Many people have dreams of eventually starting up their own company one
day. The idea of being your own boss for a job of your dreams is one of the reasons why many people decide to follow this path, but what may start out as a dream may turn up being a financial disaster if you don’t budget your money.
With every story of success, there are five stories of financial disaster of businesses that didn’t work out. Many of the financial hardships that people experience while starting up their own company can be avoided by using a simple budget when planning on money you will need to spend.
One of the most important things to do before starting your own business is to research the market you are interested in getting into. The failure of most new businesses can most commonly be contributed to the owner not doing enough research about the market they are going to enter.
You need to carefully analyze the market you are trying to enter and figure out who are the main businesses’ in it and how you will compare. You must use realistic standards when doing this; you can’t expect as a new business owner that you are going to make a profit during your first year.
With that you have to take into effect that in reality you may not make a profit your first year, and for most new company’s backup funds are essential to continuing the new business.
You also have to ask yourself what you want to get out of your new business, in order to do this you not only have to make short-term goals but also long term goals. Making a budget for short-term and long-term goals will allow you to see your future spending in a big picture.
Besides having backup funds you have to have enough money to get your new business rolling. Many people underestimate the amount of money a new business needs, they do this by overlooking costs they may need. For example if you are purchasing items for a retail store you may forget that you need clothes hangers to hang the clothes in the store.
Many people focus their budget on immediate needs such as inventory and forget the smaller things that may become costly. It is imperative that new business owners have money stored somewhere as a backup for unexpected costs.
New business owners are also known to spend money on things that are unnecessary. Of course you want your new business area to be georgous, with new desks for employees and a new building, but you have to ask yourself if it is really necessary.
Is it absolutely necessary that I am in a new building with new things? If it isn’t you may want to look into different areas to start up, sometimes the best place to start up a new company is in your very own home.
Monday, November 17, 2008
Friday, November 14, 2008
Am I Self-employed Material?
What It Takes To Run Your Own Business
Employee vs. business owner, it’s a scary dream for most, but attainable.
If you are seriously looking to become self-employed there are a few factors you should consider before taking the leap.
Ask yourself these questions:
· Do I have the long term drive to make my business a success
· Will my values be met by the business I want to build
· Do I know the legal and tax laws required for being self-employed
· If I don’t know how to do something, can I find a career coach
or other help
· Do I have a plan
· Do I need a partner
· Can I continue to pay my bills while I get my business up and running
· What do I know about marketing my business
· Are the products or services I plan to offer wanted by the public and
are people willing to pay me for them
SELF-EMPLOYED IN A BETTER INDUSTRY
Kris was a college-level teacher and now in her 50’s has made a decision to incorporate her interest in writing into a livelier, fun-in-the-sun environment. Searching and not finding employment locally, she is now revamping her resume to highlight transferable skills and looking for freelance work in the islands.
Her Vermont apartment is tiny, and easy to maintain while she’s away in her new career. Her new self-employed goal is to teach journaling workshops at various resorts and spas. Because of her love for islands, she is narrowing her search to destination resorts on islands only. She can expand her possibilities and think outside the box by asking what else could she do with her writing skills.
She could expand her own business by offering to teach guests how to write a short play and then performing it during their vacation stay. Or, she could freelance her writing excellence into marketing vacation spots for host companies. She could even write and sell how-to books for other budding writers. Her list of possibilities is endless in a changing market and yours can be too. Just highlight your best skills and take them into an industry you find exciting.
SELF-EMPLOYED WITH A BUSINESS PARTNER
Another woman, Charlotte, from Pennsylvania, is finding the doors to her human resource expertise closing around her. How might she re-traffic her skills and abilities into a new market? She has a stellar background in planning, preparation and all behind-the-scenes work. Not particularly interested in being the front-woman for a company, she can now take her work history and switch gears slightly by becoming a wedding planner, or a consultant for the convention industry.
