So you have come to stage of writing your business plan and you have decided to take the long and tedious road to do it rather than using business plan services or financial forecasting tools specifically made for what you are doing at the moment? That's fine and of course you will come out on the other side a much more educated person with reference to how the different elements of the business plan contribute to your business. The bank manger may have asked you to compile a business plan or you have met a possible business investor asking for a business profile or plan to illustrate just how you are going to gain the market share that you mentioned at the networking event and how your costs will be so low that your business will break even in the fist 6 months.
What are good business plans really about? Well, such a plan will need to be as short and as clear possible; out of it, the potential investor will have to clearly understand the product and the service provided, the track record of the company, financial statements and, above all, the reason you are asking for such a funding. Keep in mind that this plan will have to convince the investor of your commitment to the business, and this can only be done if you will draw a clear picture of your strategies.
At all times, remember that you have to thoroughly study-and thus understand- the elements that will help you build good, solid business plans. Unfortunately enough, there are many of those looking for funding that spend a lot of time and energy trying to promote their ideas, their projects, but forget that unless their business plans are valid, unless they have something good, nobody will take them seriously and invest in their projects. Let's speak the truth: not even you would invest in a business that has no proof that it is sound, that the financial premises are valid; without clear information nobody can decide, so nobody will be willing to listen to you or read your project up to the end.
If you have came to understand how important it is to set up clear business plans before actually going on and trying to convince anyone, then you must have reached the conclusion that good advice is in order. Fortunately, there are a lot of places you could get counseling or assistance, things that will help you easier your business plans easier and in a more correct manner; apart from all the counseling offices, you will also be able to find books and other online resources that will show you how to come up with a quality project. Many of those books have been written by professionals, and if you know how to pick the right ones you will undoubtedly find out more about successful business plans and the key to better understanding of the market environment.
Remember that nobody likes long talks that express nothing; if you want to have a clear chance of obtaining the loan, the start up capital you so much need, you will have to be clear and communicate the facts as they are. This means that you will have to convince the funding source using one of the best business plans there can be, in order for the other to accept any kind of transaction.
Make sure your plan is detailed but to the point. Make sure your plan consists of realistic facts and data that is well researched. Make sure your plan is realistic and the market research has been done well. Do this and you will have a great chance of getting the business finance you need.
Wednesday, February 2, 2011
Monday, January 10, 2011
Construction business planning
Today we will be looking at business plan software relating to the construction industry. In order to run your business faster and more efficient there are numerous programs out there for tailor-made to suite your needs. I have chosen to discuss the points and facts about the business plan software program called “Plan Magic Constuction 11.0. Please refer to the following to get a better understanding of the benefits of using this programme.
Write a construction business plan
PlanMagic Construction 11.0 offers an easy to use well written construction business plan template in a popular word processor format, a fully automated close-to-reality financial projection application in MS Excel, an easy to use presentation template, and a comprehensive business plan guide. The Advanced Edition -AE- provides additional state-of-the-art financial analysis tools. plan any construction business like a pro
plan to finance any construction business start-up or expansion
surprise any potential investor with a thorough and complete presentation
analyze the financial situation with state-of-the-art analysis tools
stay up-to-date with the real financial situation at all times
unlimited what-if and other analyses for 5 years without loss of data
It's a program that produces faster results than any other, and is brought to you by a company with over 25 years of related experience. It is a helpful CONSTRUCTION business plan program and offers the necessary flexibility. Its structure is the preferred format today and it offers you a template that includes all that should be included in a business plan geared toward success. The financial application is the only construction specific close-to-reality planner in the world.
Designed to help construction companies and contractors make decisions faster and easier. It's the best value your money can buy when it comes to construction business plan and construction financial plan software.
Construction business plan template
The preferred format construction business plan template for investors, SBA, banks and angel investors in MS Word format.
You don't have to create your own contents from scratch or delete most of it as may be the case with a sample plan. You'll always get professional printed results. The program includes the construction business plan template. The plan template is fully geared towards the general contractor, specialty contractor or any construction business. Easily add project plans, phasing diagrams, floor plans, specific plans and more as is needed. Easily insert financial data from the financial application.
Construction business plan financials
You will not find a better solution as specific, as detailed, and as automated. For consultants there is no limit to the number of projections and construction business plans that can be created. Enter some main assumptions, and start entering your financial data into the clearly marked cells. Use it for a construction or contractor business plan as well as for ongoing monitoring of your construction business.
Key advantages
• Offers PlanMagic's Smart Entry System (SES)™ to minimize and significantly speed up data entry.
• Validation checks for data consistency.
• Development can start up to 5 years prior to operations.
• Fiscal year and forecasts can start in any month.
