Category Archives: Business Plan

Will you be able to weather the storm?

us funds

When writing a business plan, it’s important to consider ‘seasonality’. ‘Seasonality’ is a way of predicting consumer behaviour. How often do customers buy? When do they buy?  Is there some sort of predictable pattern?

Example of seasonality

A classic story that is an interesting example of seasonality is one that a beverage company applied. The beverage company noticed sales were strong in the summer but slumped in the winter. Their study of seasonality in 1924 allowed the beverage company to apply a marketing strategy to be applied so sales would increase during the winter months. The company tried for many years to increase winter sales but it wasn’t until 1931 that the image of St. Nick as a poor or homeless slob was glossed up as a jovial, beautiful red and white coat wearing generous gift giver, the Santa Claus of today. Coke had re-created the image of Santa Claus and it overcame their sluggish winter sales.

tomaddv santa claus

Why should you consider seasonality when writing a business plan?

Seasonality is important to consider when planning your business so you can plan for the lows with a strategy in place, figure out your bare minimum in sales that you need to break-even. It is very important that you do market research and talk to people in the industry to find out what the historical data is and essentially find out, how businesses weather the storm. For example, if you are in the automotive industry, when are cars more likely to need repairs? If you are an engineering consultant, is there a season when people are hard to find or on vacation? If you are an accountant, how do you get people to see you before the tax deadline? Sometimes, in your industry, you many notice more trade shows in a certain season, these are usually held to not coincide with your busy selling season.

Write a business plan including seasonality.

In your business plan in the sales forecast, please apply the knowledge you’ve gathered from market research to include seasonality. To take it one step further, show how you will combat the slow season and how much your marketing strategy will cost you.

 

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Asking for Permission – A Regulated Marketing Strategy

YOU HAVE PERMISSION

On July 1st, 2014, it will no longer be possible in Canada, to send mass email to potential or existing customers, without consent.
Canada’s Anti-Spam Law has three main components:

1. Who are you sending the message to?
(is it a potential or existing customer?)

2. What type of message are you sending?
Is it by email, SMS or similar platforms?
Is it promotional, informational or include any aspect of marketing?
Is it misleading or false in any way?

3. Are you including your name and business, the name of anyone else you may be sending the message on behalf of,  your current mailing address, phone number, email, or web address.
Are you including ways to unsubscribe within 10 days at no cost to the customer?

I believe that Seth Godin’s term “Permission-based Marketing” is the best case scenario or a standard of best practices and now Canada’s anti-spam laws are modelling the idea that you should ask permission before being marketed to.

I agree fully with asking permission and actually think companies that were mass marketing before are now in a position of power to see who actually wants to receive their email. This is insight.

As a business owner, I will not know how many people receive the mass email I sent them and delete it and the reason why the would delete it. Although, I would never market to my customers that way. I believe if you honestly make an effort to know your customers, you will know and capture them.

I believe this anti-spam law is a standard of practice that will help business owners get to know their customers a bit better and help remove the population that you haven’t spent time on getting to know better. Opportunity awaits!

http://fightspam.gc.ca/eic/site/030.nsf/vwapj/ThreeThings_toThinkAbout-eng.pdf/$FILE/ThreeThings_toThinkAbout-eng.pdf

 

 

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Five Ways Business Plans Can $ave You Money – An Ice Cream Business

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Source: Istockphoto

 

We all want to get around to doing our business plans – some of us want to do it, but it keeps getting pushed down to the bottom of the to – do list. Sales are a force to be reckoned with, complaints came in, and taxes were overdue too so the, now dreaded, business plan got lost in the shuffle.

When I talk to business owners, they often tell me their main concerns are, increasing sales and decreasing costs. Here are 5 ways a business plan can save you money:

1. It will help you stay prepared and focused. When you are are not focused, you can start floundering around with vendors, target demographic, or values. These changes can confuse customers. A business plan can change, however, when you are following a business plan, you are more likely to deviate from the original focus and adjust accordingly rather than completely abandon original plans. For example, if you wanted to open an ice cream shop, you could focus on providing 80% dairy ice cream and 20% dairy free ice cream. If you didn’t have a plan, you might be more likely to change the concept and percentage to 50% dairy and 50% diary free.

Imag

Source: rontalk.com

2. A business plan can help measure what is working and what isn’t. For example, in the sales and marketing portion of your plan, you can apply a marketing strategy. You can sales projections based on the time and money spent on your marketing strategy. If your strategy is working, you can feel confident and measure your growth. If your sales are lower than expected, then you can try using other strategies that are similar in budget or allocated time to help increase sales. For example, if your ice cream marketing strategy is to advertise by handing out free samples by the beach, you can measure, how much sales increased directly after that strategy and measure it in your plan.

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Source: motherearthnews.com

 

3. A plan can help you plan and see in your expected expenses, the potential cost of running your business. There will be lots of little items that you may forget to include or not realize are unnecessary. You can see in your sales forecast, the potential profit margin and look at ways to decrease money spent in order to make a sale. For example, you may have the cost of the ice cream, the employees, the lease but you may forget to include the bank fees for using a point of sale terminal. Your plan will help you realize the cost by calling attention to your actual expenses.