When asked if she likes meeting and greeting people, her answer was a quick, “No!” So maybe a wedding planner wouldn’t be the best choice for her. Knowing that she is more comfortable behind the scenes, she can now transfer her skills into an environment that needs what she has to offer, and although it may be a different industry, she will still be able to use her gifts well. If you are considering becoming self-employed, do like charlotte did and know whether you are best suited on the front line or behind the scenes. This is a perfect example of the need for a business partner who is better suited with public contact.
SELF EMPLOYED, BUT A MISMATCH OF VALUES
Kevin Manley started out his professional career as an entrepreneur. He formed his own band and toured the United States. He had natural skills in musical talent, stage presence and organization, perfect skills for someone who wants to build a band. To succeed, he says, “You must first have natural musical abilities, a love of center stage and awareness that receiving applause and admiration can be like a drug you will always chase.” When I asked him why he is no longer self-employed in the music industry he explained, “I knew that I needed a home base and really got tired of the traveling.
One day I was putting everything I owned into the trunk of a car, getting ready for our next gig, and realized I had forgotten where I was. I didn’t even know which coast I was on.” Today Kevin is employed as a Public Works Director for a town in Arizona and continues to sing karaoke in Laughlin, Nevada occasionally. He says it’s hard to let go of the rush that audience applause provides, but if your most important value is a regular home life, then business is not for you. If you want to develop your own business, use Kevin’s awareness as a role model and make sure your values match your business.
SELF-EMPLOYED, FIND A PROBLEM, PROVIDE A SOLUTION
Kate Cronan Sawert has made a career out of her interest in the health field. She is now self-employed in the same industry. She says she was disheartened by the American health care system and quickly began planning her own business. She truly believes that the only way she can make a quality difference is by becoming self-employed.
Today she has formed her own company, Self Health, Inc. that provides health education and wellness information to the general public. Her book, Self Health, is in the final stages of production and offers insight into what is causing your energy drains and strategies for healing them. What satisfies her most is the excitement on the face of her clients when they learn that anything is possible regarding their health.
Kate knows that with her own business she can be more problem/solution oriented in her care. She advises anyone considering the option of running his or her own business to be skilled in willingness, tenacity and to have the ability to ask for help. For Kate, her Life’s Work was built around what a problem in her industry. Because health education has become more integrative in the last twenty years, this entrepreneur has found a cutting edge position for her talents, skills and values in her own business. If you want to start your own business, use Katie as a role model; find a problem and provide a solution.
If after careful evaluation of what it takes to operate your own successful business you find that this is the path for you, learn as much as you can from others who have gone before you and here’s to your career success!
Employee vs. business owner, it’s a scary dream for most, but attainable.
If you are seriously looking to become self-employed there are a few factors you should consider before taking the leap.
Ask yourself these questions:
· Do I have the long term drive to make my business a success
· Will my values be met by the business I want to build
· Do I know the legal and tax laws required for being self-employed
· If I don’t know how to do something, can I find a career coach
or other help
· Do I have a plan
· Do I need a partner
· Can I continue to pay my bills while I get my business up and running
· What do I know about marketing my business
· Are the products or services I plan to offer wanted by the public and
are people willing to pay me for them
SELF-EMPLOYED IN A BETTER INDUSTRY
Kris was a college-level teacher and now in her 50’s has made a decision to incorporate her interest in writing into a livelier, fun-in-the-sun environment. Searching and not finding employment locally, she is now revamping her resume to highlight transferable skills and looking for freelance work in the islands.
Her Vermont apartment is tiny, and easy to maintain while she’s away in her new career. Her new self-employed goal is to teach journaling workshops at various resorts and spas. Because of her love for islands, she is narrowing her search to destination resorts on islands only. She can expand her possibilities and think outside the box by asking what else could she do with her writing skills.
She could expand her own business by offering to teach guests how to write a short play and then performing it during their vacation stay. Or, she could freelance her writing excellence into marketing vacation spots for host companies. She could even write and sell how-to books for other budding writers. Her list of possibilities is endless in a changing market and yours can be too. Just highlight your best skills and take them into an industry you find exciting.