• Forecasts include months, quarters, and years.
• Up to 5 years can be forecast in one financial workbook, with no limit if multiple workbooks are used.
• Views are collapsible for clear summaries.
• Costs can be split between fixed and variable cost for contribution, break-even and similar analyses.
• Projected balance sheets that are always balanced.
• More than 40 charts illustrate trends in expenses, sales, revenues, cash flow and more.
If you have purchased the Advanced Edition -AE-, you can add more product lines and more specific projects and enjoy more detailed financial analysis reports that surpass even the most expensive accounting programs.
It would be advisable to invest in such a program if you are finding that you cannot keep track of your finances, customer database and stock. The Advanced Edition could be purchased at a later stage once your business has grown to the next level. It is important to choose a program that is user-friendly and that can be easily utilized by your staff dealing with the admin and finances of your growing company. Online help and training is usually available for users of all business plan software users. Find the program that best suits your needs.
Write a construction business plan
PlanMagic Construction 11.0 offers an easy to use well written construction business plan template in a popular word processor format, a fully automated close-to-reality financial projection application in MS Excel, an easy to use presentation template, and a comprehensive business plan guide. The Advanced Edition -AE- provides additional state-of-the-art financial analysis tools. plan any construction business like a pro
plan to finance any construction business start-up or expansion
surprise any potential investor with a thorough and complete presentation
analyze the financial situation with state-of-the-art analysis tools
stay up-to-date with the real financial situation at all times
unlimited what-if and other analyses for 5 years without loss of data
It's a program that produces faster results than any other, and is brought to you by a company with over 25 years of related experience. It is a helpful CONSTRUCTION business plan program and offers the necessary flexibility. Its structure is the preferred format today and it offers you a template that includes all that should be included in a business plan geared toward success. The financial application is the only construction specific close-to-reality planner in the world.
Designed to help construction companies and contractors make decisions faster and easier. It's the best value your money can buy when it comes to construction business plan and construction financial plan software.
Construction business plan template
The preferred format construction business plan template for investors, SBA, banks and angel investors in MS Word format.
You don't have to create your own contents from scratch or delete most of it as may be the case with a sample plan. You'll always get professional printed results. The program includes the construction business plan template. The plan template is fully geared towards the general contractor, specialty contractor or any construction business. Easily add project plans, phasing diagrams, floor plans, specific plans and more as is needed. Easily insert financial data from the financial application.
Construction business plan financials
You will not find a better solution as specific, as detailed, and as automated. For consultants there is no limit to the number of projections and construction business plans that can be created. Enter some main assumptions, and start entering your financial data into the clearly marked cells. Use it for a construction or contractor business plan as well as for ongoing monitoring of your construction business.
Key advantages
• Offers PlanMagic's Smart Entry System (SES)™ to minimize and significantly speed up data entry.
• Validation checks for data consistency.
• Development can start up to 5 years prior to operations.
• Fiscal year and forecasts can start in any month.
• Forecasts include months, quarters, and years.
• Up to 5 years can be forecast in one financial workbook, with no limit if multiple workbooks are used.
• Views are collapsible for clear summaries.
• Costs can be split between fixed and variable cost for contribution, break-even and similar analyses.
• Projected balance sheets that are always balanced.
• More than 40 charts illustrate trends in expenses, sales, revenues, cash flow and more.
If you have purchased the Advanced Edition -AE-, you can add more product lines and more specific projects and enjoy more detailed financial analysis reports that surpass even the most expensive accounting programs.
It would be advisable to invest in such a program if you are finding that you cannot keep track of your finances, customer database and stock. The Advanced Edition could be purchased at a later stage once your business has grown to the next level. It is important to choose a program that is user-friendly and that can be easily utilized by your staff dealing with the admin and finances of your growing company. Online help and training is usually available for users of all business plan software users. Find the program that best suits your needs.
Saturday, December 4, 2010
Building a Financial Forecast for the Business Plan
This is not the easiest of tasks in creating a solid business plan. When creating a business plan however, it is essential to have a reasonable set of numbers. This is something often much easier done through using business plan services as much of the work and calculations are already done for you.
It is usually among the first things an investor, whether an angel investor or Venture capital firm looks at, it is where many of your initial answers to investor questions will come from, and yet it is the dependent variable or result of many critical business decisions made to get to this point.
The following is an abbreviated summary – a "walk through" the Income Statement. Some questions are used and some guidance given as to the types of considerations that should be made as you iteratively plan, forecast, edit and massage this spreadsheet hundreds of times in the coming months.
