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Edmonton Business Consultant | Operations Strategy
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But what are you going to do if you actually get it all? What if you get the financing? What are the marketing initiatives work? What if customers want to buy? How are you actually going to execute that? Yeah, I can see why with the two I can be you and I cause it’s not. Hi, thanks for tuning in for another episode of ask Spiro CPA today as the Edmonton business consultant, we’re talking about the business plan operations strategy section. Have Denise here with me again? Denise, do you think it’s ever going to stop raining? I don’t know. No, we get a day one day and then it starts again, but I guess there’s no, no, the bright side is there is no smoke this year. Well that’s true. [inaudible] smoke every day. My Lawn looks great. Awesome. Awesome. Grasses Green. Yeah. Um, so the quote that we have here today, it’s a zig Ziglar quote and he says, when you stopped planning and preparing, you stop winning. And the statistic that we have are 50% of all Canadian businesses water business in the first five years and 29% of these failed business owners will list for running out of cash is one of their primary reasons for failure making running out of cash.
The second most common reason for business failure and the story that we have are a lot of business plans we see focused on growth, but don’t have a realistic plan to implement the gross initiatives or even you know, produce that amount of work or revenue. Once the sales are made effective, then they run out of cash. So Denise, what are the questions that these business owners, they should be asking so that you can assemble an effective business plan operations strategy section? Hmm. So do you normally dedicate an entire operation strategy section in the business plan? Yeah. Yeah. I think it’s worth a section. You don’t want a lot of, like I say, a lot of business plans are focused on, you know, the actual products that they’re doing and they’re focused on growth initiatives that they’re doing in this big over over, I don’t know how much financing they’re asking, but what are you going to do if you actually get it all of Edmonton Business Consultant you need?
What if you get the financing? What are the marketing initiatives of work? What if customers want to buy? How are you actually going to execute that? I mean that’s worth a, a section of the plan. We have very few, you know, not that many sections in our plan, but I think that’s one of the ones that’s, you know, uh, well worth its while. Yeah. Uh, do you describe the locations and facilities in the Operation Strategy Section? Yeah. So let’s start, you know, when we’re talking about our operation strategy section, let’s talk, we’ll start talking about the location. You know, how much work can you actually do in that location? How much is that location going to cost you? What square footage do we have in that location? Um, you know, what hours are we going to be open? That all has, you know, effects on the capacity constraints and if actually this thing is actually realistic to do, um, you know, we want to look and make sure that of facilities is actually appropriate for the numbers that we’re going to project.
Do you describe the equipment and software and the Operation Strategy Section? Yeah, a lot of times that equipment and software is going to contribute to the margins that we’re projecting. You know, we’re only able to attain those margins because we have specialized equipment or specialized software. Sometimes the customer we’re banking with the customer is going to buy from us on the basis of our, uh, equipment and software, which help differentiate us from our competitors. So let’s start describing exactly what that equipment and what that software actually does for the business. And you know, how much potentially it’s going to cost something. Well, facilities and equipment often dictate the revenue capacity of the business. Yeah, it’s a big one. You know, when we have these, uh, you know, there’s only a certain amount of work that you can do in that business and we want to make sure it’s actually possible at that facility, at that location.
Sometimes if not, we have to develop out that location or we have to switch to another location. If that’s the case, we got to have no realistic timelines on that. Well, you described the productions processing the operation strategy section. Yeah. So let’s, let’s actually, you know, walk through how we’re going to produce that product or service because we have to make sure we’re writing this for someone who’s not in your industry. First of all, you’re writing it for us so we can do a reasonable projection on it. Now if you are excited to get Edmonton Business Consultant and the most incredible CPA just call us now at 780-665-4949 or go to spurrell.ca !Um, you know, we’ve seen other items produced in other industries or maybe similar industries. You know, we have to make sure we understand how you’re producing the product or service, um, if that’s actually realistic in terms of who you have on your team, you know, work that you can do yourself or work that you’re going to have to hire other people to do.
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Um, and then we have to explain a lot of times to a bank who has no knowledge at all about your industry. You know, so we want to write out that production, uh, you know, process that it’s, you know, uh, easy to read for anybody not in your industry and starts to make intuitive sense. What does the milestone section of the operation strategy section. So the milestones, now we start, we said we’re going to do all of these things in this business plan. We’re going to find this new space and we’re going to launch this new website and running, get this new funding, we’re going to hire these new people. But now the milestone section, it started to establish dates on major milestones. So these are things that happen outside of the course of your business. So, you know, you have your estimates and you have your estimates schedule.
