Three Great Business Planning Resources

If you are new to running a business, just the thought of creating a working business plan can be overwhelming- and this is on top of all the other things you need to master to get your business from ideation to operation. You don’t want to add to the mountain by consulting a ton of different resources.

DartsYet, this is precisely the mistake that many aspiring entrepreneurs make. Little do they know that all that information can actually be working against them, creating confusion, lack of direction, and inhibiting real action.

For this reason, I’ve compiled a short list of what I feel are essential resources that will give any new business owners the tools and knowledge they need to get the process of building their business going without being paralyzed by all the data, opinions, and options.

The Small Business Association (SBA)– The SBA has a ton of great resources that can help you start and build your business from scratch- including an assortment of tutorials, such as this one on creating business plan. You should also consult the directory of Small Business Development Centers to see if there is one in your area. These centers work in conjunction with the SBA to offer a variety of consulting and training services and other support.

SCORE– SCORE is another great resource to check out. They provide free mentoring to aspiring small business owners. You can also take a look at their free business plan template. It is very easy to follow and it comes with helpful explanations.

Getting to Plan B: Breaking Through to a Better Business Model– When it comes to business books, just the shear number of popular options could make you dizzy. Don’t worry about all the “must reads” out there. At most, don’t spring for more than two or three (though you’re pushing it) titles. If you are just starting out, then Getting to Plan B, by John Mullins and Randy Kamisar, one of the only books you need. It goes through the process of developing a successful business model, one that is bound to change along the way (sometimes many times over). It’s about $23 for a hardcover copy and $18 for the kindle version on Amazon. It’s well worth the investment. If you want to know more about the book, here is a thorough summary of the main concepts it covers.

If you take the time and effort to use these three resources to the fullest, you’ll have the basics in place to pursue your business idea and turn it into a successful, sustainable business.

Why All Business Plans Should Be Written in Pencil (Or At Least, Erasable Ink)

If you are thinking about starting a new business or you are already in those early growth stages, then you’ve probably heard about the importance of writing up a good business plan. While having this collection of research, projections, goals, and strategies is very important, what many small business experts and consultants fail to mention is that chances are this plan will be pretty irrelevant a few years or even a few months down the road.

Nothing is Set in Stone

One of the unspoken “rules” of running a business is that you’ll probably end up doing things that you didn’t plan to at the beginning. It’s very common for business owners to change course along the way. Sometimes these changes are small; other times really big. Some of the changes are pleasant, others a bit painful. But as long as you approach these pot holes and detours with openness, flexibility, and the desire to work things out, you’ll come out on top.

The key is balance. Earlier this week I saw this video that chronicles how IMAX was able to use their setbacks and potholes along the way to totally adapt it’s business model. In the end the company was able to fit both the needs and realities of the film production industry and the movie theater industry. 

Over the past few years they’ve totally transformed the way they do business, but it’s clear that they’ve never swerved from their goal of making IMAX movies an accepted, prevalent, and profitable movie standard.

IMAX may be a big company, but the process that they went through to reach the point where they are today can be applied to just about any company regardless of the business’ size or industry.

If you are keeping the lines of communication open between you and your customers as well as your business partners and peers, then you can’t help but learn things that you never would have known otherwise, and you will realize that you have to respond to these things.

An Erasable Business Plan?

But if your plans will inevitably change, then why make such an effort to plan things out in the first place? Why not just jot down a few token notes and ideas so that you can quickly scrap the previous plan with a clear conscious and start totally anew?

The advantage of writing up a plan that can then be edited and erased is that you’ll still see all the cross outs and eraser marks- a silent testimony to all the twists and turns along the way. And that’s important, because you don’t want to lose the thread of where you’ve come from. That thread keeps you connected to your overriding business goals, and those objectives you don’t want to indiscriminately forget.

In short, as long as you are open to learning along the way, you take the time to refocus when those changes in course creep up, and you head into your business decisions with an overall plan in mind, then chances are good that you’ll go very far in your business.


Tips on How to Grow Your Small Business in a Recession

Yes, there are small businesses out there that are considering growth opportunities even as our current recession keeps a tight hold on our economy. But for those small businesses that are in this situation, any steps that they take to expand operations should be carefully implemented.

Here are a few tips on how to responsibly grow a small business in a recession:

Now is the time to re-examine, re-define, and streamline company objectives.

