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plan

May 29, 2016 Leave a comment

It’s my birthday today. I’ve gotten lots of great gifts from my lovely family and loved ones. I’m feeling so happy and magnanimous that I’ve decided to share what goes into the preparation of an excellent business plan; well, the way we do it at Herança Financial. I’m expecting guests from 2:00 pm, so I’ll make this quick.

planThe first part should be the Executive Summary. As part of the name implies, it is a summary of the entire document. This means even though it comes first, it is usually prepared last. Essentially, it should have briefs on the most important aspects of the company to banks and prospective investors – profile, market analysis, start up cost, and projections.

Next is the Company Overview. This is where you put in the profile of your company (logo too, if you have one), your motto/slogan, your clear-cut mvvpp/mission, vision, values, philosophy, and positioning statement; your products/services and the pricing, your management structure, and the equity distribution of your company.

The Marketing Plan comes next. It is most likely going to be the bulkiest part of the plan. It should have a comprehensive profile of your primary and secondary target markets, analysis of your competition (direct and indirect), SWOT analysis of your company and the competition, your competitive strategy/unique selling point (usp), your market share analysis and potential, and your marketing strategy for making sales to your target customers.

Next, if you choose to or would find it advantageous, develop a Networking Plan. This will basically list places where you’d regularly socialize (to market yourself and your business), your goals (to meet mentors, investors, and/or prospective customers), your budget, and the frequency of attendance.

Then, it’s time for the Operations Plan. Here, you list prospective location options and analyses of the various locations (including zoning and the layouts), required personnel (yourself, included) and respective job descriptions, and the compensation plan (wages/salaries, overtime pay, bonuses, severance packages, study leaves, maternity/paternity leaves, and so on).

Another optional section is Government Assistance. You can include this for your personal use and/or to demonstrate you’ve done your homework on grants available to entrepreneurs and SME owners in your industry and proposed area of operation.

Finally, the most important section to banks and investors, the Financial Plan. This will house your balance sheet or personal net worth statement (if your company is not yet operational), start up cost/SUCs (include the utility bills projections and wages for defined length of time), your revenue model, sales forecast/projections (monthly, quarterly, and Year One to Year Three/Five), loan repayment structure, and [projected] income statement.

If you want to go the extra mile, like we do, put in a Customer Service Plan. This will have your code of conduct, dispute policy, employee discipline and evaluation practices, social media decorum, and so on). You can also add your Corporate Image Package/CIP. This will simply have samples of your brochure, business card, invoice, letterhead sheet, and flyers).

That’s it.

If it seems like a lot of work, it’s because it is!

You can always contact Herança Financial for assistance.

All the best!

 

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entrepreneurship 101

April 13, 2015 Leave a comment

Every time I’m invited to give a lecture, or speak on entrepreneurship/starting a business, I have an outline I usually work off, and then, I give illustrations the audience can identify with to expatiate. Today, I’ve decided to share that outline for the benefit of those whom I may never have the privilege of speaking to (physically or virtually); at least, my words/writing may exceed/extend my reach.

Entrepreneurship 101

ENTREPRENEURSHIP
 Entrepreneurship starts with a need, and then, an idea on how to satisfy that need.
 Entrepreneurs are people who identify a need and work towards satisfying it, or improving upon an already existing business concept. They provide products and/or services to satisfy specific needs while making a profit.
 Entrepreneurs need to be POP – Passionate, Opportunity-Seeking, and Persistent – in order to be successful.
• Passionate: Passion is the intense love you have for and the satisfaction you derive from what you do. If ego, family, or money is the only reason you decide to become an entrepreneur, entrepreneurship may not be for you. A lot of times, it is only the passion for what you’re doing that keeps you going.
• Opportunity-Seeking: You have to develop the ability to see the favorable chances/uses for your product or service everywhere.
• Persistent: Don’t get easily discouraged. Be prepared to hear “no” a lot of times before you get a “yes”.

SMALL BUSINESS
 A small business is any business one plans to start, or an idea one plans to introduce to the marketplace.
 Any entrepreneur can be a business owner, but not every business owner can be an entrepreneur. This is because an entrepreneur is unique in his/her approach to business.
 If you fail to plan, then you plan to fail; 30% of small businesses fail after two years of business because they had no business plan – not enough research/planning, little funding, poor management, and/or no adaptive measures.

BUSINESS PLAN
 A solid business plan is the foundation for any successful business.
 A good business plan has an executive summary, company overview, marketing plan, operations plan, financial plan, and sometimes, a customer service plan, funding plan, and networking plan.
 A business plan gets you funding from investors, not a business proposal.

PRODUCT OR SERVICE
 Unique Selling Point (USP) is the mark of distinction of any business. It is what separates your business from current and prospective competition. It generally should focus on FAB (features, advantages, benefits), not pricing.

TARGET MARKET
 Never make the mistake of assuming your products or services will appeal to everyone. There is no such thing.
 Your target customer is the person or business with the highest probability of buying your products or services – primary (high demand for your products/services), secondary (needs convincing to buy your products or services) and invisible (never considered would require your products or services).

COMPETITION
 Your competition is the person or business who offers the same products/services or benefits, as perceived by your target customers – direct (offers the same products/services), indirect (offers the same benefits), and invisible (has the capacity and desire to offer the same products, services or benefits).
 Competitive Intelligence is the process of learning, collecting/gathering and using information about your competition for the purpose of growing your own business.

FINAL WORDS
 Know when to move on to the next idea. Entrepreneurship isn’t just about the idea, but the execution of the plan.
 Always refer back to your business plan, and update it as your business evolves.
 Funding options – Family, Friends, Grants, Angel Investors, Partnerships, Bank Loans and Venture Capital.
 You cannot do it all alone – build a team or support system (family, friends, partner etc.)
 Customer satisfaction, not money, should be your primary goal.
 There will be good times, and there will be bad times, but it’s an exciting journey. Enjoy it.

There are no illustrations, but I do hope this makes a difference in your business life. All the best!

suc

February 3, 2015 Leave a comment

As promised, I’m resuming with the pre-business list, and next up is Start Up Costs (SUC). Start Up Costs is basically everything your business venture requires to get up and running. If you’re a serious entrepreneur, it will be a part of the Financial Analysis section of your business plan.

I’ll segue here, just in case I haven’t previously emphasized the importance of a business plan. It is absolutely crucial. It is your road map, and possibly one of the most important documents you will ever own. A good business plan should have an Executive Summary, Company Overview, Market Plan, Operations Plan, Financial Plan, and Corporate Image Package (CIP). The Financial Plan should consist of the balance sheet/personal networth statement, start up costs (SUC), revenue model, projected income statement (profits and losses), and projected cash flow/projections (monthly, 1 year and 3-5 year projections).

The Executive Summary and Financial Plan are the two most important sections any investor worth his/her salt would want to inspect first, more so the financials. Therefore, do not make the mistake of educated guesses or guesstimations; not only will that reduce its credibility, but you will grossly underestimate what is required, and consequently run out of money. Hence, when preparing your SUC, you have to really take the time to think everything through, make a list and do your research on the costs/prices of the requirements.

Generally, your SUC should basically center around current assets (like cash-in-bank, and inventory) and fixed assets (like equipment, and office space). By way of example, a standard SUC sheet should contain: furniture – abc amount, internet/telephone set up – xyz amount, consultation/license fees – abc amount, desktop computer/laptop – abc amount, car/van – xyz amount, and so on. You should even list assets required that you already own and their current values., as well as prepaid expenses, like company registration fees, and so on.