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Virtual Accountant | Components Of Practical Business Plans
Businesses fail to plan in their business properly, and being unable to grow their business and not know why says virtual accountant. Statistics say that businesses who create business plans for their business are 50% more likely to grow their revenue. The reason for this is because business plans create a tool for business owners to follow in order to achieve the goals they need in order to be successful. If businesses are disappointed with the lack of growth it had in their business, all they need to do is create a business plan and see their business start to thrive.
One of the reasons why business owners tend to not to create a business plan, is they believe it will take far too much of their time. Since time is an extremely valuable resource for businesses, itís understandable why business owners may not want to spend it so freely. However if business owners know how much it could actually impact their business as well as help them succeed, business owners may be more apt to take the time. Also, as virtually accountant recommends, it shouldnít take a business owner more than a few hours to create a business plan that can help them significantly. Business owners needs to be very mindful of how they spend their time, and this is one activity that is well worth it.
Another reason why business owners may not have the business plan, is that they donít know what to include or where to start. Virtually accountant recommends out of all of the components that can be in a business plan, the following ones are the most important and should be given careful consideration. The first most important one to include is a monthly cash flow projection. Most businesses that have a business plan have a cash projection year to year, but the recommendation is to change that to month-to-month in order to help business owners plan out there cash flow even better. The second most important the market and risk analysis, so that business owners can indicate what the risks are to mitigate them. Third is the sales and marketing plan. Entrepreneurs have great marketing ideas, but without writing them out and having measurable goals, those marketing plans will be effective. The last most important component that a business owner can include in their business plan, is creating a time block calendar. This is the part of the business plan that will help business owner step-by-step achieve those goals.
With those important components in place, a business owner can spend a few hours for thoughtful reflection figuring out what to include in those sections. Virtual accountant recommends that if business owners are having a hard time with their projections, their own accountant will be more than happy to help them come up with realistic projections that can help them in their business. Once a business owner has effective business plan in place, they need to not forget that it exists, and not only review itís on a regular basis, but updated often to reflect the changes in the business and market.
One of the problems that business owners face in business is that they are unable to grow the business says virtual accountant. 29% are unable to attract enough customers, with 42% run out of cash, and 3% of business owners could not find the right team. These are the three most common reasons why businesses fail, and all three of those reasons can be mitigated by creating a business plan.
Business owners may not want to spend the time in creating a great business plan, because they are unaware of how effective impeccable could be in their business. Once business owners understand how prudent it is to have a business plan in their business, all they need to do is sit down and start creating it. Virtually accountant recommends that business owners should work on it for a few hours, to create the right document. The first thing that business owners should include in their document aside from the executive summary and company overview, is the market and risk analysis. Business owners may not think it to include this in their business plan, because they already know the inherent risks within their industry. However virtual Believes that it is very important to include because they should also have a plan of action in the same section on how the business owner plans to mitigate those risks. Once they identify each of the risks they face, and have plans and how to avoid or minimize them, business owners will be much more prepared when those events happen in business.
The next they should spend time working on this is virtually accountant is the sales and marketing plan. The only an effective sales and marketing plans are the ones that are not done consistently says virtual accountant, therefore it is extremely important for business owners to create their marketing plans here so that it becomes easier to implement regularly. Business owners should get as specific and detailed as possible, even figuring out when they will start working on the initiatives. By having very detailed plans, makes the marketing plan easier to bring to life.
Another component part that is extremely important is a month-to-month cash flow projection. The most plans only include a year-to-year projection, virtual accountant recommends a monthly production in order to be more exact as well as to allow businesses to change an update that projection as their business changes. Business owners should also include monthly income statements and balance sheets within the document, because they will all fit together and give the business owner an extremely clear picture of how finances are doing in their business. Once business owners have all of the important parts of their business plan written out, the next thing they need to do is implement it. They shouldnít forget the need to review it occasionally and updated whenever necessary in order to keep this document functional.