Showing posts with label business planning. Show all posts
Showing posts with label business planning. Show all posts

Sunday, 6 May 2012

Young Entrepreneurs – Strategies and Tips to Keep You Focused


May 6, 2012 

young entrepreneursYoung Entrepreneurs

Are you a youth and itching for the chance at an entrepreneur opportunity? Does self-employment appear more appealing, more fitting with your aggressive aspirations?  You may feel that you are ready to take the jump, but feeling some anxiety in the riskier avenue of self-employment.

Some are ready to take the step at an early age, and when we reference young entrepreneurs, most reference being under the age of 30 as the youth entrepreneur category.  However, most young professionals take a strategic approach in capacity development prior to diving into entrepreneurship.
As a youth, you may have an early competitive advantage jumping into self-employment early.  Here are some tips you may find valuable for your entrepreneur journey at a young age.

Young Entrepreneurs – Goal Setting

What is your employment / self-employment pathway and what do you intend to do?  You will need to answer the “why” – why do you want to go into business for yourself?  Why do you feel this is your best opportunity?  Why do feel your products and services will meet a target market’s needs?
You need to determine what your personal and business goals are, for the short-term and long-term.  Develop your list of priorities and goals as a starting point step towards self-employment.

 young entrepreneursSelf-assessment – Young Entrepreneurs

As you have ideas of what type and industry you want to be self-employed in, you need to develop a list of essential and asset skills necessary for operations and management of a new business.  Essential skills would be the skills to carry out operational tasks and the normal core business skills to adequately manage the business.  Asset skills would be those skills that would add value to your business, such as knowledge and abilities in a specialty area (i.e.: Branding market specialist, IT tech specialist).

On the other side, you need to accurately and as objectively as possible, complete a self-assessment of your skill set.  You should identify and rank your operational and your management skills.  You have probably recognized that there are some consistent traits and characteristics across successful entrepreneurs.  Complete a gap analysis between necessary skills and the skills you possess, and note skills that are needed to complement your own skill set.

Capacity Building for Young Entrepreneurs

Capacity building involves you strengthening your skill set in those traits, characteristics and abilities you may have identified in your assessment as weaker or needing attention.  Strategically think and plan to build operational, management and financial capacities… all will be required for business.

Young Entrepreneurs need Mentors

Young entrepreneurs jumping into business in isolation is extremely rare.  Very few successful entrepreneurs have done it by themselves alone.  Don’t be afraid to call upon someone you admire, someone you have noticed as being successful in employment or self-employment.  Successful business owners and entrepreneurs that you know may act as a business mentor to you and show you the tricks and tips at the start-up phase and beyond.  Entering into a mutual mentoring relationship is considered one of those key actions that will move you towards success.

Business Planning for Young Entrepreneurs

You will need to conduct strong and detailed business planning prior to diving into your business venture.  Due diligence will be required on your part to analyze your industry and markets, your business operations, and your intended mix of products and services to offer the masses.  This could be considered one of your final steps in preparing you to present you business case to financial lenders, partners or investors.  The more prepared and the more work you put into business planning, the better the plan will be to implement and be used as your blueprint.

Business information, resources and tips for the entrepreneur
© 2012 Strategy Plan One

Thursday, 12 April 2012

Revenue Forecast – Factors and Projection Models


April 12, 2012 

revenue forecastRevenue Forecast – Overview

In one of your key business planning activities you will need to accurately project revenue streams. As part of revenue management, the information on your revenue forecast would be your strongest indicator in your business plan.

Your revenue forecast will illustrate how successful your financial situation is projected to be.  Investors, partners and bankers will be reviewing how you arrived at your numbers, at how you justified revenue and sales levels.  Your forecasting will need to be more than just an educated guess, however, an educated, experienced background is essential to forecasting.

Everything in your financial and business planning will be centered on revenue numbers, from estimating variable and fixed expenditures, to determining the amount of debt that can be serviced with the projected revenue levels.  So many factors, differing in various industries, need to be included in revenue projections.  Integral to forecasting revenue, your marketing plan will include some factors and will need to incorporate market potential information.

Revenue Forecast – Tools

Spreadsheets and calculators can assist in a formula based approach, but some are generic and do not take into account industry specific factors and differing revenue projection models.  In essence, you will need to incorporate specific factors into your calculations and run differing simulations to capture all potential circumstances.

The following describes some of the various factors and models to determine your revenue forecast:

revenue forecastRevenue Forecast – Based on Historical Financial Data

If you are forecasting revenue for an existing business, revenue projection may not be as difficult as you may think.  There is a historical track record of data for existing businesses to build on.  In reviewing revenue and sales trends in the historical financial data, you can estimate the ongoing continuous trend forward.

When reviewing and analyzing financial trends, pay attention to the rate of growth or rate of change in revenue and expense categories.  The rate of change must be taken into consideration, and don’t rely on a calculation of straight-line revenue projections.  If negative growth or declining trends are showing, differing strategies may need to be developed to get trends back on the right track.

Using Intelligence for Your Revenue Forecast

As an experienced entrepreneur you may carry some intelligence from past employment, from operational and management experience.  If your experience was industry specific and applicable to your start-up or existing business, you may have the intelligence to develop some close to accurate projections.

