Small business start up costs can prove to be frustrating and stressful for a beginner business owner. Several entrepreneurs are intimidated by small business start up costs and choose to avoid even trying their knowledge in a small business for fear of not achieving success. Because starting a small business involves many expenses, they often think that having such a business will just lead them to failure. Fortunately, there are various ways to finance start up cost for a business; the ones that can help you some of the mounting business costs.
A business plan is an important catalyst of any successful business. In the absence of business plan, you can not easily get an access to business startup loans offered by banks and investors. Letting them know about your business plan can give them confidence. If you have professional business plan, you are providing a blueprint for successful business because you are making a change for your own business to be showcased to potential business startup funding providers. However, in doing this, you must strive to design a business plan that is really convincing and that pictures your abilities to manage such business reflected in your plan.
A business plan, for the purpose of acquiring a loan for business start up costs, has numbers of components. The first few pages showcases the Executive Summary and the Table of Contents. This is followed by the company descriptions- one of the most essential portion of business plans because this explains the short history, the company backbone, as well as the future plans, to the potential investors. The company description sections also mirrors the plan for business possible expansion. In other words, in this section is where the loan providers are most interested to know.
In the company description, you will need to steer clear of discussing that your business is a startup business. Startup businesses are categorized risky investments by most investors. Instead, convey what you have poured to the industry that you are presently in or plan on entering. You can also discuss the things you did that made others become successful. Another is, you shall discuss the growth of your business in the recent months or years and your forecast growth. You have to be sure that during your business plan presentation, you must be in full enthusiasm and passion for your new business venture and so you will be able to acquire a loan for your business start up costs.
Marketing analysis, in a well-written business plan, must be included. This explains your feasibility/ demographic study regarding your potential clients- this can help to convince your potential investors for your start up costs for a business . This portion of your business plan also tells your potential investors on how you are going to promote your business to clients in your target market. This also must show how intense your marketing research to ensure that your product would hit a great demand.
In order to acquire a loan for your small business start up costs , comprehensive financial plan must also be included in your business plan.
Numbers of new and small businesses struggle with the enormous quantity of small business start up costs incurred in order to materialize their business plan. Many entrepreneurs design a professional business plan to help them offer potential investors with their roadmap that shall poise them for success in their new venture.
What are the top three things you should concern yourself about when starting an Internet home based business? Here are some tips to make it in the online business environment.
Setting up an Internet home based business is like starting an actual business. Some people may think that since a business is operated online and from home, it is a smaller-scale venture compared to real businesses. This, however, is a misconception. Some Internet home based business are even bigger and are experiencing more growth than real ones. Starting and operating an online business venture may be a bit challenging when you are new to the field and is used to the conventional business and marketing world. However, there are also many resources on the Internet that you can get your hands on in the actual setting. The difference lies on how you take advantage of these unique Internet resources and make them work for you. Here are some tips on how you can successfully set up your Internet home based business.
PLAN AND SET GOALS
As in any business venture, the key to a successful Internet home based business is to plan. Set goals; determine what you want your business to achieve, and prepare concrete action plans on how you will achieve your business goals. Plan what you are going to need, in terms of investment and tools. In terms of investment, you might need to upgrade your computer for a better one, or you might need to purchase another computer to sustain your business operations. The investment requirements will differ based on the nature of your Internet home based business. In terms of tools, since there are a lot of resources available to you on the Internet, plan which resources can help your business. Do you need to set up a blog site, or join forums to advertise your site? If so, in what way should you advertise? These are just some of the things you should already lay out in detail before you even get started.
PUT YOURSELF OUT THERE
Once your Internet home based business is under way, the next thing you need to do is to advertise! There are plenty of ways to advertise on the Internet. You can set up a blog and write articles about your products. You can join forums and post website ads in various sites that your target customers often visit. You can exchange links with other sites to drive traffic to yours. You can post pictures and videos of your products on your site, your blog, and in forums. Also, master the art of search engine optimization to lure people to your website, and thus, to your product. The more visitors you get, the more potential customers you have!
