6 Important Areas You Need To Know When Writing Effective Business Plans

Writing Business Plans

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While many small businesses tend to be quick in their dismissal of business plans, such plans are actually crucial for a business—both in terms of providing strategic direction and in terms of obtaining potential capital investment. Since business plans allow a company to put their best foot forward to all forms of stakeholders, they need to be carefully designed and should cover all necessary elements.

Luckily, writing a business plan does not require gargantuan effort—only certain attention to detail. Here are the elements you need to include when writing a business plan:

Executive Summary:

Since this is the first section of your business plan, it should be brief yet comprehensive. The executive summary section should be able to convey all necessary information about your business—a brief introduction and overview, the types of goods and services offered and a brief outline of potential challenges as well as the objectives of your business. Don’t go into too much detail though, since you’ll be covering all of these aspects later on in the document.

Objectives and Mission:

These should be stated in the least amount of words as possible. However, it is essential in this section to use powerful words that leave a greater impact upon the reader. Also, objectives and missions need to be formally stated. More importantly, however, you need to talk about how you plan on achieving this and the timeframe required to do so.

Segmentation:

When perusing your business plan, investors will look for details on your target market. They’ll want to know how you’ve segmented your customers, with respect to demographics, etc. So make sure you’ve done your homework before writing this section. Be clear and comprehensive. Including some charts or graphs at this point would be an excellent idea for they convey a host of information in an aesthetically visual manner.

Marketing Strategy:

This is one of the most crucial elements of a business plan. Once you’ve segmented your customer base, investors are interested in knowing how exactly you plan on reaching out to them and communicating with them. So talk about the 4 P’s of marketing (or 6P’s) as they apply to your business in detail.

Financial Plans:

This is what investors are really interested in. They want to know how well you’ve broken down your costs, and how efficiently you’re utilizing the operating cash that you do have at your disposal. For new businesses, profitability may be an issue for the first few years, so don’t be afraid if your business is facing losses at this point. What you should choose to emphasize on is how you aim to get your business out of the red.

The Team:

This is one of the most underrated elements of a business plan. If investors are interested in putting money in your business, they want to know whom they’re giving it to. And they want to know if the recipient is qualified and trustworthy enough to make the most of that money. So here’s your chance to boast about all relevant experience and honors that you’ve had.

While we’ve spelled out the basic elements of a business plan for you, there are other aspects that you need to consider too, while working on one. Firstly, the aesthetics—right down from the cover page to the last page. The cover page should be attractively designed. The font size of your business plan should be uniform, charts and graphs should be used where possible and the text must be properly aligned. Use bullet points and tables to break up complicated information. And then there are other structural considerations: the text must be edited properly—NO spelling and grammar mistakes, the tone must be formal yet simple to understand and repeating of information should be avoided.

Remember, writing a business plan isn’t as complicated as it seems once you get down to it. However, it does require some time and effort. But when you’re able to secure the necessary capital for your business, all those pains are suddenly worth it!

The Quick and Easy Guide to Creating an Online Presence for Your Business

Business Online Presence

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In the pre-Internet days, advertising for small businesses was too costly an endeavor. Most relied on word-of-mouth as a means of getting noticed by potential customers. Of course, there were the occasional flyers and catalogue displays as well. However, now in an age that is dominated by various forms of online media, creating an online buzz for your business is not only simpler than ever but also requires minimum financial investment.

So how do you create an online presence for your business?

Remember, creating an online presence is more of an integrated communications and marketing campaign rather than a one-off endeavor. This means that whenever you do decide to create an online presence for your company, you’ll need to make use of several mediums. In addition to this, information over the Internet needs to be constantly updated—to catch customers’ attention you need to engage with them, be attentive to their concerns and queries and achieve all this without being overly domineering. Most importantly, however, you need to provide them with the correct information—information that is not only accurate but is also sought after by your customers.

Creating an Online Presence: What Mediums can I use?

As mentioned previously, there are several platforms you can use online. It’s always better to use a combination of these rather than sticking to one or two alone. Here are your options:

•        Website: Although you’ll need to pay for this one, the costs of maintenance are relatively small. But the important thing to know is that your website is where your customers can get the most detailed information about your brand. Here’s where you get to show off. Boast about your achievements, your aims and your customer service. However, keep the design simple and uncluttered.

•          Facebook/Twitter: Social media usage rates are at an all-time high which makes them a feasible tool of marketing for all businesses. Such platforms must be regularly updated, both with information about your company and the replies to customer concerns. These are your primary modes of communication with your customers and make for an excellent feedback channel.

•      YouTube: Creating a YouTube account is often one of the most underrated aspects of online businesses. Agreed, it’s not as effective a communication tool as compared to social media, it does provide a great platform for you to get creative with respect to visual aspects of your marketing program. Not only does visual impact last longer, but rarely do customers complain while watching a well-made YouTube video.

