A discussion of your plans for pricing, sales terms, and distribution.
  • A discussion of how you intend to advertise and promote your products or services.
  • A detailed statement of startup and operating costs for at least the first year.
  • A discussion of how your business will be financed.
  • Profit and loss and cash flow statements for at least the first year of business.

If this list has made a business plan seem all the more scary and arduous a task, don’t panic. There are books on the market that will guide you through the process.

A clean attractive business plan is a sine qua non if you will be applying for a loan or looking for investors. But even if the document is for your eyes only, you owe it to yourself to produce a professional-looking document. Since it is your road map, the neater it is the better it will serve you when you refer to it at various stages of your entrepreneurial journey.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

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Just about Cash Flow


Cash flow is different from profit. Profit is the difference between revenues and expenses. Cash flow is the difference between receipts and disbursements of cash. Profit may flow whether or not anybody has paid for anything. Cash flows only when somebody pays for something. Time after time, businesses with good sales and good profits go broke. It is surprisingly commonplace. The problem is the the cash doesn’t flow when the profit flows.

The explanations for the large number of new business failures, undercapitalization, inadequate management, and poor marketing, may be valid, but the overwhelming reason is that the managers did not understand cash flow. They behaved as if profit were cash, which is not. They acted as if all that is needed to win the business game is to make a profit, which is not true. Cash is different from profit. You need both to win the business game.

A business can survive and thrive only if it has both positive profit (not losses) and positive cash flow (more flowing into the bank than out of it). To win you must produce more than you consume, and you must do it in such a way that you can meet critical payments as they come due.

Profit may be the most common measure of whether a business is winning or losing, but cash flow is the most critical measure. Businesses can survive a surprisingly long time without profit. They die on the first payday there is no cash.

Your company’s bank is like a jar is a reservoir, so it is the gas tank. And what is in the reservoir is easy to measure. The amount in the reservoir is what was put in minus what was taken out. A convenient way to measure whether the supply is increasing or decreasing is to measure whether more was entering or leaving during the most recent period of time. Cash flow into the bank account is such a measure. How much is in the reservoir is of intetrest, of course, but it is changed by changing the cash flow.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Planning your Slide Presentation


Great slide presentations are visual experiences backed by audio to enhance the drama and make important points. Most slide presentations are audio presentations, in which the spoken word is backed or reinforced by a visual display. There is a big difference between those two approaches.

For business meetings, most managers work out the text of their remarks, then compose slides to fit those remarks by illustrating main points or clarifying concepts. This puts the person doing the presentation into the foreground, and the slides projected onto the screen in the background. There is nothing wrong with this approach, except the final product isn’t imaginative and tends to become dull after a few minutes.

If this is the use to which you wish to put slides, the overhead projector is probably a better choice. Especially if the material on the slides consists of numbers, graphs, tables, or words.

Good slide presentations are more visual than verbal. Or, at the least, the audio portion of the presentation is enhanced by the visuals projected onto the screen.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

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