SELF-EMPLOYED WITH A BUSINESS PARTNER
Another woman, Charlotte, from Pennsylvania, is finding the doors to her human resource expertise closing around her. How might she re-traffic her skills and abilities into a new market? She has a stellar background in planning, preparation and all behind-the-scenes work. Not particularly interested in being the front-woman for a company, she can now take her work history and switch gears slightly by becoming a wedding planner, or a consultant for the convention industry.
When asked if she likes meeting and greeting people, her answer was a quick, “No!” So maybe a wedding planner wouldn’t be the best choice for her. Knowing that she is more comfortable behind the scenes, she can now transfer her skills into an environment that needs what she has to offer, and although it may be a different industry, she will still be able to use her gifts well. If you are considering becoming self-employed, do like charlotte did and know whether you are best suited on the front line or behind the scenes. This is a perfect example of the need for a business partner who is better suited with public contact.
SELF EMPLOYED, BUT A MISMATCH OF VALUES
Kevin Manley started out his professional career as an entrepreneur. He formed his own band and toured the United States. He had natural skills in musical talent, stage presence and organization, perfect skills for someone who wants to build a band. To succeed, he says, “You must first have natural musical abilities, a love of center stage and awareness that receiving applause and admiration can be like a drug you will always chase.” When I asked him why he is no longer self-employed in the music industry he explained, “I knew that I needed a home base and really got tired of the traveling.
One day I was putting everything I owned into the trunk of a car, getting ready for our next gig, and realized I had forgotten where I was. I didn’t even know which coast I was on.” Today Kevin is employed as a Public Works Director for a town in Arizona and continues to sing karaoke in Laughlin, Nevada occasionally. He says it’s hard to let go of the rush that audience applause provides, but if your most important value is a regular home life, then business is not for you. If you want to develop your own business, use Kevin’s awareness as a role model and make sure your values match your business.
SELF-EMPLOYED, FIND A PROBLEM, PROVIDE A SOLUTION
Kate Cronan Sawert has made a career out of her interest in the health field. She is now self-employed in the same industry. She says she was disheartened by the American health care system and quickly began planning her own business. She truly believes that the only way she can make a quality difference is by becoming self-employed.
Today she has formed her own company, Self Health, Inc. that provides health education and wellness information to the general public. Her book, Self Health, is in the final stages of production and offers insight into what is causing your energy drains and strategies for healing them. What satisfies her most is the excitement on the face of her clients when they learn that anything is possible regarding their health.
Kate knows that with her own business she can be more problem/solution oriented in her care. She advises anyone considering the option of running his or her own business to be skilled in willingness, tenacity and to have the ability to ask for help. For Kate, her Life’s Work was built around what a problem in her industry. Because health education has become more integrative in the last twenty years, this entrepreneur has found a cutting edge position for her talents, skills and values in her own business. If you want to start your own business, use Katie as a role model; find a problem and provide a solution.
If after careful evaluation of what it takes to operate your own successful business you find that this is the path for you, learn as much as you can from others who have gone before you and here’s to your career success!
Got An Idea, What Do You Do Next?
So you've got an idea. Join the mysterious world of idea makers, dreamers and wishful thinkers because that's where you are. You are in the twilight zone, a place where ideas never take shape, a place where sweeping changes never sees daylight because they are swept under the proverbial carpet where they lie waiting for an achiever to bring them to life.
Is your idea marketable?
A simple fact of life is, the most brilliant of ideas are nothing more than just that, ideas, until someone with vision turns them into marketable products. Let's face it, the world is full of products that never get to first base, but those products that do make it to the marketplace can make their creator very rich.
With the right idea you can change people's lives for the better. Look at Bill Gates, his vision changed the way the world communicates. Thomas Alva Edison brought the country electricity and started an started the industrial revolution. Robert Abplanalp turned the aerosol can into a household fixture. Robert Adler is credited as co-inventor of the television remote control with fellow engineer Eugene Polley. These and many other industrious inventors were instrumental in how we live today.