A recession often changes consumer demand, spending habits, and attitudes. It is thus extremely important that small business owners take the time to ensure that their businesses are operating in line with this a shifting environment.

Keep up the trust of your employees.

Even if you cannot offer a big benefits package, make sure there are methods in place for employee recognition and that the lines of communication are open.

Focus on customer service.

Catering to your customers is after all the focus of your business, and having good customer service does not have to get expensive. Like your employees, you want to build the trust, loyalty, and regard of your customers.

Develop creative, low-cost ways to advertise your business.

Getting your name out there effectively does not have to break the bank.

One of the biggest obstacles to small business growth is lack of funding or inadequate cash flow.

Make sure that you are doing all you can to maximize cash flow, such as implementing effective debt collection strategies, good price management, inventory management, and the coordination of equipment purchases. You should also be aware of all your financing options.

Stay on top of current trends in technology.

There are many software programs, services and devices on the market that will greatly improve efficiency and give your business a competitive advantage even over your bigger competitors. Many of these essential business tools are also relatively inexpensive.

Keep your eyes open for opportunities.

A recession may provide many opportunities to expand business operations. Real estate, for example, is much cheaper now and so is many raw materials. Consumers also have different needs, and your business may be able to capitalize on them.

(Image Credit)


Top 10 Small Business Resolutions for 2009

I recently came across this article in the English Observer that put words to a new cultural and economic reality that is taking shape here in the U.S.:

…The era of individualistic consumption that swept aside the Great Society of the 1960s has come to an end. For three decades, American culture has celebrated the glories of unabashed capitalism and the ideals of the rich. No longer. From Hollywood movies to celebrity culture to television, frugalism is taking hold. Consumers are cutting back… A national belt-tightening is having an impact on everything from restaurants and books to a collapse in the demand for cosmetic surgery. The recession is reshaping the cultural landscape in which ordinary people live their lives.

For many small businesses to succeed in this changing environment they will need to change or improve the way that they operate. With a new year beginning it is the best time for business owners and management to take stock of their business performance in order to plan for the future.

To help get you started, here are my picks for the top small business resolutions in 2009. Some may apply to your business; others may not. But the main thing to keep in mind is that to be successful in this new environment any resolutions that you set for your business should stay within, yet at the same time optimize, your available resources.

1. Make a plan. Before you can make any resolutions, you need to be focused on where you want your business to go. Look for areas of improvement and set realistic goals. Do you need to strengthen sales, improve customer service, smooth out your cash flow, increase efficiency? In the end, your plan will be an outline of sorts for all of your resolutions.

2. Improve communication and collaboration with your employees. Your employees are one of your greatest assets- and you should treat them that way. Not only are they intimately involved in the nitty-gritty operations of your business, but they are often your link to your customers. Invite your employees to offer their ideas, questions, and comments for how they can do their jobs better and how the business can improve. Even if you do not get any implementable feedback, make sure your employees know that you seriously considered their suggestions, and they will automatically be more motivated and more productive at work.

3. Strengthen relationships with your customers. In the current economic climate, customer loyalty is a precious commodity. Make sure that you are checking in with your customers about their experience doing business with you. Their feedback, comments, and suggestions may also help you to provide a better quality and more focused product or service. And like your employees, let your customers know that you considered what they had to say, even if nothing was implemented. You should also try to look for ways to reward or acknowledge your repeat customers.

4. Research and implement cost-cutting techniques. Look for simple and effective ways to reduce expenses. Some examples: 1. Buy energy saving products, such as CFL light bulbs and look into other resource conserving practices. 2. Improve product and supply inventory management so that capital is not unnecessarily tied up in overstocked on unused items. 3. Join a discount shopping club or make joint purchases with other businesses. 4. Look for ways to reduce employee benefits and health care costs.

5. Improve your cash flow. By smoothing the flow of capital in and out of your business, you will be able to run more efficiently and be in a better position to make decisions that can enhance your business, such as whether or not to purchase new equipment. Basically, you will need to take a look at your inventory, your accounts payable and your accounts receivable. In my previous post Keeping Your Business Out of Debt, I included some details on how to improve your cash flow.

6. Make quality control a priority. Make it a point to establish methods of assessing the quality and reliability of the products and/or services that your business provides. Put simply, the greater the quality of the products and the more reliable the service that your customers can get for their money, the more that your customers will want to use your business. Here also it is important to get customer feedback.

