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Business owners who have business plans are more likely to succeed says virtual CFO. And more than just the famous quotes from Benjamin Franklin that said. If you fail to plan, you’re planning to fail. There’s also proof to back this up.
Palo Alto, who was a software company did a study. They wanted to find out if entrepreneurs that had business plans were in fact more likely to succeed. What they discovered, was that 50% of entrepreneurs were more likely to grow the revenue of their business if they had a business plan.
Therefore, any entrepreneur who has a goal of trying to grow their business, should create a business plan to help them succeed. The best business plans according to Virtual CFO will have a marketing plan as well as a target market outlined in it.
Business owners can actually contact their virtual CFO to help them create an effective business plan. Because it can be difficult to do themselves without any guidance. Many business owners don’t know what needs to be included in a business plan in order to be effective.
When they are creating their business plan. Virtual CFO recommends that entrepreneurs start with their marketing plan. Because many aspects of the business plan will be impacted by the marketing plan. so once business owners figure out how they are going to market their business. They need to know where.
The where is the Target markets that they are going after. And by figuring this out. Can help the rest of the business plan come together. Who the target market is will impact the advertising budget and the budget Of the business as a whole. Including cash flow projections and pricing.
When’s a business owner has a fully-formed marketing plan with Target markets, they can create the rest of their business plan. And most importantly their executive summary.
The executive summary of the business is going to be a synopsis that is at the very beginning of the business plan. The reason why this is so important. Is because often is the only part of a business plan that gets read by high-level financiers and financial institutions.
If an entrepreneur is planning on obtaining loans or financing of any kind. including the target markets in the executive summary of the business plan can be incredibly beneficial. It will show financing companies that’s the business owner has a plan on how to increase the revenue of their business. This will make them a lot more comfortable with loaning money to a business owner because they have a plan in place on how to increase their revenue.
If business owners are able to start their business with this kind of business plan. It’s going to increase their chances of success significantly. The reason why, is because 15% of entrepreneurs fail within their first year of business. And to avoid being one of the 15%. Entrepreneurs should have a business plan.
Not only are business owners without a business plan not sure what they need to do when they open the doors to their business says virtual CFO. But they actually are less likely to succeed in business. And with the high failure rate of entrepreneurs in Canada. Business owners need to do everything that they can to increase their chances of succeeding.
Business owners need to understand, that industry Canada did a survey to find out how likely businesses were to fail. And the reasons why. They discovered that 15% of all entrepreneurs failed in business within the first year. 30% failed within the second year of business. And half of all entrepreneurs failed by their fifth year in business.
The reasons why they failed says virtual CFO are because they couldn’t find staff for their business, they ran out of money, and the number one reason why Canadian businesses failed. Is because they were not able to find enough customers for them to succeed.
Business owners should realize that the reason why they weren’t able to find enough customers to succeed is not that they did not have a market for their product or service. But because they either were not able to effectively market their business. Or they simply did not try.
Because of this, business owners needs to have a business plan that has a marketing plan component. And the most important aspect of a marketing plan according to Virtual CFO is who the target market is. The target market is actually going to influence the entire marketing plan. Which is why business owners needs to figure it out first.
When was take that business owners tend to make is thinking that their target market is going to be much larger than it should be. It can be very difficult and expensive to Market to a large number of people. So business owners should understand they need to start small. And they can always grow their target market, as they grow there business.
ideally, virtual CFO recommends that people choose a target market that’s small. Because it can be more cost-effective to Market to a smaller area. The more consistently they do this, the higher return on investment that business owners will have. It’s far better for a business owner to send a flyer out to 1000 ideal and likely customers five times. Then it is for an entrepreneur to send 5000 clients a flyer once.
Once they have come up with their ideal target market, which for new entrepreneurs is best if it is actually around the location of the business itself. Then they will be able to figure out what their marketing budget is, and how much time they are going to need to devote to marketing. And all of these things can impact the rest of the business plans as virtual CFO. Including cash flow projections, pricing and budget.
When business owners are able to Define their best target market for their business. And then use that to create effective marketing and business plan. Then entrepreneurs will be far more likely to overcome the high failure rate of entrepreneurs in Canada. And successfully increase the revenue of their business and succeed.