We will assume it is a product-oriented business. This drives certain items to be on the Income Statement as follows:
It all looks pretty standard. We usually only go out for three years. Who knows what it will really be like out there anyway? Hopefully you can show an operating breakeven in the third year or less. If not, then you should extend the period of time. Also depending on the business, you may want to add some unique line items to the P&L, but this should cover most of your expenses.
Revenue: This should be a list of the sources of revenue you anticipate over the plan period. Product sales, warranty and maintenance/upgrade fees, royalty income from licensing, NRE, consulting fees, and revenue-sharing income should there be any. For purposes of the basic income statement, we would probably put the detail of each of these line items in a backup spreadsheet, and only list the total revenue with subtotals for Total Product Revenue and Other revenues.
Cost of goods (COGs):
All costs on a unit basis for the products manufactured are to be included. If you are buying specific test equipment that may be going on consignment to the manufacturing subcontractor, that should probably go elsewhere. You would then include a capital equipment deprecation expense under operating expenses, or even below the operating expenses before taxes, but surely not in COGs. Sometimes, warranty support costs you may incur in the first year or two for a product are included before the Gross Margin line. This is debatable and you should probably have a good accountant look into this.
Depending on what your monthly average runrate of units to be shipped is, you may want to use a local manufacturer and then consider an offshore manufacturer for higher volumes. Even in the latter case, sometimes they have local onshore facilities and then transfer offshore when the volumes justify it. We would go with a local manufacturer until you have all the manufacturing bugs out of the product and then turn on the volume. Taking it offshore saves unit costs sometimes, but will certainly increase manufacturing management expense.
In the detail worksheet where you rollup the COGs, break them out for the number of units per product type, average selling price (ASP) per unit and so on. This is important when you have multiple product lines. You can always go back and rework one or more line items when you have more data without upsetting the whole worksheet. The result of all this then feeds into the Income Statement Summary sheet. Learning curves for price reductions for example are the highest on the semiconductor content portion. Prices may actually go up in some BOMs where the discrete component costs have reached maturation and the precious metals (tantalum capacitors) or market demand are driving prices back up. Software average selling prices (ASPs) always go down at varying rates – we've seen as much as 50-75% per year to as low as 5% per year or even flat - look at how high Microsoft Office has held prices over the last 5 years – a benefit of monopolism.
Gross Margins:
This should probably asymptote toward 20-25% in volume. Probably more like 60-70% initially but that should go down by year 2 to way under 50% unfortunately. You might want to check out some public companies that are in similar businesses already and use their P&L as an example of what is reasonable for you.
OPERATING EXPENSES
Here you list the kitchen sink as follows:
R&D
We break out R&D into the hardware and software components plus any external contracting as separates. You may even want to have separate lines for H/W and S/W contract engineering if you expect to have both. This is usually so you can track outside expenses and there may be some additional R&D tax credits so breaking them out might help later (see your accountant to see if this is still necessary).
On R&D we look to see how many person-hours are needed to complete the project, times their burdened monthly or annual rate (burdens of 50% usually will include all headcount-loaded facilities expenses less capital equipment per employee – PCs, shared printers etc.). If you just take payroll and add personnel benefits (insurances, employer's FICA, etc. it is more like 26-27%, maybe as high as 30% but no more. Travel and Entertainment (T&E) for engineering is usually fairly low – we figure about $2K/qtr. per senior engineer and zero for junior types- this covers customer visits and the one or two trade shows they attend per year.
Capital equipment per engineer is probably about $10K/engr./yr. unless you are buying specialized CAD S/W which can get way up there >$1M per department is not uncommon.
R&D as a percent of total expense will likely be 40-45% of total expenses in the early phases and settle into about 15-20% of revenues in the out years. Again look at some business models for comparison.
If you are doing NRE work, the revenues come in above the line and usually the engineering hours spent on your side are listed under "COGs" as a "manufacturing" expense. You can do this as a product company so long as it isn't a big part of your total income over the plan period. If it would be a significant percentage you would want to reorder your P&L somewhat.
Marketing
Sometimes the CFO will try to lump marketing and sales together. We hate this. They are two separate functions and how you balance resources between the two demands you separate them. For purposes of this P&L we have separated them. Marketing has staffing costs - salary times burden rates (same as for engineering). You might want to consider differences if they are in different states or countries, but we found even when dealing with Swedish and German groups, the deltas were not tremendous – but 5% can be a big number later. In the early years, it is not such a big deal.
Marketing costs to launch a company and product are important. They are non-periodic expenses and need to be planned for cashflow purposes especially. We would also build in the "ongoing" part of PR/marcom, collateral, website support, yadayadayada. Collateral costs are expensive. Capital equipment for a marketing/sales person usually will run only about $2K/person/qtr. with an initial $5K load upon hire. This of course discounts any really special tools needed. Capital equipment is usually scheduled separately and not in the P&L except for the capital equipment depreciation expense. Software usually gets written off as an expense item since most of it is much less than $1000 per package. This differs sometimes, but as a general rule, this is enough for now. T&E is about one trip every six weeks for the top marketing folks, once a quarter for others – this covers customer visits, trade shows, etc.
