Business Financial Plan

A curious thing happens to entrepreneurs in the end of every year. You wake up one day and realize you had better figure out how much money was made last year in order to pay your taxes. But wait, shouldn't a business owner already know how much money he or she made last year, last quarter, or last month? Don't wait. Develop your financial plan today.

If you don't keep track of how much money you're making, you have no idea whether your business is successful or not. You can't tell how well your marketing is working. You need to know what your net profit is. If you don't, there's no way you can know how to increase it.
To be successful in business, you need to make a financial plan and check it against the facts on a monthly basis, then take immediate action to correct any problems. Here are 8 steps you should take:

Create a Financial Plan:
Estimate how much revenue you expect to bring in each month, and project what your expenses will be. If you need it, get help from business planning books, software, or an accountant.

Review the Plan Monthly:
Even if time is taken to prepare a financial plan with profit and loss projections, it often sits in a desk drawer. It's not enough to have a plan -- you have to review it regularly.

Lost Profits Can't be Recovered:
When comparing your projections to reality and finding earnings too low or expenses too high, the conclusion often is, "I'll make it up later." The problem is that you really can't make it up later; every month profits are too low is a month that is gone forever.

Make Adjustments Right Away:
If revenues are lower than expected, increase efforts in sales and marketing or look for ways to increase your rates. If overhead costs are too high, find ways to cut back. There are other businesses like yours around. What is their secret for operating profitably?

Think Before you Spend:
When considering any new business expense, including marketing and sales activities, evaluate the increased earnings you expect to bring in against its cost before you proceed to make a purchase. You can often increase your profitability simply by delaying expenses to a later month, quarter, or year.

Don't be Afraid to Hire:
Retailers and restaurateurs wouldn't consider operating without employees, but many service businesses limit themselves by being understaffed. Almost any business can benefit from hired or contracted help. You can better use your talents for generating revenue than for running errands and filing.

Pay Yourself a Salary:
If you are incorporated, you may already be doing this. If not, allocate an amount to owner's compensation on a monthly basis. Each month that your business meets its profitability goal, pay yourself the full amount. When you miss your target, dock your "pay" and when you exceed it, pay yourself a "bonus." Writing yourself a monthly paycheck will give you a strong incentive to keep your business profitable.

It's About Profit, Not Revenue:
It doesn't matter how many thousands of peso you are bringing in each month if your expenses are almost as high, or higher. Many high-revenue businesses have gone under for this very reason -- don't be one of them.

How to name your business?

It's very important to choose the right name for your business. It can create a good first impression for customers and also provide a great foundation for building your brand.
 

You can be creative when choosing the name. However, it needs to be appropriate and work on all types of marketing material, from signage to stationery.
Avoid hard to pronounce words or irrelevant business names.

Your business name must meet certain rules relating to prescribed and sensitive words and expressions. And you must ensure it hasn't already been taken by another business.
Even if you don't want a website just yet, you should consider registering an appropriate website address - or domain name. The domain name has to be available and registered through an agent eg a website host for a small annual fee.

After deciding on a name, you should consider protecting it, for example as a trademark.
If you want to start on a sole proprietorship, you must register and check on DTI Department of Trade and Industry.
If you want to start on a partnership, you must register it with SEC Security and Exchange Commission.Like business names, your registered name must comply with rules on prescribed and sensitive words and expressions. It also has to contain required words.
Finally, Defining your product or service can help you to work out your customers' needs and generate more sales.




 

Marketing on a tight budget

How to attract, win and keep your customers

To maximise your marketing spend, you need to focus on satisfying your current customers, encouraging past customers and attracting new customers to your business. Identify your unique selling point (USP) - what's especially good about your product or service - and use it to make you stand out from the crowd.

 

Get more from your customer base

Your regular customer base is critical to your business' survival and growth, so you need to seize chances to build and maintain your relationship with them on each interaction or sale.
There are many ways to do this when on a tight budget. Think about how you communicate - for example, you should:

• talk to your customers and focus on their needs and wants
• be specific, honest and clear about what you can offer
• keep in touch - send email updates or a newsletter
• get to know your competitors and what they are offering

Think creatively about your selling techniques. For example, you could:

• encourage people to 'buy now' by offering lower prices for immediate/bulk purchases or bookings
• use coupons or e-vouchers that are easy and cheap to design and distribute
• offer gifts, free trials and tasters
• reward your customers with loyalty schemes

Make sure your staff are fully aware of your customer base, products and services and are inspired about your business.

 

Encourage referrals from existing clients

Referrals from satisfied customers endorsing your business are the best way of getting new customers. So if a client tells you they're happy with some work you have done for them, ask them to recommend you to other potential customers.
Consider offering incentives - such as a discount off their next order - for every new customer an existing client points in your direction.

 

Find new customers 

You should always be thinking about how to attract new customers. You need to:

• let potential new customers know who you are and what you offer
• aim to provide an exceptional experience on the first sale
• offer options and solutions to increase convenience
• position yourself as a leader next to your competition - give a reason for customers to buy from you

Try to price your products or services according to their quality - you want to avoid under pricing them.


 Public relations on a budget
 You don't need to blow your budget to keep your business in the public eye. Even a cash-strapped business can use public relations (PR) effectively and reap the benefits.
When setting out to promote your business, it's important to be clear about what you want to achieve - for example, increased sales, increased visits to your website or more awareness of your product or service.
Some of the more cost-effective ways to promote your business can be to:

• make your business stand out - eg by offering a unique product or service, or by offering savings
• join relevant professional or social groups so you can network with other people
• tell people or write a press release if your business wins an award or contract
• specialize - you will be more attractive to customers if you are an expert in what you do
• promote yourself as an expert to local media, write an article or start a blog - see the page in this guide on how to use technology to reach your customers
• lead a trend or solve a problem that you have spotted
• volunteer to speak at meetings or seminars related to your field

If your budget allows, you could try these PR methods:

• relaunch your website, shop or product/service
• if you have a car or van, use vehicle branding or magnetic signs to advertise your business' phone number or website
• get involved in charity - offer to host an event on your premises and invite the media
• get involved with the community - try fundraising or offer your product or service as a competition prize
• survey your customers - get to know their needs and future wants

With a little time and creativity, you can create effective PR campaigns quickly and cheaply.

 

Use technology to reach your customers

When planning your marketing, look at how you're using technology. Are you getting the most out of what's currently available?

 

Email marketing

Traditional marketing methods - eg direct mail - are expensive and often wasteful. Email marketing can be a much more effective alternative, because e-newsletters are cheap - or free - to produce.
If your email subscriber database also contains demographic data, and/or information about buying habits, you can accurately target your messages to specific and relevant groups. For more information, including the legal considerations, see our guide on email marketing.

 

Text marketing

Text marketing - ie targeting customers using mobile phone SMS messages - can be a very powerful marketing tool when used appropriately.

 

Social networking

You can promote your business for free using social networking websites like Facebook, Twitter and LinkedIn. If used well, these sites can also be an excellent tool for interacting with your existing customers and making new business contacts.

Internet blogs

If you're an expert in your field, think about sharing that expertise online. Offering advice or opinions on your own internet blog can be a fantastic way of promoting yourself and your business.
Blogs also tend to get high rankings from internet search engines, so having one can make it easier for potential customers to find out information about your business.