Part-time CFO | how to make a business plan effective
If business owners do not know how to create a great business plan Says part-time CFO. They often end up not creating one. Because they become very overwhelmed by all the information they think needs to go into it.
Despite the fact that most business owners understand how important they are. They will not get a business plan made unless they are applying for financing. And need a plan in order to get approval. Plan. Without having to spend dozens of hours.
However, if business owners understood that there is an easier way to create a business plan. That ended up with them having a great plan. More business owners would take the initiative. And up with this document that could help them succeed.
The first thing that part-time CFO recommends is that business owners avoid putting forty hours or more into creating a business plan. A great business plan can be created just for hours of entrepreneurs’ time. And any more time after that will give diminishing returns to entrepreneurs.
Instead, a better way of approaching their business plan. Is to put for hours into it each year. So that as their business grows, and goals are achieved. An entrepreneur can refine their business plan. Bolstered by the fact that they will have gained so much information by being in business for that year.
That the hours that they spend in future years are going to be better than the time spent in their first year. This is partly because entrepreneurs tend to overestimate what they are going to be able to accomplish in their first year of business.
When a business owner spends forty hours on a plan at one time, they are not continuing to make the plan so much better than it can justify the additional hours spent. Part-time CFO says is much more effective for business owner to get the plan as good as possible. As quickly as they can. So that they can spend the rest of their time working on their business.
They can do this by asking their accountant to help them get a great business plan. Especially because their accountant will be able to help them get an accurate as well as realistic cash flow projection. As well as accurate financial and tax planning.
Even very experienced chartered professional accountants and up having a difficult time creating an accurate and realistic cash flow projection. That it is very unlikely that business owners themselves will be able to create an effective cash flow projection themselves.
Since a lot of the business plan requires a cash flow projection in order to set goals. If they do not start from an accurate or realistic standpoint. It is less likely that the objectives in their business plan can be accomplished.
Therefore, by asking their accountant for help. And spending four hours creating a great business plan. Can help ensure that entrepreneurs have this great tool that can help them succeed. Without them spending an inordinate amount of time can on a business plan. And ignoring their business.
Do You Need Any Other Information On The Part-time CFO?
It can be very overwhelming for an entrepreneur to think about creating a business plan says part-time CFO. Because they do not know how to start making one. They might get overwhelmed. And they also assume that they must spend dozens of hours on it. And they do not have that kind of time.
Since most business owners are working twelve-hour days in their business. Most of them do not have the time to create a business plan that will take forty or more hours. But the good news says part-time CFO. Is that they do not have to spend that kind of time on one.
By utilizing their accountant’s business plan template. And setting up regular meetings with their accountant. They can end up with a great business plan. In just for meetings, and for hours of work outside of those meetings.
The first meeting will be for the accountant to completely understand the entrepreneur’s personal circumstances. Such as debt servicing, other income they have. And their family life. Such as how much dependence they have, and if they have another family member ringing in and income as well.
The second meeting will be for the entrepreneur to review the tax and financial plan. That the accountant put together considering the entrepreneur’s personal circumstances.
This will show the business owner how much money they will be able to take out of their business, and when they will be able to start drying that salary. So that they can survive while running their business.
The second meeting will also be for an entrepreneur to look at the business template so that they can put their own vision of the business into the business plan.
Part-time CFO recommends that entrepreneurs block about four hours of their schedule dedicated to this task. Since they are the only ones that are going to be able to put what they want their business to look like. As well as their goals and their vision. They should set aside the four hours to consider this part of the business plan.
The third meeting is going to be the entrepreneur reviewing the tasks and strategic priorities that the accountant has put into the business plan. Based on the vision and goals they would like to achieve for their business.
The business owner needs to ensure that they are comfortable with all of the tasks that the accountant has specified they should be doing and the timeline set for each task to be done. Because this is going to be what an entrepreneur has to do in order to reach their goals.
If they are not realistic, or if an entrepreneur is not interested in doing those tasks. That is the time for the accountant and entrepreneur to refine the vision, goals, and tasks.
The final meeting is for the entrepreneur and the business owner to review the business plan one last time. To look for errors, see if there was anything that was overlooked. And to give it the final seal of approval.
And it is important that once an entrepreneur has this business plan. That they review it on a regular basis. As well as ensure that they are doing this same exercise each year. To continue to refine their business plan.