Any outside contracting you do in marketing should be included and counted separately.
Technical support
This lost child gets put in so many different places. We like to include it under Marketing initially because they are (or should be) the closest to the product via the sales channels. Later when life gets bigger you can move this to a separate organization or under Engineering or Manufacturing. This is mostly political – the key is to cover the costs and be able to look at it separately. This is often the kernel for a later full-scale tech support/customer service operation so it is good to see how it grows initially. There is a lot of variation on how much resource you should put here. We usually start with one or two people who can double-duty for marketing to create and give presentations, train initial sales people, keep the website happy, and write tech manuals if you're really lucky. Later, all these functions get split out into more compartmentalized pieces.
Warranty support refers to the costs and resources dedicated to tracking down returns from customers, getting them turned around back into the field, doing the hot swap for failed or suspected failed units, keeping the configuration control database up to date so you know what has been shipped to whom and at what rev. level.
Sales
This can also be called Business Development – fancy name for a bag carrier, but also at some point in the company's growth an important role to separate from the marketing efforts. Business development usually takes on the role of creating strategic relationships where sales channels or customers are involved. If the relationship has to do with a technology or a new product arena then it should be handled by the marketing grunts.
Here you include their base salaries and any bonus/draw/commission plans they have based on their performance – bookings, shipments, big deals closed, etc. Overhead and capital is about the same as for marketing; T&E is usually twice that of marketing.
G&A
The executive staff salaries, benefits etc. go here, plus any manufacturing management expenses not related to the unit cost of the product being sold. Also any facilities or other corporate costs that don't make sense to allocate to departments should be captured here. Legal fees are a good example. Others are building rent, insurances, office supplies, corporate jets and villas, and other essentials.
And guess what's left!!!
Profit Before Taxes (PBT)
PBT will undoubtedly have minus signs, parentheses or red ink involved initially, but it is important to see what all your decisions have done to your improving bottom line over time. The questions and answers they will drive are: when is operating breakeven? when do you begin to achieve your "success model" i.e., your target Revenue/GM/PBT as a successful business, and when will you need more cash, if at all. Usually the fund raising should start 6-9 months before you run out. Don't wait until the last moment where you might have to take bridge loans and other ugly financing alternatives.
We can forego thinking about Net Income for a while, although when profitable your loss carryforwards may start running out and you may actually have to pay taxes. You have arrived when that occurs.
We hope this is some help. It wasn't meant to be a tutorial but to help you think through some of the considerations as you build your financial plan. The financial plan should be a good tool to help you make decisions and be able to see what the results of those decisions turn out to be.
It is usually among the first things an investor, whether an angel investor or Venture capital firm looks at, it is where many of your initial answers to investor questions will come from, and yet it is the dependent variable or result of many critical business decisions made to get to this point.
The following is an abbreviated summary – a "walk through" the Income Statement. Some questions are used and some guidance given as to the types of considerations that should be made as you iteratively plan, forecast, edit and massage this spreadsheet hundreds of times in the coming months.
We will assume it is a product-oriented business. This drives certain items to be on the Income Statement as follows:
Revenue: This should be a list of the sources of revenue you anticipate over the plan period. Product sales, warranty and maintenance/upgrade fees, royalty income from licensing, NRE, consulting fees, and revenue-sharing income should there be any. For purposes of the basic income statement, we would probably put the detail of each of these line items in a backup spreadsheet, and only list the total revenue with subtotals for Total Product Revenue and Other revenues.
Cost of goods (COGs):
All costs on a unit basis for the products manufactured are to be included. If you are buying specific test equipment that may be going on consignment to the manufacturing subcontractor, that should probably go elsewhere. You would then include a capital equipment deprecation expense under operating expenses, or even below the operating expenses before taxes, but surely not in COGs. Sometimes, warranty support costs you may incur in the first year or two for a product are included before the Gross Margin line. This is debatable and you should probably have a good accountant look into this.
Depending on what your monthly average runrate of units to be shipped is, you may want to use a local manufacturer and then consider an offshore manufacturer for higher volumes. Even in the latter case, sometimes they have local onshore facilities and then transfer offshore when the volumes justify it. We would go with a local manufacturer until you have all the manufacturing bugs out of the product and then turn on the volume. Taking it offshore saves unit costs sometimes, but will certainly increase manufacturing management expense.