7. Pursue creative and low-cost marketing techniques. In two of my recent posts, I outlined several marketing strategies to promote your business without taking a big bite out of your budget. Some additional ideas: attach an informative signature on your outgoing emails, send a press release when your offer a new product or service or if you make an event that involves the community, write online articles for ezines.

8. Seek out advice and support. With a challenging year up ahead, it is important that you build a “support system” that will help you focus, clarify, and actualize your business goals. This support could come from coaches, mentors, hired professional consultants, or other small business owners. For starters, you can check out your local SCORE chapter or, or join your local chamber of commerce (to connect to other business owners). You could also join an online small business community.

9. Assess your progress. Make sure to set aside a few minutes every week to assess how your business is doing. What you chose to focus on in that time will be specific to your business, but some common areas to look at include: sales and inventory reports, cash flow statements, and ROI on current marketing strategies.

10. Remember to have fun! Running a small business usually involves a great deal of responsibility and and a great deal of stress- especially these days. Knowing how to lighten things up for yourself and your employees is an invaluable tool to improve productivity and build a loyal workforce. If you are a bit challenged in the creativity or sense of humor department, here are some common ideas: planning an inexpensive employee get-together, outing, or event (Why not go to the local park for a potluck picnic or invite someone to give a seminar), running contests that showcase employee contributions, let employees creatively decorate their own workspaces, or play music at work. And for some business humor.. check out this page.

Image credit: nicolas.boullosa 


The Worst Mistakes to Make When Applying for a Bank Loan

At a time when the American economy is reeling from the effects of unfettered credit card debt, housing foreclosures, and price increases on everything from a gallon of gas to a can of tuna, bank loans are fast becoming a shrinking commodity.

According to a recent Federal Reserve survey, the banking world is responding to the economic turmoil by tightening the reigns in the lending department. This comes as sour news to consumers and small businesses in need of additional funding.

With the cards stacked up against many bank loan applicants, I thought it would be a good idea to post a list of some of the worst mistakes to avoid when applying for bank financing.

1. You don’t do enough research. Don’t make the mistake of applying at a particular bank just because it is around the corner from your house. Find out which banks have a reputation for approving the kind of funding you are seeking. Also, don’t be afraid to seek out alternative financing sources, such as credit unions, community organizations, and government programs as well as alternative financing methods, such as home equity lines of credit, accounts receivables factoring, and business cash advances.

2. Your paperwork is unclear or inaccurate. Make sure all the forms and documents that you submit to the loan officer are both clear and accurate. Trying to forge or leave out information that may reduce your chances of receiving the loan can easily backfire leaving you with a bad reputation and without your funding.

3. You provide insufficient information. Make sure you are familiar with the bank’s loan application requirements before you come to the interview. Some banks will ask to see your tax returns, and providing your current credit history and credit score is a must no matter how embarrassing it is! Business applicants will additionally need to bring certain financial statements, such as a balance sheet or income statement.

4. You present yourself and your business as financially or structurally unstable. A general rule of thumb when it comes to bank financing is to try avoid applying for a loan while you are in the process of making major changes in your life or your business. In other words, don’t apply for a loan in the middle of a move or a business restructuring.

5. You present yourself as unorganized and without clear direction. Banks are looking to fund people and ventures that will make them money. Period! Consumers need to be very clear about where and how they hope to spend the funding they receive as well as their ability to pay back the loan. Business owners need to take it a step further by providing a good business plan that details how the business operates, who it caters to, and what plans are in store for the future.

6. You are unprofessional at the interview. Your bank loan interview is just like any other. Make sure to be on time, courteous, and neatly dressed. Pay attention to how you express yourself (it may even be a good idea to rehearse a little before the actual interview). Try to avoid abrasive and vulgar language, and never insult the bank or acting loan officer.

7. Not so fast! The relief that comes with a loan approval may cause you to zip through the remaining paperwork and bank “formalities,” but you might want to pause before you so quickly sign the dotted line. Make sure you are very familiar and comfortable with the bank’s terms and conditions on the loan before you agree to anything. If you have difficulty understanding the legal jargon then take the documents to someone who can explain it to you. There is nothing worse than binding yourself to something you don’t want.