4. A plan can help you save money by planning how to handle customer complaints and being ready with a company policy. Not being prepared with an operations plan can delay customer relationship issues, create bad morale, and create bad press. When you have a plan in place as to how you will deal with customer complaints, you can decrease how much time and effort will spent on the issue. For example, if a customer ordered ice cream to be delivered in your monthly subscription and the ice cream arrived melted, than you can decide before hand, how you would like to deal with the customer complaint. Will you refund the customer or delight the customer with a surprise? Remember, it costs 4 times as much to acquire a new customer than to keep an existing one.

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Source: foodpics.com

5. You can plan for “seasonality” or the high seasons and low seasons for your business. For example, if you own an ice cream shop in a market with 4 seasons, you know that there will be a high season and low season. In order to be efficient, you may look at planning for the Christmas gift season by creating packaged gifts, or you may add warm drinks to offset your low season. Perhaps after you see the seasonality, you will decide to introduce a subscription that will have ice cream delivered monthly to your loyal customers.

 

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How to Write a Business Plan – Part 3 of 3 – Financials and Executive Summary

 

 

photo credit: bank68.org

photo credit: bank68.org

This may the shortest part of how to write your business plan series- that is because you are going to have to fill in a lot of the blanks yourself. This next section has the most clout with investors, bankers, accountants, as well as the owner of the business. When reviewing plans, this is the section I look to – first. If I like what I see, I read the executive summary , and if I like that, I continue to read the rest of the plan.

Financial statements are to be included in your plan, just remember, they are projected and haven’t happened yet.

Here is a list of financial statements that should be included:

 

Projected Cash Flow

Money IN and Money OUT from month to month.It is only a projection but it will be adjusted and can serve as a great planning tool and indicator.

 

Image credit: commons.wikimedia.org

Image credit: commons.wikimedia.org

Projected Income Statement

Shows Profit or Loss over a period of time (quarterly and annually)

 

Projected Balance Sheet

Shows your Assets = Liabilities + Owner’s Equity

The information from this statement comes from the two above, projected income statement and the projected cash flow.

 

Image Credit: shutterstock_112218428

Image Credit: shutterstock_112218428

Your business plan is almost done. Now it just needs a one page Executive Summary as the first page of your business plan. Your executive summary includes highlights of your Sales & Marketing plan, your Operations plan as well as your Financial plan.

Once you have completed compiling the information, make sure you have at least two people review your business plan. When receiving comments, be thankful and consider making changes. The best part about writing a business plan is that it is expected to change. The plan is a guide and is only useful if it is seen as a tool to keep your goals and dreams more likely to occur. More than likely to occur, if for say, you write down your dreams on a napkin. Whether you write them down or not is not the ultimate predictor of your business achieving your milestones, however, conducting research, planning ahead, and creating opportunities through networking while putting your plan together will all have a positive effect on turning your dreams into goals, turning your goals into manageable tasks, and turning your tasks into operational plans.

 

Photo Credit : writeawriting.com

Photo Credit : writeawriting.com

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How to write a business plan – Part 2 of 3

legal imagekeys of all colours
In this post, we will work on our Operations Plan. If you have completed your first portion of the plan, the Sales and Marketing plan – great work! If you need a review – go back to part 1 of How to Write a Business Plan.

In the operations plan, there are a few major areas that need to be focused on, which are the following:

A. What will you need to do to open your doors, or virtual doors?

B. How will you make your product or service?

C. Who will you hire?

The operations plan is how you will actually run your business. What will you do on a day – to – day basis? There are many details that some entrepreneurs haven’t spent much time planning on so it is paramount that when you are planning for the future, you are diligent in researching and predicting what could occur when you are open for business.

Go down to City Hall and find out what regulations you need for your business for your city, for example, (A business license). Before you begin the process it is important to consider which legal aspect of business suits your needs.  I am not a lawyer, so it is important that you know what legal form of business your company should take. It will fall along the lines of Sole Proprietorship, Partnership or and Incorporation.

 

the law

Which works for you best is your decision, I highly recommend you talk to an accountant and lawyer to find out which form has the highest advantages  for your specific situation. There are pros and cons to all types so your first task as owner is finding out which legal form  has the best fit; sole proprietor, partnership or incorporation.

The next thing to focus on in your operations plan is: Where will you do business?  From your kitchen table, shared office, coffee shop, or on site.

 

doing business from home

Let’s move on to something entrepreneurs really could focus on a bit more, that is seasonality. What is typically a slow season or busy season for you? I’ve had people from all kinds of business know when they would be busy but do absolutely nothing to plan and ramp up for it. If you will be very slow during a certain month, will you need the same number of employees, or supplies?

seasonality more

Mention in your operations plan – any permits, regulatory items, certification you might need to legally run your business.

Also, who is going to watch your books? Where are you getting your money from to run on Day one? The bank, crowdfunding, or available grants?

bank loan    crowdfunding

 

Are you making something from scratch? Who does that and where? How much does it cost? How much will you charge and why?

 

handcarved

Who is going to run the show? Are you working yourself?

The important parts of the operation plan are WHAT? What needs to occur? TIME? When will you do the job you are going to do and how long will it take?  COST? How much does it cost for materials and wages?

project triangle

These are some key components of an operations plan. The legal, human resources, and production part of the plan need to be detailed. Here are some great resources in Canada:

 

http://www.bossyourselfbc.ca/

http://www.resourcecentre.gov.bc.ca/

http://www.bizpal.ca/en/

http://crowdfunding.com/

and State Side

http://www.whitehouse.gov/economy/business/startup-america

http://www.foundationcenter.org/

https://www.crowdfunder.com/crowdfunding/united-states

 

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