Part-time CFO | How To Write A Four Hour Business Plan
Many entrepreneurs believe that they need to spend forty hours or more to make an effective business plan says part-time CFO. But this is not the case. In fact, spending that much time on a business plan will likely give an entrepreneur diminishing returns.
The reason why is because if a business owner can create a great plan that will help them succeed in four hours. Spending forty hours is not likely to ensure that their plan is ten times better. Therefore, it is important that an entrepreneur understands where they should be spending their time. To help grow their business.
However, many business owners are not taking the time to create a business plan. Either because they feel that they do not have the time to create an effective business plan. Or they do not know what information should go into one.
By contacting their part-time CFO. Business owners can use their business plan template. And in four meetings with their accountant, and four hours of homework. Onto manures can end up with a great business plan. Without having to be overwhelmed about what information should go in it. Or spending an inordinate amount of time on it.
The first business plan meeting that they have with their part-time CFO. Be the entrepreneur helping their accountant understand their personal circumstances. When the accountant can understand what debt servicing the business owner has, such as mortgage, car payments, or credit card bills.
As well as things like if they have any other income from other sources, what dependence they have. And if they have a family member who is also helping contribute to pay household bills. Then the accountant can help ensure that the business plan reflects their reality.
And they will know how much money nor needs to take out of the business. And when they need to start taking that salary. In order to make their ends meet.
By taking these things into consideration, the business plan can be realistic from a tax planning and financial plan perspective. So that business owners will be able to live off of their business while they are growing it.
The second meeting will be reviewing the tax plan and financial plan that the accountant has created. And then taking that business plan template and putting their own vision of the business into it.
They should spend about four hours of their own time doing this. Making sure that what they want their business to look like, their specific goals and their vision is accurately reflected in the template.
The third meeting will be the entrepreneur reviewing what objectives the accountant has put in for the business owner to accomplish. In order to reach their goals. And making sure that the business owner feels good about them. And that they are ready willing and able to do those things on a regular basis to succeed.
By working with their accountant and a business plan template. Entrepreneurs can end up with an effective business plan in just a few hours of time. That is going to be significant in helping them succeed.
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Many business owners may not be aware of how important a business plan is in helping them succeed says part-time CFO. In fact, a software manufacturing company called Palo Alto wanted to find that out for themselves.
They did a survey of small business owners, in order to find out if business plans were effective at helping them succeed. They discovered that entrepreneurs that had a business plan. Were 50% more likely to grow their business. Over and above business owners who did not have a business plan at all.
But not only do business owners struggle with creating a business plan. They often assume that they do not have the time to do this task. Especially as they tend to work twelve-hour days.
They do not think that they can squeeze in a business plan and that already busy schedule. Especially because they assume it will take them about forty hours to do.
However, it does not need to take an entrepreneur forty hours. And the business owners tend to spend that much time on their business plan. Typically will not look at those plans again. Putting them on a shelf, and forgetting about them.
But in order for a business plan to be effective. It also needs to be reviewed on a regular basis. To ensure that a notch been all remembers what their goals are. And what they need to do in their business each day to reach them.
Instead, part-time CFO recommends that entrepreneurs spend four hours creating a business plan. Reviewing it regularly. And then spent another four hours in the next year updating that plan.
The reason why is because an entrepreneur learns so much each year that they are in business. That the time that they spend on their business plan each year over the last will be much more knowledgeable. Meaning the business plan will be that much more effective.
Business owners also often tend to overestimate what they are going to be able to accomplish in a single year. And by working on their business plan each year. Can ensure that it is as realistic as possible. That entrepreneur will be able to update their goals, as they know more about their business.
And while business owners may be able to do this themselves. They should contact their part-time CFO and have them as well as their accountant work on this information. So that they can end up with things like accurate and realistic cash flow projections, accurate financial plans, and tax planning. That is going to be significant in helping an entrepreneur succeed.
By getting help from the right people. Can ensure that business owners end up with a business plan that will be able to help them achieve their goals. As well as overcome common obstacles that entrepreneurs face. So that they can stay in business along time, and reach all of their goals.