Image credit: Flickr user  filipinoj

Free Online Business Finance Workshops

Today, I ran across a series of free business finance workshops that seem very helpful. They take a while to load, but they are very well done. There is a PowerPoint style presentation with a voiceover (not just reading what is on the screen.) Each workshop covers a different “How to” – I’ve annotated the links to the different presentations so you know what each one is about.

How to Develop and Write Your Business Plan  – This two-part workshop takes you through all the facets of the development and writing of a business plan.

Creating and Using a Profit and Loss Statement – This workshop is intended to provide deeper insight into the financial health of you company while going through the process of creating a profit and loss statement.

Preparing a Balance Sheet – This workshop is designed to teach you how to prepare the balance sheet you need for your business.

How to conduct a Market Analysis – This workshop teaches you how to gauge how much of an audience for your new business idea.

How to prepare a Cash Budget / Cash Flows Chart – The Cash Budget workshop is great for examining your business cash flows. (Don’t forget about our Business Cash Advance program for those occasions when you are in a cash flow crunch.)

Creating and Using a Strategic Plan – The strategic plan is different from the business plan. You can use it to access your business’ successes, weak areas and overall performance.

 Check out my other posts about online business finance tools for other resources.

Business Planning Freeware

During my morning surf, I found some directories of Business Planning Freeware and I thought I’d put links up.  I haven’t checked these programs out, so use your own judgement.  Some of them look rather old, but a formula is a formula and it looks like many of these programs could be very useful.

Many of them have all sorts of white papers and templates for new and established small businesses (and everyone in between).  Others have ratio calculators and the like.  I have only just started looking it over, but I wanted to share the directories with all of you.  One of the free-wares (eGuides from PlanWare) has info that supposedly helps with the following:

  1. Getting New Business Ideas
  2. Devising Business Strategies
  3. Developing a Strategic Business Plan
  4. Writing a Business Plan
  5. Insights into Business Planning
  6. Preparing Financial Projections
  7. Making Cashflow Forecasts
  8. Managing Working Capital

Anyway, try out these two directories for Business Finance/Planning Free-Ware, and let us know which ones you recommend:

Business Plan FreeWare directory from SoftPlatz

Business Plan FreeWare directory from FreeWare-Guide

Online Business Finance & Accounting Calculators

By using online finance/accounting calculators and other online tools, you are able to bypass hiring someone to calculate for you AND you are able to recalculate quickly and easily for various situations, projections, and ‘what if’s’.


Bank Rate has the following free calculators for Small Business Owners:

Calculate payments on any loan (incl. amortization schedule)
Current ratio calculator
Quick ratio calculator
Debt-to-assets ratio calculator
Return on assets calculator
Gross profit margin calculator
Operating profit percentage calculator


Here is what DinkyTown has to say about its Working Capital Calculator:


Your working capital is used to pay short-term obligations such as your accounts payable and buying inventory. If your working capital dips too low, you risk running out of cash. Even very profitable businesses can run into trouble if they lose the ability to meet their short-term obligations. The calculator assists you in determining working capital needs for the next year.


I hope to get a ratio list up here at some point to help people understand how, and when, the various ratios are used. 


Hope you enjoy your online tools. :)

Working Capital – Four Things to Plan!

Working Capital = Current Assets–Current Liabilities

Just like the human body needs calories to survive, a business needs working capital to continue operations.  Working capital is the money that is on hand for normal business operations.

If you have a solid business plan, and business is going well, then you should generally have enough income on hand to cover all your operating expenses.  When ends don’t meet, your business has to look for other sources of cash (that’s when you come to us!).  Ideally, however, your business will provide enough income so that there is working capital and enough left over for PROFITS.  That’s a great word, isn’t it?

Here are three things to remember when looking at your working capital and cash flow.

  1. Project revenues honestly and realistically.
  2. Don’t forget to include EVERYTHING in your estimate of costs.  Labor, supplies, rent, utilities, storage, salaries, and professional services/consultants are just SOME of what you need to remember.
  3. Break down and make a time estimate for your business cycles. Working capital means that it is there when you need it, make sure you will have money to cover expenses during the slow periods of your business.  Your cash flow needs to make sense.
  4. Make a list of plausible future changes that could affect your business.  This could include anything from competition to a change overhead, or payment terms on either the Receivables or Payable sides.