BUILD A CUSTOMER BASE
Just as any actual business will not succeed without a loyal customer base, you also have to build a customer base for your Internet home based business. It is important to build a relationship with those who transact business from you. Chances are that they can even bring in more customers because of their contacts. Social networking is yet another concept that is very popular on the Web, and it will pay to take advantage of the social networking sites and communities online. There are a lot of social networking sites on the Web, such as Facebook and Myspace, which can help increase your customer base. When you have a loyal customer base, coupled with a social network that continues to bring in more and more customers, your Internet home based business will be unstoppable!
The arena where your Internet home based business will perform in may be different from the conventional marketing world, but the same rules applies. No business will be successful without careful planning, focused goals, a loyal customer base, and a source of customers. Don’t make the mistake of thinking that once you put your business on the Internet, it will grow on its own. The Internet is as wide as the world we live in, and your Internet home based business will only be successful if you’re ready for a challenge
You have nurtured your idea, created a business plan, and secured financing. Now for the make-it or break-it question: How do you continue to grow your business year-after-year?
Building a better “mousetrap” doesn’t guarantee that the world will beat a path to your door. And, contrary to the inspiring message in the movie, “Field of Dreams,” there are no assurances that, “If you build it, they will come.” Increasing demand for your products/services and growing your business is realized by the creation and implementation of well-defined strategies.
Two major factors of marketing are the recruitment of new customers (acquisition) and the retention and expansion of relationships with existing customers (customer relationship management). Once you have converted the prospective buyer, customer relationship management (CRM) takes over. The process for CRM shifts from that of being the marketer, to that of being a builder of relationships. Building customer relationships involves nurturing the links between you and your customer, enhancing the benefits that sold your customer in the first place, and continuously improving the product/service in order to protect your business from competitive advancements.
The marketplace is ever changing; therefore, a marketing strategy that works today does not necessarily mean that the same strategy will work in the future. These changing environments necessitate the need to continually analyze and measure the results of each and every one of your promotional efforts. A system that tracks and monitors incoming sales inquiries, by the lead source, is imperative.
The basis of your business development strategy is the recognition of the concept that marketing is a process and not an event. Building a business is, in fact, building a brand. Building your brand is a process that consistently broadcasts your message through a number of different channels to a targeted audience. The trap in event marketing is that it creates the effect of start and stop marketing and produces gaps in the frequency of your promotional efforts.
The need for a written marketing plan is critical. The American Marketing Association (AMA) states, “Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives”. Your marketing plan is your road map that guides you through the marketing process.
There is a variety of ways to generate greater demand for your business. Whether you are starting a new business or jumpstarting an existing one, you need to identify at what stage of the business life-cycle your company is currently in. This information will impact your choice of strategies.
Here are twenty (20) effective business-building practices:
Review your unique selling proposition: The Unique Selling Proposition (USP) is your biggest marketing weapon and the key to differentiating your business. What is a USP? In essence, it is a simple statement that sums up the unique features, benefits and value that you provide, that no one else can. You arrive at your USP after you identify the features, benefits, and advantages of your company’s products/services. After you apply the same process to each of your competitors’ products/services, then compare and isolate the elements that distinguish you from your competition.
Establish a marketing communication budget:: Determining and allocating a specific amount of money to fund your marketing strategy cannot be overstated. Whether you use the affordability method, percentage-of-sales method, competitive-parity method, or objective-and-task method to determine the amount of your marketing budget, you must pre-establish an amount of money that you will spend on marketing activities to achieve your sales/revenue projections.
Incorporate integrated marketing communications: A management concept that is designed to make all aspects of marketing communication such as advertising, sales promotion, public relations, and direct marketing must work together as a unified force. In practice, the goal of IMC is to create and sustain a single look and message in all elements of your marketing campaign.
Utilize indirect marketing: Needless to say, putting more “boots-on-the-ground” in your sales and marketing activities can pay huge dividends. Some of the more popular indirect marketing methods are networking, strategic alliances, independent sales representatives, affiliate marketers, and dealers/distributors.
