Posts Tagged ‘financial business plans’
Small Business Marketing Plans
Every major market can be described as segmented into a number of parts. They can be based on the various characteristics of the customers, such as age, sex and education. They can also be based on the geographical and other characteristics of the markets. The common methods of market segmentation are geographic segmentation, demographic segmentation, psychographic segmentation, buyer behavior segmentation, and volume segmentation.
Segmentation based on region, continent, country and climate of the area comes under geographic segmentation. Segmentation based on age of the customer group, sex, family size, language, income level comes under demographic segmentation. Variables such as personality types, lifestyles and value systems form the basis of psychographic segmentation. Buyer behavior segmentation is similar to but slightly different from psychographic segmentation. The primary idea in buyer behavior segmentation is that different customer groups expect different benefits from the same product and as such their motivations in owning it and their behavior in buying it will be different. In volume segmentation, the quantity of purchase or the potential quantity of purchase is the base for segmentation. There may be bulk buyers and small-scale buyers, regular buyers and one-time buyers. They have to be treated differently.
Whatever be the parameters/ bases of segmentation, the segmentation task is an exacting one. Mere identification of a difference between one customer group and another does not complete market segmentation. In fact, the identification of differences is just the starting point of the whole process. Many other steps have to be carried out for completing the exercise.
It involves assessing the difference between one customer group and the other in terms of their needs and their likely responses to the product and other marketing inputs of the firm. Find out by what descriptive characteristics can consumers of a particular disposition is tagged on to a specified segment. Analyze and establish whether it is desirable and possible to formulate separate marketing programs and marketing mixes for the different segments.
Author: Max Bellamy
Small Business Internet Marketing
Local or regional specifics also have to be taken into consideration for the design of the marketing plan to target new business customers.
Tags: business plan financial, business plan financials, financial business plans, sample business plan financials
Financial Projections in Business Plans
One of the most difficult sections to write in a business plan is the proforma and financial sections. After all it is most difficult to what exact costs you will incur or what level of sales volumes are actually achievable. So often businesses are faced with excess government controls at all levels which take thousands of dollars in fees, additionally legal fees, delays and lawsuits often ensue and slow the project. You cannot know in advance what roadblocks or brick walls city planners, country agencies or Federal Regulators will come up with, as they often change their minds and add new laws in the middle of your already delayed project. These are only a few of the problems facing entrepreneurs when writing financial projections. Other issues occur from an over enthusiastic entrepreneurial positive attitude and business plan writers should double the money needed and triple the time to complete the project to be on a reality based plain. Thus if you beat your projections everyone is happy. Including bankers, investors and yourself. If folks are not happy you may find yourself in court defending yourself and making excuses, many of which many not be your fault, but in the end you are hung out to dry as the buck stops with you.
To assist you in writing your financial projections section of your business plan, I have prepared a sample. This sample is from a most simple business model; a mobile car wash, which is part of a franchise system. Please feel free to print this article out and make notes in the margins and then take a legal pad and sketch out your own financial projections and start-up capital needed. I sincerely hope this sample helps you.
- – - – - – - – - – - – - – - -
Financial Projections
We will follow our business plan to keep us in a profitable situation at all times. We will try to keep our car wash truck busy at all times. We will stay on top of collections and make sure all invoices go out on time and are directed to the person who authorizes payment. We will treat cash flow as a primary objective in order to reach our financial projections. We will be sure to have the right mix of services.
Gross Revenue Percentage Breakdown
Personal Car Washing 60%
Graffiti, Industrial, Concrete 20%
Fleet Washing 15%
Other 5%
Gross Revenue:
Insert Graph or Pie Chart Here.
* Note: Car washing of personal vehicles will be 60% of our business. Over 80% of these monies will be collected at the point of sale by either:
Cash
Check
Credit Card
Some will actually be paid in advance on credit cards thus keeping us on the proper course to achieve positive cash flow at all times. Very few customers will be allowed to be billed monthly.
** Note: Fleet washing and industrial (graffiti, concrete, etc.) will only account for 35% of gross receipts. Twenty-five percent of this will be collected at the time the work is done, leaving only 26.25% of gross receipts to be billed at month’s end.
Billing
On fleet accounts, all invoices will be net due in fifteen days. After fifteen days they will be considered late and 2% will be charged. If, in the future, our mix of percentages of services performed changes, we may offer a 2% discount for payment in ten days and a 1% discount for payment between ten and fifteen days. We don’t anticipate changing our mix. However, if our city awards us a graffiti contract for $75,000 a year we will definitely accept it.
Anticipated Gross Sales From Services
In the appendix there is a first year pro forma of projected sales. We believe these figures are attainable. For various reasons we will take a 70% scenario for budgeting purposes in case everything doesn’t go as planned. Just to be on the safe side. We project a conservative gross sales dollar amount to be:
$124,630 Projected Gross Revenue X .70 70% Of Projected Dollars = $ 87,241 A Conservative Safe Number To Project As First Year Gross Receipts
Anticipated Business Expenses
We project costs of $56,112 for our first year of expenses. Please see spreadsheet in the appendix. We will add in a 20% fudge factor just in case we have any unanticipated expenses in year one. We project a conservative business expense dollar amount to be:
$56,112 Anticipated Expenses X .20 20% Fudge Factor = $11,222 Possible Additional And Unanticipated Expenses During Year One
$56,111 Anticipated Expenses თ,111 Unanticipated Expenses = $67,334 Total Anticipated And Unanticipated Business Expenses For Year One.
Profit Per Truck
Please see the graph on the following page of the ‘Net Profit One Truck’. This graph is based on the spreadsheets ‘Anticipated Gross Sales From Services’ minus ‘Anticipated Business Expenses’.
We realize that if a conservative approach is taken, we must use the 70% scenario for Gross Sales and add 20% to Business Expenses. We project a conservative net profit for the first truck in year one to be:
$ 87,241 Gross Receipts – 67,334 Expenses = $ 19,907 First Year Profit. $ 19,907 First Year Profit divided by 12 Number Of Months = $ 1,659 Per Month Profit, A Good Conservative Number.
Author: Lance Winslow
Tags: Business Plans, financial business plans, Financial Projections in Business Plans
