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Writing a Business Plan is the Start of Your Online Business

If you are serious about the success of your online business then you need to find ways to give yourself every advantage you can over your competition. Writing a business plan for your company can be a crucial step in getting your profits to where you want them to be.

I. It is one of the best ways to motivate yourself and plan how to drive your business to the next level.
2. In case your business is just an idea in your head for a long time, writing a plan will materialize it.

A business plan can serve a couple of main purpose

In terms of revenues if you have to reach to a bank for the money, the plans that has already sorted out the investment you will need? And what is your contribution to it? Can be figured a head of time.

Briefly you need to know the following:

1. Your entire business plan
2. Description of your business
3. Your Markets Strategies
4. Competitive analysis of your market
5. Development of your plan
6. Managing your business
7. Finances of your business

Your entire business plan:

Your entire business plan should include the key points of the product and its benefits to your market and you. How much you think is the start up cost and how much profits your are expecting. A brief description of financial aspect. How do you see your company will operate as a result of working with this plan, in other wards the progress and achievements that you will see in your business. What have you done to start your business so far.

Description of Your business

This will include details about your product and your market. A plan of operation day to day activities to run the business. How will you manage all aspects of business doing it by yourself? Or you are expecting some help. How do you feel about your product.

Your marketing strategies

This part of your business plan includes your thoughts about marketing your product. Your target audience how will you market them. How will you introduce your product to them and when. What economical methods you are going to use for this on line plan.

Competitive Analysis of Your Market:

Here you will write about your competitors that your product will compete with. What are their strengths and weaknesses. An honest analysis is very important, so you may not see a set back in your business once launched. Alexa is a great place to look for that. This website will tell you about the amount of traffic your competitors are getting.

Developmental plan or Operational strategy:

Depending on the rest of the business plan in this section you figure out how to profit with your business from the very first day. How much sale your planning and advertising can grab depending how deliberately you planned your launch and how will your market react to your plans. This can also include making your operational schedule, planning your advertising before your product comes in the market and your product awareness.

Managing your business

This is the plan that is important for two reasons. In case you need more people to manage your business, this is where you introduce the team and their special contribution to your business. In case you have a lawyer or a consultants mention them here.

Finances of your business:

This is a very important part of your business plan. As after all a business is all about making money with it. The more profits you make the better it is. Now since you are only writing a business plan, you have to be very realistic and figure out your expenses before starting. Create statement forms and balance sheets for the capital investors. In case you do not need this only monthly income and monthly expense sheet is enough for you to figure out all the details of the business.

Once you have written your business plan you will be amazed you will be able to refer to it whenever you felt too involved in one aspect of the business or when you felt lost where to go from here. Writing a business plan can be a great way to see things in action. A business plan brings you closer to reality.
Makes you feel your goal is a reality to be working with your business soon.

Selling Your Business – Accelerating the Preparation Process

As my clients know full well, the best way to properly prepare your business for sale requires a significant amount of lead time – one to two years. However, I accept some business owners abruptly decide to sell their business and want it sold tomorrow, so will not have the time for long-term preparations. There can be a number of reasons for this:

  • A sudden onset of a serious debilitating illness.
  • A complete mental burn-out where you become unwilling to continue with the daily stress of running a business.
  • A realisation that your business is seriously declining and you no longer have the energy or enthusiasm to stop the slide.
  • Just plain old procrastination in putting off the inevitable until the very last minute.

In fact, most owners of businesses of under £1M in annual sales do very little preparation at all. As a result, the final selling price of their busi­ness suffers needlessly. Whatever your reasons for putting off the decision to sell your business – until you have little or no time for prop­er preparation – there are still several things you can do in the short-term to enhance the value of your business.

If you believe the type of buyer most likely to purchase your business is a “strategic” buyer, then very little financial preparation may be needed. Instead, you should draw-up your business profile emphasizing the aspect you think will be most important in attract­ing this type of buyer.

For instance – if you believe a strategic buyer is primarily interested in your customer base, then you should ensure this component of your business records is well documented and easily accessi­ble. Even though a strategic buyer will most likely not be too interested in the financial picture of your business, you should not omit to perform a recasting of your accounts to help you arrive at an amount your business will most probably sell for on the open market.

This, in turn, will give you a fair idea of what a “financial” buyer will most probably pay for your business. It will also be useful as a yardstick against which you can measure a strategic buyer’s offer.

If you feel the most likely buyer for your business will be a financial buyer – as most are – then recasting your accounts is essential, as is a valuation.

If you believe there are significant financial improvements you could take if you had more time, you should prepare a three year pro-forma financial statement including all the cost-saving and revenue enhancements you would have implemented if you had enough time. These enhancements should be carefully doc­umented and thoroughly explained in the pro-forma as to their prospective nature.

Be aware though, financial buyers are generally adverse to paying for future profits based on projected revenues and/or planned cost-cutting actions that have no guarantee of success.

You may want to base your asking price on your ‘out year’ pro-forma projections and settle on a negotiated price that moves you as close as possible to that amount. Again, it will be difficult to induce a financial buyer to pay for future profits that they will have to take tough management actions to realise.

No matter what type of buyer – or method of sale – you anticipate, in a short-term sale with little preparation, you should accomplish as many physical enhancements to the business as you can.

The following checklist is a guide to short-term initiatives to prepare your business for sale.

Accelerated Business Sale Preparation Checklist:

  • Identify the most likely type of buyer and method of sale. Some meth­ods of sale necessarily take longer than others but each situation is so different that it’s difficult to say which is the faster process. Clearly, if speed is of the essence, you will want to avoid the more complicated methods of sale.
  • Recast your most recent accounts for your last full year of operations. (Note: If you are more than six months into your financial year, you should develop a projected income and expense statement which you base your valuation.)
  • Calculate a liquidation value for your business based on your latest financial information. Use these results to establish baseline valuations for your business to aid you in establishing a realistic ask­ing price.
  • Take immediate action to accomplish as many non-financial business value enhancements and risk reduction strategies as possible. These actions will help to support an upper-range asking price for your business.
  • Review your business operations to identify revenue enhancement and cost reduction initiatives you would take if the time was available.
  • If appropriate, develop a one to three year pro-forma financial state­ment and calculate a new value for your business based on the projections identified in the previous step. Use this new value as the asking price for your business if you believe your projections are realistic and can be “sold” to a prospective purchaser.
  • Prepare as much of the business profile as possible, within the time you have, to provide a strong sales prospectus for your business. A Business Broker will perform this service for you and you may want to rely on them for this. However, you will still need to gather the necessary information together for it to be properly doc­umented.
  • Assemble a team to advise you in your business sale negotiations and hire a Business Broker or other appropriate professional to find prospective buyers for your business.

The process for preparing your business for sale with little or no preparation time is essentially the same as what you would do if you had more time. There are three key differences:

  1. You will not attempt to make cost-cutting or revenue-enhancing changes to your business because they will not show up in your finan­cial statements within the time you need to sell the business. Instead, you will try to “sell” these financial improvements through the use of a pro-forma statement during the negotiation process.
  2. All other enhancement efforts will necessarily be accelerated with the possibility they will not be able to be implemented in enough time or with enough quality as to favourably affect the selling process and the business selling price. In other words, do the best you can with the time you have available.
  3. The accelerated preparation process should be continuous, if possible. Even after you list your business for sale and begin to deal with possi­ble buyers, you should continue to make the changes and improve­ments appropriate to your business. It may take longer than you think to actually find a buyer for your business. By the time the right buyer comes along you may have implemented many of the improvements you did not think you had time to complete. This, in turn, will most likely be reflected in the actual selling price of your business.