In the detail worksheet where you rollup the COGs, break them out for the number of units per product type, average selling price (ASP) per unit and so on. This is important when you have multiple product lines. You can always go back and rework one or more line items when you have more data without upsetting the whole worksheet. The result of all this then feeds into the Income Statement Summary sheet. Learning curves for price reductions for example are the highest on the semiconductor content portion. Prices may actually go up in some BOMs where the discrete component costs have reached maturation and the precious metals (tantalum capacitors) or market demand are driving prices back up. Software average selling prices (ASPs) always go down at varying rates – we've seen as much as 50-75% per year to as low as 5% per year or even flat - look at how high Microsoft Office has held prices over the last 5 years – a benefit of monopolism.
Gross Margins:
This should probably asymptote toward 20-25% in volume. Probably more like 60-70% initially but that should go down by year 2 to way under 50% unfortunately. You might want to check out some public companies that are in similar businesses already and use their P&L as an example of what is reasonable for you.
OPERATING EXPENSES
Here you list the kitchen sink as follows:
R&D
We break out R&D into the hardware and software components plus any external contracting as separates. You may even want to have separate lines for H/W and S/W contract engineering if you expect to have both. This is usually so you can track outside expenses and there may be some additional R&D tax credits so breaking them out might help later (see your accountant to see if this is still necessary).
On R&D we look to see how many person-hours are needed to complete the project, times their burdened monthly or annual rate (burdens of 50% usually will include all headcount-loaded facilities expenses less capital equipment per employee – PCs, shared printers etc.). If you just take payroll and add personnel benefits (insurances, employer's FICA, etc. it is more like 26-27%, maybe as high as 30% but no more. Travel and Entertainment (T&E) for engineering is usually fairly low – we figure about $2K/qtr. per senior engineer and zero for junior types- this covers customer visits and the one or two trade shows they attend per year.
Capital equipment per engineer is probably about $10K/engr./yr. unless you are buying specialized CAD S/W which can get way up there >$1M per department is not uncommon.
R&D as a percent of total expense will likely be 40-45% of total expenses in the early phases and settle into about 15-20% of revenues in the out years. Again look at some business models for comparison.
If you are doing NRE work, the revenues come in above the line and usually the engineering hours spent on your side are listed under "COGs" as a "manufacturing" expense. You can do this as a product company so long as it isn't a big part of your total income over the plan period. If it would be a significant percentage you would want to reorder your P&L somewhat.
Marketing
Sometimes the CFO will try to lump marketing and sales together. We hate this. They are two separate functions and how you balance resources between the two demands you separate them. For purposes of this P&L we have separated them. Marketing has staffing costs - salary times burden rates (same as for engineering). You might want to consider differences if they are in different states or countries, but we found even when dealing with Swedish and German groups, the deltas were not tremendous – but 5% can be a big number later. In the early years, it is not such a big deal.
Marketing costs to launch a company and product are important. They are non-periodic expenses and need to be planned for cashflow purposes especially. We would also build in the "ongoing" part of PR/marcom, collateral, website support, yadayadayada. Collateral costs are expensive. Capital equipment for a marketing/sales person usually will run only about $2K/person/qtr. with an initial $5K load upon hire. This of course discounts any really special tools needed. Capital equipment is usually scheduled separately and not in the P&L except for the capital equipment depreciation expense. Software usually gets written off as an expense item since most of it is much less than $1000 per package. This differs sometimes, but as a general rule, this is enough for now. T&E is about one trip every six weeks for the top marketing folks, once a quarter for others – this covers customer visits, trade shows, etc.
Any outside contracting you do in marketing should be included and counted separately.
Technical support
This lost child gets put in so many different places. We like to include it under Marketing initially because they are (or should be) the closest to the product via the sales channels. Later when life gets bigger you can move this to a separate organization or under Engineering or Manufacturing. This is mostly political – the key is to cover the costs and be able to look at it separately. This is often the kernel for a later full-scale tech support/customer service operation so it is good to see how it grows initially. There is a lot of variation on how much resource you should put here. We usually start with one or two people who can double-duty for marketing to create and give presentations, train initial sales people, keep the website happy, and write tech manuals if you're really lucky. Later, all these functions get split out into more compartmentalized pieces.
Warranty support refers to the costs and resources dedicated to tracking down returns from customers, getting them turned around back into the field, doing the hot swap for failed or suspected failed units, keeping the configuration control database up to date so you know what has been shipped to whom and at what rev. level.
Sales
This can also be called Business Development – fancy name for a bag carrier, but also at some point in the company's growth an important role to separate from the marketing efforts. Business development usually takes on the role of creating strategic relationships where sales channels or customers are involved. If the relationship has to do with a technology or a new product arena then it should be handled by the marketing grunts.
