WE'VE MOVED!
We are proud to announce our NEW community destination. Engage with resident experts and fellow entrepreneurs, and learn everything you need to start your business. Check out the new home of StartupNation Community at startupnation.mn.co
We are proud to announce our NEW community destination. Engage with resident experts and fellow entrepreneurs, and learn everything you need to start your business. Check out the new home of StartupNation Community at startupnation.mn.co
Options
Business plan help
EdgEvent
subscriber Posts: 10
So i`ve been working on a formal business plan for my company for a while now and the part i keep getting stuck at is with the financial projection. My company is home based and a service company so i have very little overhead. In fact i`ve saved enough money to cover all my start up costs so i can be basically debt free with the beginning of the company. But i have not yet started building a stable client base so i have no idea what kind of revenue i might bring in. I feel like my projections are just random hopeful numbers based on what i want to make and not realistically what i could make. Depending on the size of the event and how many i do per month, my income will vary greatly. I know my start up costs and what i will need to break even from month to month, but how do you project your future earnings when it could be so random? It`s totally dependant on how many clients i can get and the size of their budgets. But i won`t know that until i actually start implementing some marketing plans and try to attract clients...and i didn`t plan to do that until i had a solid biz plan ready. It`s a vicious cycle.
I found a template for a biz plan that i`m working off of and it has all kinds of charts for sales growth ratios, projected balance sheets, profit and loss summaries and break even analyses. I don`t even know what these are for. Are all of these things really needed for my business plan? Who should i get to help me understand all this stuff? Where can you find stats on the growth of a particular field (for me it`s event planning) and they amount people and companies spend on it? How can i make my projections more realistic?
Thanks!
I found a template for a biz plan that i`m working off of and it has all kinds of charts for sales growth ratios, projected balance sheets, profit and loss summaries and break even analyses. I don`t even know what these are for. Are all of these things really needed for my business plan? Who should i get to help me understand all this stuff? Where can you find stats on the growth of a particular field (for me it`s event planning) and they amount people and companies spend on it? How can i make my projections more realistic?
Thanks!
Sign In or Register to comment.
Comments
Average event size and budget
Rate of growth over the past few years & projected growth for 2008
Thanks.
It`s always great to hear when someone can start a business without going into debt! One of the best reasons to start a service business if one can, IMHO!
You might be able to get some basic income information from others in your field. If the national organizations for your business won`t share their research with you as a non-member, consider two things. First, become a member. Second, contact someone else who IS a member and explain your situation. If you are concerned that they will see you as competition, find someone in a different part of the country. It has been my experience though, that you`ll often find the "competition" more helpful that you expect.
Good luck!
Honestly, it can be really difficult to find info to support financial projections for some businesses. I`ve found this since I went to school and got my degree in entrepreneurship and have done some work starting businesses. In reality some of your financial projections may just be educated guesses. They aren`t going to be right on and no one is expecting them to be perfect. Look at it as more of a guideline of what you think you can realistically achive and also as something you can stive to beat.
Like KevDev said, the `competition` can be very helpful. You`ll be surpised how much info other entrepreneurs are willing to give you sometimes.
Also, a good rule to remember: Always be a little bit conservative and look the things from your customer`s perspective.
Since you aren`t going out for loans or capital, this is more for your own purposes than anything. Don`t worry about projecting every single financial number. I`d stick with the P&L and that`s it for now, and cash flow.
As for being random guesses... welcome to the world of financial projections. It`s a bit of a crystal ball act. You base it on as much data and fact as you can, but ultimately you are trying to predict an uncertain future. The purpose isn`t to hit numbers dead on, but at least give you a frame of reference of how things will shape up given X, Y, Z factors.
Good luck on it!
Chris
I have a fair bit of experience in this field but tend to think there is no one right way to do things.
However, there are a few tips that may help...
Firstly, consider who the business plan is for. If you need to raise money from private investors (either individuals or institutions) then they will want to see financial projections that are robust and achievable - based on clear, stated assumptions. However, if this business is just about you then you need to think about yourself first and foremost. Think in terms of a personal survival budget for the tough early months of the business as well as contingencies such as part-time work.
Secondly, in terms of content, there are some that love high volumes of graphs, charts, analytics and so on. And by all means include these if that floats your boat, or impresses your target investors. However, the KISS principle is really important here. For me, all business plan content should come under the headings: The People - The Project - The Market - The Money. And each section should be succinct, enough detail to cover the key issues but not so wordy is to get boring or difficult to follow.
Thirdly, be really clear on your business model: exactly how does this business make money? If you can really answer that then you are 90% of the way there. You need to be robust and even harsh in your thinking. People will buy in to your enthusiasm but not wishful thinking. We use a technique called `Making Strategy` (http://www.eriskay-associates.co.uk/mstrategy.html) to generate clear business models. With a bit of work, you can come up with something that is clear, easy to follow, but sufficiently detailed to prove hard to emulate - the basis of a competitive business.
Hope this gives you some ideas - good luck with the plan and the business.
Best wishes,
Mark.
From what I could gather from your post, it seems that your new business is going to be a service biz run from your home (event planning, party planning?). If you already have your start up costs covered (good for you!) and you are not looking for additional funding with loans, then you may be making the business plan a little too formal and too complicated.
If the business plan is going to be for your own road map, then you don`t need to agonize over the financials. Of course you want to have a good idea of your projected revenue and your break even timeline and your monthly cash flow before diving in. But if you are not seeking funding with your business plan, then you can keep the financials very basic. Assume you will only have 1 or 2 clients per month for the first 3 months or so. Start with worse case scenarios and complete your assumptions first. From the assumptions you can generate a cash flow statement.
The business plan will be ever evolving anyway. You will tweak it as you go so you don`t need to worry about being precise.
On the other hand, if you are looking for funding, then yes, your financial statements must be pretty accurate. The advice I just gave here is strictly for business plans that are not being used to secure additional funding.
You can look here for more detail regarding business plans:
http://www.smallbusinessstartup.biz/plan/
Don`t wait...start trying out some marketing plans. Get your first couple of jobs while you work on your business plans. Two reasons:
1. You`ll gather information as you go. So you`ll start to work out what you need in your business plan and what you don`t
2. You`ll already be on the road to making money.
In regard to your business plan. Who is it for?
If it`s for finance, ring someone in the department that is going to be going through your plan, tell them that you`re putting a plan together and ask them directly:
what do they want
can they tell you why (this way you have a better understanding of WHY they want it, and therefore HOW to include it
This approach works well with any plans that are for someone else. Ask the appropriate department or person what they want. Then adapt an existing plan format (there`s lots on the web) or develop your own that suits the purpose.
If it`s for yourself, generate a plan that works for you...and that may mean starting with the bare bones you THINK you`ll need now and build it as you go along.
Planning is valuable, but it shouldn`t stop you getting on with your primary aim...business.
Good luck
I was a lucky one who had someone who would do this for me, and it helped me do my projections in a major way. Not just for expenses, but income as well. Had I been in the same area as them I don`t believe they would have, but sense I`m not, they were very helpful.smokehouse7/22/2008 3:51 PM