Part-Time CFO | Creating an Effective Business Plan
A business plan is exceptionally important to entrepreneurs says part-time CFO. Because this is the blueprints on how they’re going to be able to achieve their idea of success. As well as crystallized what’s that idea of success actually is.
In fact, entrepreneurs who don’t have a plan may have an idea of what they think success looks like. But haven’t taken the time to Define it. Therefore, they only have a loose idea of what they want success to be. And so it becomes very difficult to know what they need to do each day in their business to achieve it.
This ends up with entrepreneurs working exceptionally hard every single day in their business. But never getting closer to their idea of success. Whether that is revenue growth, increase customers, or number of units sold for example.
In fact, the three most common reasons why business owners fail. And according to Industry Canada, they are running out of money, not being able to find staff, and not being able to find enough customers. All can be addressed and overcome with a great business plan.
And sends half of all business owners to fail in business according to Industry Canada. It stands to reason that business owners would be able to increase their chances of success. If they would be able to create. Business plan.
The problem with this is, that even though entrepreneurs are convinced that creating a business plan will in fact help them succeed according to part-time CFO. This still doesn’t encourage them to actually go out and create a business plan.
This is often because they are overwhelmed with the information that should go into the plan. They don’t know where to start, and they simply think it’s going to take them 40 hours or more. And they’re not going to be able to put to that kind of time into creating a business plan.
These are all valid concerns. Which is why part-time CFO recommends that’s entrepreneurs contact to their accountant. In order to find if they use a business plan template.
The reason why entrepreneurs should seek out an accountant specifically. Is because chartered professional accountants can create realistic as well as a curate’s cash flow projections. And the accuracy of the rest of their business plan rests on being able to count on the accuracy of the cash flow projection.
Even if business owners do nothing else with their accountant except to get sand castle projection done. They would be farther ahead and entrepreneurs who think that they can do it themselves. And end up with either an inaccurate cash flow projection. Or their cash flow projection is too optimistic. And when a person is basing the accuracy of an entire plan on the cash flow projection. It needs to be realistic and not optimistic.
When entrepreneurs understand that there is an easy way to get a business plan done. That won’t require them doing a lot of head-scratching. Or spending dozens of hours on it. They’ll be more likely to get a business plan done that can help them succeed.
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Many entrepreneurs don’t know where they can go to get an effective business plan done says part-time CFO. And a lot of the times, the business plan that they create in order to get approval for financing. Deals only with the financing aspect of the business. And not a tax plan, marketing plan, or schedule. That is needed to tell help an entrepreneur succeed.
Therefore, contacting their part-time CFO or accountant to see if they can do cash flow projections. And if they have a business plan template that can help a business owner gets an effective business plan. With only spending a few hours on it.
The reason why it’s possible to get a great plan done in just a few hours. Is if a business owner uses effective templates. All the hard work has already been done. And understanding what information should go into that template.
And once a business owner has spent a few hours thinking about the information to put into that template. Spending any more time on it gives them diminishing returns. Simply because if an entrepreneur spends 4 hours on it. Spending 8 hours is not going to make that plan twice as good.
When they approach their part-time CFO or accountants to do a business plan. It should take about four meetings. And the first meeting will be understanding the entrepreneur’s personal circumstances. For example, how much money if any they need to pull out of their business. And when they need to start taking that salary.
The second meeting will be the entrepreneur seeing the tax and financial plan that the accountant came up with. Based on their personal circumstances. And then showing the entrepreneur the business plan templates. So that they can input their own vision and goals into the plan.
The third meeting will be the business owner reviewing the business plan recommendations and marketing plan. Based on their goals and their vision of what they would like for the business. And ensuring that they are okay with doing what is recommended. In order to succeed in their business.
And finally, the 4th meeting is simply to go over the plan one more time. To ensure that it is accurate and there are no mistakes. And that it truly reflects the entrepreneur’s personal circumstances, their mission, and the goal of the business. And it’s something that they are willing to do every single day in order to succeed.
Once they have this business plan. Part-time CFO says the most crucial thing is that a business owner does not put it on a shelf and then forget it exists for a year. They need to not only review it on a regular basis. To ensure that they are in fact on track. But they also need to update it, as they meet schools, and as things change in their business.
The most important thing is that at the end of the year. The business owner needs to take the plan back to the accountant. So that they can do the entire process all over again. So that they can keep ending up with an excellent business plan at the beginning of there every year. To help them Succeed in Business year after year.