The main reason that some people take opportunities when they arise, and others do not, is that some people are ready.
They have their business plan ready and all they need to do is take advantage of the opportunities.
Where can you find the right business plan?
If your business is based in the United States - click here
If your business is based in the U.K. - click here
Ideas To Action.
Part 51 - Financials.
The three main sources of funding for a business are revenues from business operations, investor finances such as owner’s, partner’s or venture capital, and loans from individuals or financial institutions. Businesses need finances for daily operations and to meet essential expenses and payments. Expenses are either short term, such as payroll payments, or long term, such as purchasing buildings.
It is impossible to achieve your long-term and short-term goals without effectively managing your finances. Inefficient management of finances could lead to liquidity shortages. Your business needs funds for growth, market competition, and to keep operational and maintain your customer base. If your finances are restricted, risks that can negatively affect the accumulation of necessary business funds should be hedged with adequate insurance coverage and effective internal controls. You can obtain insurance for accidents, liabilities and business vehicles to protect your finances from sudden untoward impacts.
Finance is the process of creating, moving and using money, enabling the flow of money through a business in much the same way it facilitates global money flow. Money is created by the sales force when they sell the goods or services the business produces; it then flows into production where it is spent to manufacture more products to sell. What remains is used to pay salaries and fund the administrative expenses of the company.
When some element of the finance process breaks down businesses go under.
In order to guarantee your business gets hold of suitable financial backing, it is very important that you produce a business plan that will allow potential financiers to perceive the path your organization is going down, and when it proposes to arrive.
Your financial summary will be investigated closely by any possible backer that considers your plan. All the ideas, thoughts and systems discussed in your entire business plan comprise the foundation for financing your venture and should be reflected in your revenue statements and projections.
The truth is that any financier needs to know when you can pay the loan back.
- It is a certainty that you will have expenses before you start operating your business. It is essential to evaluate these expenses precisely and then plan where you will get enough capital.
- Your sales forecast is the estimation of the revenue that your company believes it will achieve from the sale of its goods and services.
- Generating your budget means you will evaluate how much funding you will have when needed. A budget is the forecast of the companies takings and its disbursements.
- Your profit and loss account determines exactly what is happening in your organization in terms of revenue and expenditure.
- Your balance sheet is an analysis of your financial balances at a precise point, usually the end of each month and at the year-end.
Each month, thousands of completely workable businesses break down by mishandling their cash flow. These difficulties are, for the most part, utterly controllable and perfectly preventable.
Backers will not analyze any ventures plan unless the ventures owner has made a real effort to describe the reasons why they need the money; this must be completed in a coordinated and clear way. If you are looking for a Government-backed or SBA Loan you need to assemble an all-inclusive loan proposition for your business.
Grants are on hand for a number of business undertakings and cover most business sectors. Grant funding is meant to cultivate business enterprise and also to give a boost to jobs and the local economy. Do not focus on what the grant does for your organization; outline what it will do for others.
Ideas To Action - next
A Great Business did not just happen - It was planned that way.