Put your idea to the test.
Having a great idea may be brilliant to you but it is worthless without proper documentation that testifies as to when you came up with the idea for your discovery. You must keep an inventor's journal, dated and signed by a witness, where you have written everything that relates to your invention; from first conception and probabilities to a well thought out marketing strategy. This will assure all segments and descriptions are well defined throughout the research and development process as will as presentation for patent. .
Get a Patent.
It doesn't make any difference if you want to manufacture and market your creation or sell licensing rights to someone else, you must first protect your idea by filing a patent with the U.S. Patent and Trademark office. By doing this you are guaranteed no one will steal your creation because all rights to it are exclusively yours.
Do a Patent search.
Before you spend a lot of time and money building a prototype of your product, it is imperative you make a search to see if it already exist. Do a patent search at internet to make sure no one holds a patent for the product.
Is there a need for your product?
You should also check to see if there is a need for your product, is it marketable? Define your target market and do some research to see if people will actually buy it. Once you have defined your market, be sure it is cost effective to be manufactured and distributed. Be sure your unit price is within fair market value limits by comparing your prices with similar products already on the market
Make a Prototype.
Once you have determined that your product is marketable, you will need to make or contract someone to make a prototype. A prototype is simply a working model of your Inventor's Journal account. This is necessary to present to the Patent Office along with any and all documentation. It also serves as a sales tool to present to potential manufacturers as well as distributors and licensees.
Is your idea marketable?
A simple fact of life is, the most brilliant of ideas are nothing more than just that, ideas, until someone with vision turns them into marketable products. Let's face it, the world is full of products that never get to first base, but those products that do make it to the marketplace can make their creator very rich.
With the right idea you can change people's lives for the better. Look at Bill Gates, his vision changed the way the world communicates. Thomas Alva Edison brought the country electricity and started an started the industrial revolution. Robert Abplanalp turned the aerosol can into a household fixture. Robert Adler is credited as co-inventor of the television remote control with fellow engineer Eugene Polley. These and many other industrious inventors were instrumental in how we live today.
Put your idea to the test.
Having a great idea may be brilliant to you but it is worthless without proper documentation that testifies as to when you came up with the idea for your discovery. You must keep an inventor's journal, dated and signed by a witness, where you have written everything that relates to your invention; from first conception and probabilities to a well thought out marketing strategy. This will assure all segments and descriptions are well defined throughout the research and development process as will as presentation for patent. .
Get a Patent.
It doesn't make any difference if you want to manufacture and market your creation or sell licensing rights to someone else, you must first protect your idea by filing a patent with the U.S. Patent and Trademark office. By doing this you are guaranteed no one will steal your creation because all rights to it are exclusively yours.
Do a Patent search.
Before you spend a lot of time and money building a prototype of your product, it is imperative you make a search to see if it already exist. Do a patent search at internet to make sure no one holds a patent for the product.
Is there a need for your product?
You should also check to see if there is a need for your product, is it marketable? Define your target market and do some research to see if people will actually buy it. Once you have defined your market, be sure it is cost effective to be manufactured and distributed. Be sure your unit price is within fair market value limits by comparing your prices with similar products already on the market
Make a Prototype.
Once you have determined that your product is marketable, you will need to make or contract someone to make a prototype. A prototype is simply a working model of your Inventor's Journal account. This is necessary to present to the Patent Office along with any and all documentation. It also serves as a sales tool to present to potential manufacturers as well as distributors and licensees.
Sunday, November 9, 2008
Do I Deserve To Be Successful?
Many factors can come in to play in regards to attaining success. The factors that are known to all but guarantee success are few and very specific, but the number of issues that can delay, deter, and even prevent success from entering into your experience are limitless.
They can be our personal issues, or they can develop from an external source. But regardless of where they derive from, our reaction towards those problems is what will be the deciding factor for each one of us.