You may also be able to surround yourself with professionals that also have this intelligence.  We are not suggesting that you steal information from a competitor, but acquire professionals that are well-versed in a certain applicable industry, that have an innate ability to complete an accurate revenue forecast.  Accountants also specialize in this area but will need access to information and intelligence on the industry and markets.

Revenue Forecast – Industry Standards Data

Revenue models can be generated from using the industry standards data.  Loads of generic industry data has been compiled for decades.  The US Census Bureau is also a good source for industry data to base your projections on.  In Canada, you may want to search through Statistics Canada for general industry data.  Note that utilizing this data is more along the lines of a theoretical, averaging approach and may not take into consideration the factors of your specific business circumstances, area and markets.

Marketing Information for Your Revenue Forecast

Good potential sales data can be obtained from surveying your potential customers and potential markets.  You can base your revenue forecast on the total market and on your estimated market share.  If you have excellent relationships with your potential customers and there is a mutual agreement to supply products or services you may be able to sign into a preliminary agreement, or Letter of Intent (LOI) for future sales.  You can definitely extrapolate more solid information from this for your projected revenue and sales.

In addition to your own surveying efforts, you can obtain the services of a marketing company to do the work for you or to provide you will more specific market information for you to base your projections on.  Depending on the firm used and type of information obtained, this would be an additional reliable source of information, and more valuable to your revenue forecasting.

Tips to Assist in a More Accurate Revenue Forecast

  • Be realistic, and plan modestly
  • Generate projection scenarios, from conservative to optimistic
  • Back all projections with information to make it more objective
  • Use multiple information sources in developing projections
  • List your assumptions and justification for your numbers
  • Seek advice and feedback on your information
  • Develop strong relationships to build in LOI, MOUs with potential customers to assist in revenue projections
  • Adjust wherever needed and frequently; the more effort you put in the better the forecasting will get.
  • Remember this is not a perfect science but are tools for estimating

Using a fusion of models and factors indicated above may result in more comprehensive, more accurate revenue forecast.  Ensure you complete the due diligence required on detailed business planning, including using revenue projection models to minimize risk, and you will experience actual results closer to your financial projections and goals in the future years.

Business information, resources and tips for the entrepreneur
© 2012 Strategy Plan One

Sunday, 25 March 2012

How to Find Statistics and Data to Back Your Business Plan


March 25, 2012 

Statistics and DataStatistics and Data for your Business Plan


As part of your due diligence as an entrepreneur starting or expanding your business, you will need to develop a detailed business plan.  As you draft up your business plan and the financial documents, you will need to obtain data and statistics that would form and back your financial statements.

If you use to much guess work and estimates, pulling figures out of the sky, your business plan will be weak and subjective.  To make your business plan more objective, you should obtain credible sources of data from multiple sources.

Here are some helpful tips for gathering statistics and data from multiple sources.

Statistics and Data from Experience

If you are going into your business in the same industry you have been working in, you have excellent intelligence on marketing, sales and expenditure data.  Through years of experience in operations and management you will gain the innate ability to draft up projected financial statements from this known data.  Be careful not to steal data or proprietary information, but use your gained skills knowing the industry.

Statistics and DataStatistics and Data from Mentors and Advisors

You should always drive and lead the business planning project, but should you need an advisor or mentor, these individuals can provide credible sources of information to you.  Based on their experience and their network of professionals they will help you form more realistic projections.  Once again, a wealth of experience usually reveals a wealth of good statistics and data.

Statistics and Data from Surveying

If you develop some objective methodologies in surveying your potential markets for your products and/or services, you may be able to obtain some useful data for your planning.  This should be done with caution and should not be the only source of data you would use.  Ensure you sample randomly and with large sample sizes to make the data more reliable and valuable.

Statistics and Data from Federal Government Statistics Branches

To support data obtain through your own sources, you can seek out sources of statistics and data from Federal Government sources.

     US Statistics and Data

  • The US Census Bureau (http://www.census.gov ) provides an enormous catalogue of statistics and data on the US population, markets and the economy.  General economic indicator information can be found within a few easy steps on their website (http://www.census.gov/cgi-bin/briefroom/BriefRm ).  Information is also broken down by industry classification, based on 2007 North American Industry Classification System (NAICS) codes.  USA.gov website provides additional, relevant business and economic linkages to statistics and data.  Please note that information is presented in general overall industry, summary form and you will need to drill down as far as you can get to what is applicable to you.

     Canada Statistics and Data

  • Statistics Canada (http://www.statcan.gc.ca ) is the place to go to obtain statistics and data on the Canadian people, markets and economy.  Statistics Canada promotes their federal responsibility to provide objective statistics and data, with methods and surveying every 5 years.  Statistics Canada also has information broken down into NAICS codes.  Once again, this source can be helpful in analyzing the overall industry statistics and data.


Statistics and Data from Paid Sources

To round off your basket of statistics and data for your business plan, you can pay for very specific data.  There are many marketing companies out there in the private sector that can provide relevant data for your specific industry and target markets.  Companies can also provide customized surveying for you to obtain the most reliable, objective data.

Business information, resources and tips for the entrepreneur
© 2012 Strategy Plan One