Here you include their base salaries and any bonus/draw/commission plans they have based on their performance – bookings, shipments, big deals closed, etc. Overhead and capital is about the same as for marketing; T&E is usually twice that of marketing.
G&A
The executive staff salaries, benefits etc. go here, plus any manufacturing management expenses not related to the unit cost of the product being sold. Also any facilities or other corporate costs that don't make sense to allocate to departments should be captured here. Legal fees are a good example. Others are building rent, insurances, office supplies, corporate jets and villas, and other essentials.
And guess what's left!!!
Profit Before Taxes (PBT)
PBT will undoubtedly have minus signs, parentheses or red ink involved initially, but it is important to see what all your decisions have done to your improving bottom line over time. The questions and answers they will drive are: when is operating breakeven? when do you begin to achieve your "success model" i.e., your target Revenue/GM/PBT as a successful business, and when will you need more cash, if at all. Usually the fund raising should start 6-9 months before you run out. Don't wait until the last moment where you might have to take bridge loans and other ugly financing alternatives.
We can forego thinking about Net Income for a while, although when profitable your loss carryforwards may start running out and you may actually have to pay taxes. You have arrived when that occurs.
We hope this is some help. It wasn't meant to be a tutorial but to help you think through some of the considerations as you build your financial plan. The financial plan should be a good tool to help you make decisions and be able to see what the results of those decisions turn out to be.
Sunday, November 21, 2010
Why business planning should be ongoing
Most potential investors or lenders will want to see a business plan before they consider funding your business. Although many businesses are tempted to use their business plans solely for this purpose, a good plan should set the course of a business over its lifespan and with modern business plan software becoming ever more user friendly and sophisticated, the planning process is now faster and more effective than ever..
A business plan plays a key role in allocating resources throughout a business. It is a tool that can help you attract new funds or that you can use as a strategy document. A good business plan shows how you would use the bank loan or investment you are asking for. See our guide on how to use your business plan to get funding.
Ongoing business planning means that you can monitor whether you are achieving your business objectives. A business plan can be used as a tool to identify where you are now and in which direction you wish your business to grow. A business plan will also ensure that you meet certain key targets and manage business priorities.
You can maximise your chances of success by adopting a continuous and regular business planning cycle that keeps the plan up to date. This should include regular business planning meetings which involve key people from the business.
To find out more, see our guides on how to review your business performance and how to assess your options for growth.
If you regularly assess your performance against the plans and targets you have set, you are more likely to meet your objectives. Doing this can also signpost where and why you're going astray. Many businesses choose to assess progress every three or six months.
The assessment will also help you in discussions with banks, investors and even potential buyers of your business. Regular review is a good vehicle for showing direction and commitment to employees, customers and suppliers.
Defining your business' purpose in your business plan keeps you focused, inspires your employees and attracts customers.
A business plan plays a key role in allocating resources throughout a business. It is a tool that can help you attract new funds or that you can use as a strategy document. A good business plan shows how you would use the bank loan or investment you are asking for. See our guide on how to use your business plan to get funding.
Ongoing business planning means that you can monitor whether you are achieving your business objectives. A business plan can be used as a tool to identify where you are now and in which direction you wish your business to grow. A business plan will also ensure that you meet certain key targets and manage business priorities.
You can maximise your chances of success by adopting a continuous and regular business planning cycle that keeps the plan up to date. This should include regular business planning meetings which involve key people from the business.
To find out more, see our guides on how to review your business performance and how to assess your options for growth.
If you regularly assess your performance against the plans and targets you have set, you are more likely to meet your objectives. Doing this can also signpost where and why you're going astray. Many businesses choose to assess progress every three or six months.
The assessment will also help you in discussions with banks, investors and even potential buyers of your business. Regular review is a good vehicle for showing direction and commitment to employees, customers and suppliers.
Defining your business' purpose in your business plan keeps you focused, inspires your employees and attracts customers.
Tuesday, October 5, 2010
Business software pros targeting start-ups
Business software pros are increasingly targeting start-ups with promising business plans in which to invest their time and expertise. A high profile Silicon Valley entrepreneur has shunned a return to the US in favour of becoming CEO of a Bristol-based business software company.
Salman Malik, a Siebel Systems veteran, has joined the board of BrightPearl, a fast-growing hosted business software venture, that was spun out of a skateboard company three years ago.
The 41 year old said after several years of making private investments in UK start-ups and helping them grow, he had grown frustrated by the limited number of world class internet opportunities in London and was preparing to return to California.
"I was getting a bit disenchanted for opportunities in the UK for people like me – software guys with a Silicon Valley background. There was nothing that struck me as particularly compelling. I was seriously considering going back to Silicon Valley," he said.