What are the factors that deter your success? Time, money, education, self esteem? Are you waiting for the perfect opportunity? The perfect set of circumstances to be in play so you can give everything into making something happen? How’s that been working out for you so far? I will tell you right now, the circumstances will never be perfect.
You will never have enough time. Why? Because you don’t have those things right now. And that is the cause of the actions you have taken up to this point. It’s the cause of the thoughts you have held up to this point. As long as you insist on operating under the same set of guidelines for your life, you will continue to reap the same rewards.
It’s time for you to understand that the life situation that you so crave is just waiting for you to claim it. You have to believe that you deserve success. That success is your birthright and nothing will ever get in your way or stop you from reaching the level of achievement that you set before yourself.
Remove all doubt. Remove all fear. Replace all those negative thoughts with a positive knowing that you are in charge of the direction your life takes. And then go out and do it. With all you heart. No doubt. No Fear. All happiness, because you know. Happy journeys my friends.
They can be our personal issues, or they can develop from an external source. But regardless of where they derive from, our reaction towards those problems is what will be the deciding factor for each one of us.
What are the factors that deter your success? Time, money, education, self esteem? Are you waiting for the perfect opportunity? The perfect set of circumstances to be in play so you can give everything into making something happen? How’s that been working out for you so far? I will tell you right now, the circumstances will never be perfect.
You will never have enough time. Why? Because you don’t have those things right now. And that is the cause of the actions you have taken up to this point. It’s the cause of the thoughts you have held up to this point. As long as you insist on operating under the same set of guidelines for your life, you will continue to reap the same rewards.
It’s time for you to understand that the life situation that you so crave is just waiting for you to claim it. You have to believe that you deserve success. That success is your birthright and nothing will ever get in your way or stop you from reaching the level of achievement that you set before yourself.
Remove all doubt. Remove all fear. Replace all those negative thoughts with a positive knowing that you are in charge of the direction your life takes. And then go out and do it. With all you heart. No doubt. No Fear. All happiness, because you know. Happy journeys my friends.
Monday, November 3, 2008
12 Deadly Principles Of Business Planning. You Must Know These
Whether you are running, or planning to run, an offline or online business the traditional basics of achieving business success apply. For instance, it is well-known that a business that has no plan is almost certain to fail. No matter how small a business is, it needs a plan.
A business plan compels you to think before you act. It compels you to find out about your business area before you start; i.e. to research your business area or to establish its groundwork.
A business plan forces you to think hard about your competition and how you are going to beat them in the market. It forces you to establish whether your business idea is worth pursuing. Why start a business that is going to fail? Isn't that stupid?
A business plan forces you to establish the expected costs and revenues of your business, and hence to determine profitability. Why run a business when, at any time, you cannot tell whether or not the business is succeeding? If you don't know your costs or your revenues you cannot compare them together to tell whether your business is succeeding or failing.
An online business is no different from an offline business, when it comes to business planning. It needs a business plan! Yet, how many newcomers do we see trying to make it online without even understanding the concept of business planning? Is it then a surprise that too many fail?
This article discusses 12 fundamental principles that you must understand and use in your business planning if you are going to run a successful business. The principles are as follows...
1. The Requirements Principle
A business plan must comply with the requirements of funding bodies. This is particularly key when you are applying for funding, but is also necessary when you are not applying because the compliance act itself makes the business plan rigorous.
Funding bodies always have requirements that a plan must meet, and some of these are: technological innovation, presence of technical risk, and presence of commercial potential.
2. The Objectives Principle
A business plan must have clearly defined objectives and it must accomplish those objectives. A business plan is a strategic business document, and fundamental to any strategic planning process is the need to have objectives which the formulated strategies must aim to accomplish.
3. The Motivation Principle
A business plan must have clear motivations which highlight its importance. The motivations of a business plan are the reasons for completing the plan. These reasons tell us why the plan is important.
