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September 2011 Archives

Here are some quotations to motivate and inspire the planning and development of your business:

    • Rise early, work hard, strike oil. (J Paul Getty)
    • The person who doesn't scatter the morning dew will not comb grey hairs (Irish proverb)
    • A chicken doesn't stop scratching just because worms are scarce (Grandma's Axiom)
    • A wise man turns chance into good fortune. (Thomas Fuller. Gnomologia, 1732)
    • A great fortune depends on luck, a small one on diligence. (Chinese proverb)
    • Luck is a dividend of sweat. The more you sweat, the luckier you get (Ray Kroc)
    • I'm a great believer in luck and I find the harder I work, the more I have of it. (Stephen Leacock)
    • Success is more attitude than aptitude. (Anonymous)
    • If, at first, you don't succeed, try again. (Proverb)
    • If, at first, you do succeed, try to hide your astonishment.(Los Angeles Times Syndicate)
    • There is nothing more difficult...than to take the lead in the introduction of a new order of things. (Niccolo Machiavelli)
    • If you want truly to understand something, try to change it. (Kurt Lewin)
    • Do not follow where the path may lead. Go instead where there is no path and leave a trail. (Ralph Waldo Emerson)
    • You cannot travel on the path until you become the path itself. (Gantana Bouddha)
    • There is no top. There are always further heights to reach. (Jascha Heifetz)
    • For the wise man looks into space and he knows there is no limited dimensions. (Lao-tse)
    • It is not best that we should all think alike; it is a difference of opinion that makes horse races. (Mark Twain)
    • It's not because things are difficult that we dare not venture. It's because we dare not venture that they are difficult. (Seneca)
    • It is a myth, not a mandate, a fable not a logic, and symbol rather than a reason by which men are moved. (Irwin Edman)
    • Great spirits have always encountered violent opposition from mediocre minds. (Albert Einstein)
    • Every wall is a door. (Ralph Waldo Emerson)

For more quotations see this list and look here for lots of bad advice and decisons !  

Cash is a business's life blood and every manager's primary task is to help keep it flowing and to use this cash flow to generate profits. If a business is operating profitably, then it should, in theory, generate cash surpluses. The faster a business expands, the more cash it will need for working capital and investment.

The cheapest and best sources of cash exist as working capital right within business. Good management of working capital will generate cash will help improve profits and reduce risks.

There are two elements in the business cycle that absorb cash - Inventory (stocks and work-in-progress) and Receivables (debtors owing you money). The main sources of cash are Payables (your creditors) and Equity and Loans.

Cash flow can be significantly enhanced if the receivables are collected faster. Every business needs to know.... who owes them money.... how much is owed.... how long it is owing.... for what it is owed.

Management of payables is just as important as the management of receivables. It is important to look after your creditors - slow payment by you may create ill-feeling and can signal that your company is inefficient (or in trouble!).

Managing inventory is a juggling act. Excessive stocks can place a heavy burden on the cash resources of a business. Insufficient stocks can result in lost sales, delays for customers etc.

When planning the development of a business, it is critical that the impact of working capital be fully assessed when making cashflow forecasts. Our financial planning software packages - Exl-Plan and Cashflow Plan - can facilitate this task as they provide for the setting of targets for receivables, payables and inventory.

See also the Checklist for Improving Cashflow.

So, you have a solid idea for a business and you are wondering how to turn it into a real business.

Try following these steps:

  1. Clarify your business idea in terms of what you will offer customers. See getting new business ideas.

  2. Conduct market analysis and research (desk and/or field). See profiling target markets.

  3. Refine your business idea and flesh it out so that you can prepare a relatively comprehensive description and market positioning statement (as regards price, features etc.). See product/service descriptions.

  4. Compile a short strategic plan to give you an overview of your idea from a "total" business perspective. See developing a strategic plan and online strategic planner.

  5. Write a business plan with projections AND include an action plan. This plan can range from an eight-page informal document (for your eyes only) to a 40-plan comprehensive plan (for raising external finance etc.). See how to write a business plan and get insights into a business plan. For projections, look into using financial projection software

  6. Use your plans to help mobilise resources. These could cover pilot operations, raising finance, prototyping, R&D, creating networks, recruiting staff, locating premises/equipment and so on.

  7. Update your business plan and related action plan (especially if #6 takes time).

  8. Start executing your business and action plans.

  9. Revise your action plan and key financial projections (especially short/medium term cashflow forecasts) in light of initial results.

 

 

Length of a Business Plan

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What is the ideal page length of a business plan? Well, what is the length of a piece of string? The answer really depends on the purpose and scope of the plan - are we talking about a basic or comprehensive plan.

Analysis of findings from an ongoing survey about business plans by PlanWare indicates that the main parts (i.e. the body of plan excluding appendices etc.) of many basic plans are under ten pages long whereas comprehensive plans are often 10-25 pages long. More specifically, the analysis found that almost half of all comprehensive plans were at least 26 pages long as compared with just one-tenth of basic plans (see Fig 3 below).

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When budgeting your plan's length, go for the shortest possible plan consistent with your business's scale, objective of the plan etc. - aim for quality rather than quantity! Bear in mind that the overall length of the plan is likely to increase as writing progresses. If your plan gets too long, do some ruthless editing and redrafting. If it is any consolation, it should be much easier to shorten a long plan than to lengthen a short one!

Based on the suggested section lengths in our Business Plan Guide, the length of a comprehensive plan could range between 27 to 47 pages (excluding cover, contents list and appendices). This works out at a minimum of about two pages for each main section within the plan. Obviously, this length should be scaled back to about ten pages or so for a new or established business (of almost any size) preparing a basic plan by excluding sections and scaling back the length of remaining sections.

About this Archive

This page is an archive of entries from September 2011 listed from newest to oldest.

August 2011 is the previous archive.

October 2011 is the next archive.

Find recent content on the main index or look in the archives to find all content.

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