A call from Charles Grimsdale, co-founder of venture capital firm Eden Ventures, introducing BrightPearl made him change his plans.
BrightPearl is a hosted software company that sells an integrated accounting, CRM, order and stock management, eCommerce and help desk services for a monthly fee.
It was set up by Chris Tanner and Andrew Mulvenna as a spin out from Mr Tanner's existing long skateboard company, called Lush. Mr Tanner had written the software to run Lush because he lacked the budget to buy an expensive IT system.
In May, Eden invested £1m in BrightPearl alongside Notion Capital, the venture fund set up by MessageLabs co-founders Ben and Jos White.
Mr Malik said: "BrightPearl caught my attention with an outstanding product that addresses a fundamental problem for enterprises. Businesses, particularly growing ones, lose a lot of time and money trying to adopt and manage separate, stand-alone sales, support, order-entry, accounting and e-commerce applications. BrightPearl brings all these into one, well-thought-out system that helps businesses scale efficiently. Our mission now is to get the word out globally."
Mr Malik was an executive at Siebel Systems, the customer relationship management software company that was named the fastest growing company in the US in 1999 by Fortune magazine. It was acquired by Oracle for $5.8bn in 2005, when Mr Malik departed.
Prior to that he was part of the team that founded Firefly Network, an early web-based social media site that was acquired by Microsoft. Pakistan-born, he studied electronics engineering at Princeton University in the US.
Mr Malik said operating outside of London would benefit the business. "The clarity you can achieve by being outside the hubbub of London and Silicon Valley is significant. There's a fantastic focus on what you can achieve," he said.
Salman Malik, a Siebel Systems veteran, has joined the board of BrightPearl, a fast-growing hosted business software venture, that was spun out of a skateboard company three years ago.
The 41 year old said after several years of making private investments in UK start-ups and helping them grow, he had grown frustrated by the limited number of world class internet opportunities in London and was preparing to return to California.
"I was getting a bit disenchanted for opportunities in the UK for people like me – software guys with a Silicon Valley background. There was nothing that struck me as particularly compelling. I was seriously considering going back to Silicon Valley," he said.
A call from Charles Grimsdale, co-founder of venture capital firm Eden Ventures, introducing BrightPearl made him change his plans.
BrightPearl is a hosted software company that sells an integrated accounting, CRM, order and stock management, eCommerce and help desk services for a monthly fee.
It was set up by Chris Tanner and Andrew Mulvenna as a spin out from Mr Tanner's existing long skateboard company, called Lush. Mr Tanner had written the software to run Lush because he lacked the budget to buy an expensive IT system.
In May, Eden invested £1m in BrightPearl alongside Notion Capital, the venture fund set up by MessageLabs co-founders Ben and Jos White.
Mr Malik said: "BrightPearl caught my attention with an outstanding product that addresses a fundamental problem for enterprises. Businesses, particularly growing ones, lose a lot of time and money trying to adopt and manage separate, stand-alone sales, support, order-entry, accounting and e-commerce applications. BrightPearl brings all these into one, well-thought-out system that helps businesses scale efficiently. Our mission now is to get the word out globally."
Mr Malik was an executive at Siebel Systems, the customer relationship management software company that was named the fastest growing company in the US in 1999 by Fortune magazine. It was acquired by Oracle for $5.8bn in 2005, when Mr Malik departed.
Prior to that he was part of the team that founded Firefly Network, an early web-based social media site that was acquired by Microsoft. Pakistan-born, he studied electronics engineering at Princeton University in the US.
Mr Malik said operating outside of London would benefit the business. "The clarity you can achieve by being outside the hubbub of London and Silicon Valley is significant. There's a fantastic focus on what you can achieve," he said.
Wednesday, September 15, 2010
Choosing the Best Business Plan Software
Choosing the the most appropriate business plan software may be a challenging task. Just what are the characteristics that you should be looking out for?
The use of such business plan software to support you with all levels of creating a business plan has become a popular option over the last decade. While there are a variety of successful firms that create business plans, they are often a very expensive option when compared to using a simply piece of software. The problem is that as this type of software as become more popular, there are more potential options to choose from. Here are some quick tips to keep in mind when choosing your next piece of business plan software.
1. Industry Specific Templates
It is important to make sure that your business plan software has industry specific templates. These templates provide a variety of benefits. The first, and most obvious, is that you will have one or more templates to follow when you create your business plan. Second, you know before you purchase the software that it can provide a solution for your specific industry. Finally, these templates can be used during your planning sessions to ensure that you gather and analyze all of the data that you will need. This prevents you from needing to stop working on your plan to conduct additional research or analysis later.