4. The Background Principle
A business plan must be the work of someone with a relevant background (the founder, for a start-up business), and the plan must comply with its author’s background. A business plan should be prepared by the person or team who is going to run the business. For a start-up business, this is critical because the planning process prepares the owner for running the business.
If the planning is delegated to someone else then it is unlikely that the owner will understand the plan sufficiently to be able to implement it. In these circumstances, the owner abandons the plan and does his or her own thing with deleterious consequences for the business.
5. The Detail Principle
A business plan must be sufficiently detailed to inspire confident action when executing the business; yet it must be flexible. A detailed plan is easier to implement than a superficial plan. A detailed plan suggests that the plan has been thoroughly researched and thought over. Detail inspires confidence in the owner of the business (assuming that he or she prepared the plan). A detailed plan should be flexible to accommodate changing times.
6. The Conservatism Principle
A business plan must be conservative. This means that it must always underestimate revenues while overestimating expenses. The reasons for this are underpinned by risk. A business is always executed under uncertainty... we never have all the knowledge we would like to make business success certain.
An immediate consequence of this is the tendency to underestimate cost, only to find that we run out of money at critical times of a business's execution. We also have a natural propensity to overestimate revenues... to dream!
7. The Cash Balance Principle
A business plan must always have a positive cash balance. A negative cash balance means that you plan to run out of money... to be insolvent! If you cannot realistically get the cash balance positive, without padding figures, then this is a sign that the business idea is not worth pursuing.
8. The Insolvency Principle
A business plan must guarantee against insolvency... against running out of cash. There are four ways to do this: conservative estimates so that the business always outperforms its plans, detailed cost identification to minimise omitted costs, contingency planning to accommodate forgotten items, and a positive cash balance throughout the plan.
9. The Risk Management Principle
A business plan must manage risks by convincingly dealing with uncertainty, reducing it to as close to zero as possible. This is simply stating that a business plan must be thoroughly researched, including desk research and field research. The more thoroughly a plan is researched the more it rests on sound facts, knowledge, and understanding, and the less the uncertainty and risk associated with the plan.
10. The Evidence Principle
A business plan must rest on supporting evidence, and guess work must be minimised. Sound evidence increases the reliability of a business plan and reduces the risk associated with it. And the less risky a plan is the more likely it will guide a business to success.
11. The Rigour Principle
A business plan must be rigorous – complete, correct, and reliable. This means that the plan must be derived from a systematic process that attends to all the issues that must be addressed. In particular, the plan must not be rushed. The issues must be sequenced and dealt with, each at the right time.
12. The Collaboration Principle
A business plan must be founded on collaboration (not confrontation) – it must satisfy the collaboration principle. This means that a business plan must be based on the works of others. It must not be opinionated. It also means that a collaborative, rather than a confrontational spirit, must exist in any business planning team if the results of that team are to be worthwhile.
Final Remarks
This article has discussed 12 killer principles of business planning that any plan must satisfy if it is to be taken seriously. Five of such principles are: requirements principle, objectives principle, motivation principle, background principle, and detail principle. These principles are a must for anyone running an offline or online business. If your business is failing it is more than likely that your failure to comply with one or more of these principles is to blame.
A business plan compels you to think before you act. It compels you to find out about your business area before you start; i.e. to research your business area or to establish its groundwork.
A business plan forces you to think hard about your competition and how you are going to beat them in the market. It forces you to establish whether your business idea is worth pursuing. Why start a business that is going to fail? Isn't that stupid?
A business plan forces you to establish the expected costs and revenues of your business, and hence to determine profitability. Why run a business when, at any time, you cannot tell whether or not the business is succeeding? If you don't know your costs or your revenues you cannot compare them together to tell whether your business is succeeding or failing.
An online business is no different from an offline business, when it comes to business planning. It needs a business plan! Yet, how many newcomers do we see trying to make it online without even understanding the concept of business planning? Is it then a surprise that too many fail?
This article discusses 12 fundamental principles that you must understand and use in your business planning if you are going to run a successful business. The principles are as follows...
