Edmonton Business Consultant | Even the Best Business Plans Lie
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Rather than spend for, I always say rather than spend 40 hours in the first year of your business, spend four hours every single year. And that those four hours, it’s enough to think logically about, you know, all the aspects of the business plan. Yeah, I can see the whole why with the I can be you and cause it’s not. Hi, thanks for joining us for another episode of ask a sperl CPA. Today as the Evanston business consultant, we’re talking about how even the best business plans lie. So again, at the end of business consultant, we’re talking about how even the best business plans lie. I have may here with me today, Mei, how’s your week been? Oh, extremely busy. Please give us a call if you are excited to get amazing Edmonton Business Consultant today! But it’s also good thing because it’s not only like that we’re growing, but it’s the fact that more and more of these business are trying to now understand what, how would it become successful? And they’re asked, they’re asking for help instead of trying to do it by themselves, trying to find this way. They’re trying to find that expert advice so they can continue growing their business.
Right on. So the quote that we have here today, it’s a Benjamin Franklin quote, you know, one of the founding fathers in United States and says, if you fail to plan, you are planning to fail. If you fail to plan, you are planning to fail. And the statistic that we have when it comes to business plans is from, you know, a Palo all told, they tell us that businesses that complete the business plan are 50% more likely to grow their revenues. So businesses that do a business plan, they are 50% more likely to grow their revenue than businesses that don’t. And we remember that, you know, the failure to attract new revenues, the most common reason that businesses fail, and this is your number one way to solve it. And the story that we have here and you know, business owners think that they’ll be able to consider all of the relevant variables in a business plan. Then there’ll be this master plan that is absolutely infallible. Um, so main, what are the questions that these business owners should be asking when it comes to, you know, the, uh, their business plan. Please give us a call now if you need amazing Edmonton Business Consultant today!
They should ask our business owners who complete a plan more likely to grow their business. Yeah. So I mean by all accounts, the data shows us that, you know, 50% you’re 50% more likely to increase your revenue. If you do a business plan, then that’s any old bad business plan. And we like to think we do better than bad business plans here. Um, so yeah, you’re, and we’ve seen anecdotally with our clients too, they’re just more likely to grow their revenue if they have a plan in place to grow that revenue are business owners who complete a plan less likely to run out of cash?
Yeah. So we were running out of cash. Um, that’s, you know, one of the significant pain points. And by doing a business plan, you start to get the realistic projections and the timings of the cashflow, what’s going to happen while you’re scaling up the business and while you’re adding in extra costs of the business and how that’s gonna Affect your, your cashflow on a, on a forward looking basis or looking out into the future month by month by month. And if you plan that out, you’re less likely to run into those circumstances where you’re just going to run out of cash. So yeah, it makes them, you’re less likely that they’re going to run out of cash by completing that plan. And do business owners who complete a plan have a more concrete HR strategy? Call us now for all the best Edmonton Business Consultant today!
Yeah, yeah. We try to address it in our plans. We have an HR section, how they’re going to recruit new employees and what’s their strategy to retain employees and that that can be lost. You know, a lot of business owners, they like to do the stop and start HR method where they look for someone when they need someone. And as soon as they have people, they stop looking, they don’t train them, they don’t look anymore. And then all of a sudden there’s always a crisis. They’re always, you know, really shorthanded and it’s, you know, a long time away before they hire someone or they have to hire the less than ideal person really quickly. Um, so we think, you know, that can be addressed, uh, in a plan and give you a better chance of success for sure.
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And do business plans tend to elevate the three most common pain points in all businesses? Yeah, so those are the three common pain points. So it’s, you know, when we look at businesses that fail, 42% will list that they couldn’t attract enough customers that gets addressed by a business plan. 29% of business owners will fail. We’ll say they ran out of cash and the old back gets addressed when the cashflow projections of a business plan and 23% of all businesses will say they failed because they couldn’t find the right team and that can be addressed in a business plan. Um, and so those are the three common, you know, you know, pain points of any small business and that business plan and you know, it’s not just the revenue, we can help you, you know, tackle those pain points as well. Okay. Is it possible to predict all potential future events in a business plan? Here’s where it breaks down a little bit though. Although it’s super effective for making it less likely that you’re going to encounter one of those three pain points or reduce the impact. It cannot possibly predict all of the future events that you’re going to have. You know, people quitting at key times, losing key customers, changes in the market, failures of equipment, banks pulling loans, um, you know, the business owner themselves getting sick, um, you know, regulatory changes, supply chain issues. You can’t possibly predict every future event in a business plan. That way it, it, it certainly it has its limitations. Even if this is done at the highest quality, it’s always going to have certain limitations. And is it possible for cashflow projections to be often any business plan? Yeah, so, uh, if we can’t predict all the, you know, future events, are we a week? Some of them, we can’t predict them happening at all and sometimes we can’t predict the significance of them. That means the cashflow projections, they are just that they are projections. Uh, there are plan on what could happen or likely to happen. Uh, but they’re not necessarily plan on what will happen with Edmonton Business Consultant.
