You can’t run a solid business without having a good solid financial structure. Most people don’t have enough ready capital to self-finance, so it’s more than likely you’ll have debt. If you’re starting a business, you’ll need to find financing, possibly from a bank.
If you’re already in business you have to keep your debt load at a certain level. This is known as your debt to equity ratio, meaning how far in debt you are, as opposed to how much you have invested. A business plan is a crucial part of monitoring your cash position. By keeping it updated you can see where you are at a glance and see where your strengths and weaknesses lie. Also, if you are seeking financing, the lender will require a well written business plan.
One way to reach your goal of a strong financial position is to carefully shop for your financial backing. It’s a plus if you can invest your own money into your business, although you don’t want to put yourself at risk for losing everything if your business should fail. If you plan to borrow from a bank or other financial institution, compare interest rates, length of lending term. Your bank’s position will depend on whether not you have a seasonal product or service and what sort of assets you have. You may also consider seeking a loan from venture capitalists.
The point is, you don’t want to run your business by the seat of your pants. Use your business plan and your financial documents to keep a close watch on where you stand at all times. It’s much easier to fix or avoid money problems by being able to anticipate them as much as possible.
One thing to note, lenders pay close attention to the experience of your managers. Whether that’s just you, or you have a number of people in management, make sure those résumés are written in a way that clearly shows their strengths.
One of your goals undoubtedly is to steadily grow your business. Another important use for your business plan is to keep track of this growth rate. Part of the plan is to make three year projections into the future at least every fiscal year. In the beginning you’ll make constant changes to these as you feel your way along in the industry you’re in. As you continue, you’ll have a better idea of how to project more accurately.
In order to do this you must stay at least one step ahead of your competition and be able to anticipate changes. These things require hard work and attention to detail. Keep in close contact with your customers, even if you run a large company. Their feedback is what counts. We live in a cutthroat, competitive age and the way to win is to consistently provide top-notch customer service and satisfaction. Think up innovative ways to wow them by offering free shipping, coupons, bonuses for quantity buying…whatever it takes.
Hold staff meetings to come up with ideas for effective ways to keep growing and note suggestions in your business plan. By the way, satisfied employees are one of the best ways to ensure continued success. When they are happy, they pass their feelings along to your customers or clients.
Another way of staying on target with the goals listed in your business plan is to be involved with your community. Your community is not just the area where you do business; it also includes others within your market. Join trade associations, sponsor events, including charitable, be active in your chamber of commerce.
There are hundreds of ideas listed on the Internet for both small and large businesses. For example if you have anything to do with airplanes, there are trade and air shows on both the national or international levels all year long. If you are a woman that owns a small business, there are a number of organizations for you to join. Staying tuned in helps you to meet others who can provide you with great ideas for your own company and shows the whole business community that you are committed and serious about what you’re doing. It will reinforce those feelings within you as well.
Keep going over your business plan and look for more ways to reach your existing goals and even set some new ones.