There’s certain times your times to see patients at certain times or even your times to follow up on pending contracts and certain times. But what about like launching that new website? What about, you know, taking the time to invest in that youtube channel that you need to do. What about finding that, that, uh, a new staff member that you want to hire on or you want to find a new location or find an architect or to develop the new location, all of those major milestones, you know, those are the dates. So you don’t just want to establish what those milestones are. A lot of times the milestones are already in the business plan. We’ve already said we’re going to do this, but now that milestone section is about establishing realistic dates of when we can actually accomplish those milestones. Well, specific mass masstones normally changed the financial projections at that point. Yeah. So now we put those in order, we have to say, hey, we want to, we want to build out a new facility. And step one might be to, you know, find the architect to design it. And then step two might be to find, you know, search a locations, uh, that will be acceptable. And then step three is get the least inactive and step four is actually build it out. So that means you know, the actual cost of building it up and paying the loan. Art’s still step four. So the financial projections at that point in time, that changed. So establishing realistic dates on it, make sure that we have the changes in the financial projections, you know, that those are reflected at that moment in time. And that way we’re more likely to have realistic financial projections that take into account these major milestones or these major changes that are taking place in the Edmonton Business Consultant world.
How many major milestones per month do you plan on? I like to plan on one major milestone per month that I’ve tried different metrics. I’ve tried over lording business plans with you know, two milestones per month or you know, being really precise about dates on when it comes. And I find that it’s more specular than necessary. And you know, businesses have a lot going on. They tend to absolutely underestimate how much of a time draw their ordinary operations are on their time. So when we talk about, you know, doing stuff, you know, major milestones, new websites, new locations, buying new equipment, hiring new staff members, they take a significant portion of time. So, you know, hitting these major milestones, I like to put one per month. I think it really keeps a business owner, you know, on, you know, on track, you know, when this month, if I want to get here and this month I have to do this or the next month I have to do that on the next month they have to do that. And if they go quicker, great. They knock out all those 12 major milestones in all, uh, you know, but you know, I think one per month is a good, good place to start in a regular business plan. And if you knock them out, hey, restart the planning process again if you want. But trying to overwhelm yourself I think is, uh, a recipe for disaster and overwhelm. It doesn’t, nothing major milestones month by month set realistic timelines. I think so. It just, it just, some businesses can move quicker than others and some they just have different capacities and different efficiencies and you know, they might have, I’m going to be really good at certain milestones. Maybe they’re really good at hiring new people, but they’re really bad at, you know, securing a new lease premise and designing that lease premise. So I think Edmonton Business Consultant , you know, that month by month, those major milestones, it tends to give more small business owners real realistic, uh, timelines, right?
And it’s really a way for, um, you know, to tether it and to show what you can accomplish in this amount of time versus what you, you, uh, you can’t accomplish. And the line that we always revert back to is the majority of all business owners, they’re going to completely overestimate what they can do in one year, but they’re going to completely underestimate what they could do in 10. You know, if you kept knocking out one of those major milestones every month for 10 years though, the, what you’re gonna call fish would be extraordinary. Right? But a lot of people think, hey, we’re going to design the place and, and find the, uh, find the space and get it built out in two months. And they, they just, you know, six months later, they’re still, they’re just barely ready to open as opposed to if they were realistic about it.
Now they finish it and now they keep going and they keep on that path. That’s great. Should the production process description be unders understandable to anyone? Yeah, I think that production process should be understandable to anyone. First of all, it’s going to help your, uh, accounting department really understand it because a lot of times the people in your accounting department, they’re not from your trade. So they need to understand it deeply so they can make sure that they can give you realistic projections based on that production plan that you have. And then of course, if it’s going for a, an external financer, um, a lot of times that external finance, it’s just not going to finance the deal if they don’t understand how you’re delivering that product or service. You know what happens at what times and when people get billed, you know, when money’s coming through the door. So I think that’s, you know, really important to, you know, describe it. Please contact us now for Edmonton Business Consultant at spurrell.ca or just call 780-665-4949 as you can! You’re not, this isn’t a training manual for someone in your profession. This is an explanation for someone outside of your profession in that, you know, describing the production processes. So I think that’s what we have here today. As always, please hit that light and subscribe button so we can continue to deliver you tips on how to beat the odds at business. And as always, no. If you have any comments or queries, please leave them below over, respond back and use your input for future videos. Thanks very much.