Do you think you will, you can make reasonably good predictions within four hours of thought? Yeah, I think the average business owner can make re again, we’ll set a realistic vision for the business for this businesses already. Stuff that they know about, they’ve been researching, they’ve probably worked in the industry, uh, before you can start making, you know, reasonably good projections and communicate a vision to, you know, financial professionals like ourselves that we can then turn around and assemble, you know, decent cashflow projections and I’ll attend to air on like conservative cashflow projections because I know that there’s always these, these inherent limitations, the business plan. So I don’t see any reason to assemble these overly optimistic plans. Uh, sometimes there’s financing pressures, uh, that you know, favor, uh, optimistic plans rather than pessimistic plans, lets call them. Um, but at, at at the same time in absence of those pressures, you know, I would suggest that if this is being done for the business owners benefit, that you’re doing a better service to make conservative cashflow projections. Um, any of the average business owner can communicate that, that vision and articulate the vision and the, the various, you know, pitfalls and risks and rewards in probably about four hours a thought and putting it on paper, we can do a decent job. Reach out if need Edmonton Business Consultant!
Does there tend to be diminishing returns on additional time spent on the plan? Yeah, they’re, I, I think there’s, there’s it, it’s like anything there, it doesn’t matter how long you spend on this plan, you have to realize it’s a plan and there’s going to be things that you just can’t possibly consider. Maybe you’ll just completely miss them altogether or you don’t understand their significance. And it doesn’t matter if you spend four hours on that plan or if you spend 400 hours in the plant, you don’t have a crystal ball. It is not a time machine. There is no way to predict it with 100% certainty. So because there’s no way to predict it with 100% certainty, you know, the value of that plan. You know that the, the, the variables that you’re uncovering, you know, every additional hour that you work on that plan, it’s, it’s going down, right? You’ll uncover all, you’ll think through a lot of issues in the first four hours, but I think now are eight. Now you’re not thinking about as many an hour, you know, a hundred or 200 or $300 plan. Like at some point it’s, you have to realize it’s a plan. Uh, should you spend a little bit of time planning each year or lots of time upfront because it’s, you know, you’re going to learn about this business as you progress each and every year. You know, I think rather than spend four, I always say rather than spend 40 hours in the first year of your business, spend four hours every year and that those four hours, it’s enough to think logically about, you know, all the aspects of the business plan from pricing to, you know, market differentiation to sales and marketing strategies to operation strategy. You can communicate a vision, uh, and right now think about critically pull those necessary variables in four hours. Um, and I would recommend doing that each and every year because as you progress each and every year through the business, you gained so much more experience. And probably that four hours that you put in year two is probably better than 40 hours. You could have put it in year one because you just didn’t know as much.
Right? And you’re five, that four hours is, you’re like an expert compared to that person who put in, you know, a time in year one. So ultimately it comes down to a lot too. And then she, you got to implement this plan and see how the market receives it and see how the employees receive it and uncover the pain points in terms of the, the production and you know, what are the limitations on the marketing and what can you actually fit in your calendar. So I’m always encouraging business owners, you know, you’re there, they’re probably spending too much time on the planet in year one. They come in with these glorious items and you know, how many business lawyers did we see? They come in near three and they updated the plan by themselves. Once they’re in the trenches. Yeah, I’m going to see, get that focus. They’re just like, oh, I would still different from year one to year three. Yeah. That’s how they know, like business. That’s how they know they’re at least either progressing or now they switched their focus to the most important part. Call now for the top Edmonton Business Consultant!
Yeah. Yeah. I mean, I, the percentage of the clients that come in and you’re one who had some sort of business plan already, if it’s significantly higher than the percentage of clients who will come in and they’ve already done the plan, you’ll see some semblance a plan and you’re three, four, five, did they just give up on it? Is tends to be, we need to focus them on to stop planning at some point in year one is start executing and then in year two, three and four and five, like keep understanding that there’s a, you know, a huge benefit of a few hours spent on planning each and every year. So, um, I think that’s what we have here today. Thanks so much for tuning in. As always, you know, please hit the like and subscribe button. So we continue to deliver your tips on how to beat the odds at business and as always, you know, pleases some comments below so we can answer back and use your input for future videos. Thanks very much.