1. The Requirements Principle
A business plan must comply with the requirements of funding bodies. This is particularly key when you are applying for funding, but is also necessary when you are not applying because the compliance act itself makes the business plan rigorous.
Funding bodies always have requirements that a plan must meet, and some of these are: technological innovation, presence of technical risk, and presence of commercial potential.
2. The Objectives Principle
A business plan must have clearly defined objectives and it must accomplish those objectives. A business plan is a strategic business document, and fundamental to any strategic planning process is the need to have objectives which the formulated strategies must aim to accomplish.
3. The Motivation Principle
A business plan must have clear motivations which highlight its importance. The motivations of a business plan are the reasons for completing the plan. These reasons tell us why the plan is important.
4. The Background Principle
A business plan must be the work of someone with a relevant background (the founder, for a start-up business), and the plan must comply with its author’s background. A business plan should be prepared by the person or team who is going to run the business. For a start-up business, this is critical because the planning process prepares the owner for running the business.
If the planning is delegated to someone else then it is unlikely that the owner will understand the plan sufficiently to be able to implement it. In these circumstances, the owner abandons the plan and does his or her own thing with deleterious consequences for the business.
5. The Detail Principle
A business plan must be sufficiently detailed to inspire confident action when executing the business; yet it must be flexible. A detailed plan is easier to implement than a superficial plan. A detailed plan suggests that the plan has been thoroughly researched and thought over. Detail inspires confidence in the owner of the business (assuming that he or she prepared the plan). A detailed plan should be flexible to accommodate changing times.
6. The Conservatism Principle
A business plan must be conservative. This means that it must always underestimate revenues while overestimating expenses. The reasons for this are underpinned by risk. A business is always executed under uncertainty... we never have all the knowledge we would like to make business success certain.
An immediate consequence of this is the tendency to underestimate cost, only to find that we run out of money at critical times of a business's execution. We also have a natural propensity to overestimate revenues... to dream!
7. The Cash Balance Principle
A business plan must always have a positive cash balance. A negative cash balance means that you plan to run out of money... to be insolvent! If you cannot realistically get the cash balance positive, without padding figures, then this is a sign that the business idea is not worth pursuing.
8. The Insolvency Principle
A business plan must guarantee against insolvency... against running out of cash. There are four ways to do this: conservative estimates so that the business always outperforms its plans, detailed cost identification to minimise omitted costs, contingency planning to accommodate forgotten items, and a positive cash balance throughout the plan.
9. The Risk Management Principle
A business plan must manage risks by convincingly dealing with uncertainty, reducing it to as close to zero as possible. This is simply stating that a business plan must be thoroughly researched, including desk research and field research. The more thoroughly a plan is researched the more it rests on sound facts, knowledge, and understanding, and the less the uncertainty and risk associated with the plan.
10. The Evidence Principle
A business plan must rest on supporting evidence, and guess work must be minimised. Sound evidence increases the reliability of a business plan and reduces the risk associated with it. And the less risky a plan is the more likely it will guide a business to success.
11. The Rigour Principle
A business plan must be rigorous – complete, correct, and reliable. This means that the plan must be derived from a systematic process that attends to all the issues that must be addressed. In particular, the plan must not be rushed. The issues must be sequenced and dealt with, each at the right time.
12. The Collaboration Principle
A business plan must be founded on collaboration (not confrontation) – it must satisfy the collaboration principle. This means that a business plan must be based on the works of others. It must not be opinionated. It also means that a collaborative, rather than a confrontational spirit, must exist in any business planning team if the results of that team are to be worthwhile.
Final Remarks
This article has discussed 12 killer principles of business planning that any plan must satisfy if it is to be taken seriously. Five of such principles are: requirements principle, objectives principle, motivation principle, background principle, and detail principle. These principles are a must for anyone running an offline or online business. If your business is failing it is more than likely that your failure to comply with one or more of these principles is to blame.
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