As a new start-up business owner, you were anxious to get that business off to a good start, and you may have even created a business plan to give you some guidance on how to properly run your new venture. You made sure all the necessary business plan components were included:
- Executive Summary: A page or two of highlights.
- Company Description: Legal establishment, history, start-up plans, etc.
- Product or Service: What are you selling? Focus on customer benefits.
- Market Analysis: Know your market, customer needs, where they are, how to reach them, etc.
- Strategy and Implementation: Management responsibilities with dates and budgets. Don’t forget to track results.
- Web Plan Summary: E-commerce, which includes website, development costs, operations, sales and marketing strategies.
- Management Team: Describe the organization and the key management team members.
- Financial Analysis: Make sure to include at the very least your projected Profit and Loss and Cash Flow tables.
But fast forward 3 to 5 years later have you revisited your business plan, so can begin to measure the growth of the business. Many business owners fail to revisit their business plan to measure their business milestones or financial projections that were initial planned during the infancy stages of their business. It’s is always important for the business owner to keep an assessment of how the business is running by measuring what was planned versus what is current. For instance, here is a three item check list that every business owner should be conscious of every year.
- Fiscal Health: Are you looking at your business financials on a monthly or at least quarterly basis. What about the financial projections that were included in your business plan did you exceed those benchmarks or was there a shortfall. It is pivotal that you examine your financials. You need to know how you are doing through out the year, not just at the end of the year.
- Avoiding Debt: Understand there is harmful debt and necessary debt. Harmful debt is the debt you create for things you do not need such as excessive shopping, luxury items, expensive cars that you can’t afford, etc. Necessary debt is a debt that you may need for your business for example a small business loan to cover inventory, capital expenditures, acquisition or expansion. But the key is not to rack up debt if you are uncertain about whether the business will bring in profits.
- WealthBuilding: If you’re avoiding debt then you’re on the right track to build wealth, you cannot rack up thousands of dollars in debt then expect your business to morph into this wealth building machine. It’s not possible, one is the opposite of the other, as a business owner you have to make a choice. Conscious wealth building for the business owner is the ability to have a mindset of prosperity, begin to plan for the future and then stay the course.
These components are just a guide to assist the business owner in keeping an assessment of the business as well as how to look beyond the business plan to consider other ideas.