Part-time CFO | tips on how to create a business plan
One of the main reasons why business owners do not create a business plan according to part-time CFO. Even though they know that it could make a huge difference in their business. Is because they do not know how to start. Or what information to put into it.
And while using a business plan template can help a business owner understand the information that should go in a business plan. Not all business plan templates are great. And some are designed simply to give financial institutions the information they need. In order to grant financing to a company.
However, part-time CFO recommends entrepreneurs contact their accountant and use the business plan templates they have on hand. Because together they will be able to get a great business plan. In just a few meetings and about four hours of an entrepreneur’s time.
The first meeting they have with their accountant. Will be for the entrepreneur to explain what their personal circumstances are like. For example, what their debt servicing is. Such as mortgage, car payments, and bills.
They will also discuss if they have any income coming from other sources. Or if they have other family members who are contributing to the household bills. So that the accountant will be able to figure out which money the business owner needs to take out of the business in order to survive.
The second meeting that they have according to part-time CFO. Will be the business owner reviewing the tax plan and the financial plan the accountant comes up with. So that they can see if it is realistic, and reflects their circumstances.
The business owner will also get a copy of the business plan template. In order to put their own vision for the business and goals into the template.
This is where it is recommended the business owner spends about four hours devoted to this part of business planning. By blocking four hours in their schedule, a business owner should be able to have an accurate reflection of their goals, as well as what they want their business to look like. And their vision for the business.
Then there is the third meeting, where an entrepreneur is going to look at all the tasks that have put into the business plan. On what the accountant believes the business owner should do in their business to reach their goals.
A business owner needs to ensure that they are willing to follow the schedule, and to do all of the tasks in the timeline. In order to achieve their goals. And that it accurately reflects what the goals a business owner wants to accomplish are.
Finally, the last meeting will be for the business owner and the accountant to look over the plan. To ensure there are no mistakes. And ensure that everyone feels good about executing it.
Once a business owner has this plan. They need to ensure that they are reviewing it regularly. But then set the time aside in their calendar for this exact exercise in future years. So that they can continue to end up with a great business plan. That will help them achieve all their goals in the future years as well.
Where Can We Go For Advice On Part-time CFO?
Business owners should consider that a business plan is not just a document that will help them succeed according to part-time CFO. But it can also help them plan to avoid some of the most common errors made by business owners in Canada today.
According to industry Canada, half of all Canadian entrepreneurs fail within five years of starting their business.
They did a survey to find out why these entrepreneurs were failing. And found the three most common reasons. Business owners failed because they could not find staff to work or stay in their business. They ran out of money, and business owners could not find enough customers by their products and services.
The interesting thing to note says part-time CFO. Is that each of these most common reasons that entrepreneurs failed. Can be avoided by making a business plan on what to do when encountering those problems.
Therefore, business owners should understand that it is not simply about succeeding in business. But also planning what they are going to do when they encounter common problems. To help ensure that they do not end up succumbing to similar problems as fellow business owners.
Often, even if business owners to create a business plan. They spend an inordinate amount of time on one. In order to get there financing approved. And then put it on a shelf and never look at it again.
This is a huge missed opportunity says part-time CFO. Because business owners should review their business plan on a regular basis. Not only to remind themselves of what goals they set. But remind themselves of all of the tasks they need to accomplish. In order to reach those goals.
It is not necessarily a better plan to spend a large amount of time creating a business plan. Because once they have got most of their plan down. They are not going to make it that much better by continuing to refine it for several hours.
It is much more effective for an entrepreneur to spend four hours making their first business plan. And then four hours every year after that. To continue to refine it. Instead of spending forty hours at one time.
The reason why is not just because there is diminishing returns on spending a significant amount of time refining a plan. But also because of how much more a business owner learns once they have operated their business for a year.
They will learn so much after their first year, that the next time they do the business plan exercise. It will end up with an even better plan. And each year after that will keep getting better. Therefore, the quality of the hours that they put in year after year is higher. Even though there only spending four hours of time at it.
By understanding how to be effective with their business planning. Can help an entrepreneur understand that they do not have to spend a significant amount of time on a business plan. That it is better to plan shorter but more frequently. So that they can end up with a great plan to help them succeed.