2. Get Support
It is important to make sure that your software offers some form of support. You never know what might go wrong and there is nothing worse than getting almost done with your business plan, only to find out that there is a problem that you cannot fix. It doesn't matter how good the software is, you must be able to get additional help when you need it.
3. Plan Ahead
There are many different reasons that you may need to create a business plan and certain types of business plan software are designed to excel in certain areas. By knowing why you will be creating your business plan, you will be able to better research the products that would be the best fit.
4. Editing
Editing is an issue that many people overlook, however it can prove to create a lot of hassle in the long run. Some software allows you to do all of the editing within the software, while others will force you to export the data to some other software. If you need to export it, it is important to make sure that the complimentary software that is needed to do so.
5. Automation
Some pieces of software will use a lot of automation, while others will have almost none. There are a variety of different ways that automation can used ranging from auto-templates to performing complex equations. Make sure that your software does all of the automation that you want it to, and don't pay for additional automation that you either don't want or don't need.
By now you are hopefully a bit more clear on what to look out for. So whether you are looking for business finance, venture capital, angel finance or simply just to start your business with solid foundations. Choosing the right software should support you in doing so.
The use of such business plan software to support you with all levels of creating a business plan has become a popular option over the last decade. While there are a variety of successful firms that create business plans, they are often a very expensive option when compared to using a simply piece of software. The problem is that as this type of software as become more popular, there are more potential options to choose from. Here are some quick tips to keep in mind when choosing your next piece of business plan software.
1. Industry Specific Templates
It is important to make sure that your business plan software has industry specific templates. These templates provide a variety of benefits. The first, and most obvious, is that you will have one or more templates to follow when you create your business plan. Second, you know before you purchase the software that it can provide a solution for your specific industry. Finally, these templates can be used during your planning sessions to ensure that you gather and analyze all of the data that you will need. This prevents you from needing to stop working on your plan to conduct additional research or analysis later.
2. Get Support
It is important to make sure that your software offers some form of support. You never know what might go wrong and there is nothing worse than getting almost done with your business plan, only to find out that there is a problem that you cannot fix. It doesn't matter how good the software is, you must be able to get additional help when you need it.
3. Plan Ahead
There are many different reasons that you may need to create a business plan and certain types of business plan software are designed to excel in certain areas. By knowing why you will be creating your business plan, you will be able to better research the products that would be the best fit.
4. Editing
Editing is an issue that many people overlook, however it can prove to create a lot of hassle in the long run. Some software allows you to do all of the editing within the software, while others will force you to export the data to some other software. If you need to export it, it is important to make sure that the complimentary software that is needed to do so.
5. Automation
Some pieces of software will use a lot of automation, while others will have almost none. There are a variety of different ways that automation can used ranging from auto-templates to performing complex equations. Make sure that your software does all of the automation that you want it to, and don't pay for additional automation that you either don't want or don't need.
By now you are hopefully a bit more clear on what to look out for. So whether you are looking for business finance, venture capital, angel finance or simply just to start your business with solid foundations. Choosing the right software should support you in doing so.
Cloud software and your business
There may be a whole host of reasons why you choose cloud technologies for your business, whether its the flexibility of being able to work wherever you have access to the net, the afford ability of only paying for those services that you need, the security of being rest assured that even of your computer crashes, your data is safe, or simply having constant access to the latest version of a specific accounting software program or the latest in business planning software. Whatever your reason, Cloud computing is transforming the way we do business.
Whatever type of cloud service you are considering, cloud computing provides an opportunity to review and improve existing business processes and reinforce best practice.
Assessing service providers
Before implementing cloud computing in your business, you need to consider the following issues:
Data protection - how will you protect your data, and what measures has the service provider put in place to ensure that your data is secure? What level of responsibility will the service provider take for any data loss and what are your legal obligations for your data?
Business continuity - in the event of service downtime, a security breach or loss of data, how will your business continue to operate? What back-up systems do you have in place? What level of support and financial compensation will the service provider give in the event of an incident?
For more information, see the pages in this guide on data protection and cloud computing and business continuity and cloud computing.
When choosing a service provider you should also consider:
- what service availability guarantees can the provider give?
- what penalties and compensation will they incur if the service is interrupted?
- how much will the service cost and what are the options for upgrading or downgrading your service requirements?
- what are your legal obligations if you want to end the contract early - eg change providers?
- what level and types of support will your service provider offer?
Make sure your business is ready to work 'in the cloud'
To be able to work effectively 'in the cloud' your business needs a fast internet connection. Cloud computing works most effectively when you can upload as much data to the provider's servers as you download from them. SDSL (symmetric digital subscriber line) internet connections are preferable to ADSLs (asymmetric digital subscriber lines) as they support faster upload speeds.
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