•          Email: This one’s pretty straightforward. Use social media, website forms or face-to-face contact with customers to obtain their email addresses and market your business directly via emails delivered straight to the customer’s inbox. Remember not to spam though!

•           Google Ads: Google Ads are another cheap way of creating an online buzz. Since Google uses a targeted strategy for displaying ads, you might want to purchase a slot or two. This may help you find the right customer more easily than you think.

So there you are…online marketing simplified! With a few simple tools (and regular updates), you can now be well on your way towards business success.

Avoid the Headaches of Business Taxes

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Earning a great salary from a business you created is the dream that many of us have.  True, this career path can make money, but it’s not headache free.  Many who choose to start their own business are quick to fall into one of the many easy traps that having a small business can present.

Probably the most indiscreet trap is business taxes; a part of running your business that many prefer not to acknowledge.  Although filing taxes may seem like a daunting process, a little forethought and organization will quickly lead you past this nuisance of administration.

• Stay organized!

Make sure you have your accounts in order, and keep your receipts.  There is hardware and software available for scanning and keeping your receipts organized, so you will never have to deal with a box full of paper again!  Make sure that you keep the proper receipts.  Expenses can only be claimed if they are somehow related to you earning income from them, so not everything is a business expense!

• Go pro or DIY?

Depending on the amount of extra time you have, and how much you actually know about the taxation system, you could possibly save the money for an accountant and file your business taxes by yourself.  There is software and websites available for people like yourself, which are easy to use and give you the maximum amount of return possible.

• Be proactive and think ahead:

Since you have transitioned from a salary job to one where you are your own boss, you might have carried over some of your old habits (good and bad).  While previously your taxes were deducted from your paycheck, now you are directly responsible for making sure you have enough money put away to pay your taxes.  This could be a big problem, especially for smaller businesses.  The way to deal with this situation is discipline.  Treat every source of income from your business like it is a paycheck; take away a percentage equal to the tax payable from the amount and put it aside.  This way, you will already have the funds necessary to pay your taxes when the time comes.

• Avoid audits!

Don't do anything drastic or out of hand, and don't be greedy.  It will only come back to haunt you.  Business taxes are a prime candidate for audits.  If you are claiming business expenses, make sure you can prove that they were necessary to run your business.

Keep good books and have accurate statements showing how each penny was earned and where it was spent.

File your taxes on time, and don't wait until the week prior to start organizing your documents for submission.  Organize your documents early and often!

Business taxes might be a headache to solve, but with a little organization and by reducing the procrastination, you can easily get your taxes filed and finished without having to think about them ever again...that is, until next year!

The Importance Of Business Accounting For Your Business

Business Accounting

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Business accounting is a key function of a business that involves keeping track of various transactions being conducted on a daily basis. With efficient accounting, small businesses are able to gauge the net worth of the business and the profit realized on an annual or semi-annual basis. Small businesses usually tend to ignore bookkeeping practices and this ultimately impacts the ability of the entrepreneurs to accurately analyze the financial performance of the business and expand it across geographical boundaries.

Bookkeeping

At the core, accounting is bookkeeping where every transaction must be entered into the relevant journals and ledgers. Every transaction conducted by the company would result in dual impact on the system as a debit and a credit entry will be made. You can either opt for cash based accounting or accrual accounting whereby in the former, you will be required to report transactions based on inflow and outflow of cash and in the latter you will be required to report transactions based on the inflow and outflow of goods and services. Business accounting would also involve bank reconciliations whereby bank statements received are compared to the bank account maintained in the general journal.

Software for bookkeeping is easily available where entries are documented and updated automatically into the relevant ledgers accounts. The software will also allow the company to extract its balance, profit and loss, account and balance sheet at the year end to highlight any discrepancies.

Payroll System

Business accounting could also entail managing a payroll system as one of the greatest costs incurred by small businesses is that of human resources. The payroll system usually involves a list of employees whereby specifying the wage rate per hour or per piece will produce the wages of the employees. Salaried employees are also managed by the payroll system whereas tax deductions made by the employer are also accounted for.

Taxation

Every business incurs a tax liability based on profits realized and this needs to be paid on an annual basis. The tax is computed on the basis of taxable profit that is different from accounting profit due to different assumptions placed by taxation authorities and accountants. Furthermore, quarterly taxes are also required to be submitted to relevant authorities and these include sales and payroll tax returns.

Hiring an Accountant

Keeping track of accounts requires specialized skills and an entrepreneur might not have the necessary skills for maintaining accounts or might not find the time to keep record of every transaction conducted. Small businesses usually feel that hiring an accountant does not add value to the business and rather creates an extra cost to the business. However, hiring an accountant would allow the sole proprietor or partnership to maintain efficient business accounting and effectively reduce the chances of errors. Small businesses can hire accountants on a part time basis and therefore reduce the cost of an accountant while also ensuring proper bookkeeping.