Ask for referrals: You know the importance of referrals. But, if you do not continually ask for referrals, you will not generate them. It makes good business sense to always ask for referrals. Just ask your customer if they may know of other companies that could utilize your products/ services. You may be pleasantly surprised by their reply.
Explore different markets: If your products/services are presently being sold to one or two different markets, then it is time to explore the opportunities that may be available to you in other markets. A little brainstorming with your staff about this often produces a good “hit list”. As they say, “think outside the box”.
Consider additional channels of distribution: There are a number channels of distribution that may work for you. For example, selling direct, such as via mail order, Internet and telephone sales. Companies also use sales agents who sell on their behalf and/or
distributors (also called wholesalers) who sell their products to retailers. And finally, there may be possibilities of selling direct to retailers and end users.
Expand your geographic reach: Additional channels of distribution are often needed for you to expand geographically. You may want to consider the possibility of franchising or licensing others to promote and sell your products?
Increase product/service offerings: This is a very common method to increase sales/revenues. Important considerations when evaluating a new product/service offering are: Can the new product/service be sold to your existing customer base? Does the new product/service complement your existing products/services?
Differentiate your business: Differentiating your business means that you define your company in relationship to the competition and that you communicate to your customers the value added benefits of doing business with you, versus doing business with your competition. Differentiating your business also means that you continuously make improvements to sustain a leadership position.
Identify your customers’ competitors: A great source for new prospective customers is your customers’ competition. In most cases, these competing companies have the same or similar needs as that of your existing customers.
Survey your customers: In order to effectively differentiate your business, you need to look at your business from your customers/prospects’ perspectives. A customer survey is a great avenue for your customers to express their opinions, to air their complaints, and to voice their satisfaction with your business. The information collected from a customer survey provides the foundation for your marketing strategy.
Profile your competitors: A competitive analysis lists your leading competitors. It summarizes their products and services, promotional strategies, distribution methods, strengths and weaknesses, locations, offerings, prices, and branding. A competitive analysis also outlines strategies for gaining an edge and defines a course of action to take in order to keep competitors out of your market. The analysis helps you expose the competitor’s weaknesses and areas of vulnerability. With this information, you are better equipped to craft competitive and marketing strategies that you may choose to fine tune your brand and your messaging.
Acquire new customers: This is a given…your business cannot sustain itself without the addition of new customers. New customer acquisition is a process that combines market data with direct marketing tools to identify and reach high-potential prospects and convert those prospects into customers.
Mining your existing customers: It is far less expensive to generate additional business from your existing customer base than it is to generate new business from new customers. A regular review of your customers’ buying history and frequency of purchases can reveal some interesting facts about your customers’ buying habits.
Create customer loyalty programs: As the marketplace continues to be more competitive, more and more businesses are offering loyalty programs. These programs help to transform first-time customers into repeat customers by rewarding them with incentives, coupons, certificates or discounts.
Up-sell: Capitalize on the untapped value of your existing customers by promoting related or more expensive products/services. As an example, your customer who regularly buys golf balls is a strong candidate to purchase golf clubs, apparel and other golf accessories. Make a routine practice of recommending additional items that can be added to your customer’s order.
Merge or acquire a competitor: The benefit of combining your company with another company creates an immediate sales growth opportunity simply from the acquisition of their existing customer base. And everything else being equal, the new “combination business” should have the potential to become even more profitable than the two businesses operating independently. This potential for increased profitability comes as a direct result of both sales increases and operational efficiencies (opportunities to reduce total costs) that accrue from combining the two businesses.
Use SWOT analysis: SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. It is an assessment technique that paints an accurate picture of how your business stacks up based on those four factors. SWOT can identify your venture’s pros and cons, so that you can align internal strengths and weaknesses with external opportunities and threats. This exercise is essential to sound strategic planning. With SWOT, you can identify and prioritize the issues that will accelerate success.
Revisit lost customers: According to the research in the book, Customer Winback How to Recapture Lost Customers and Keep Them Loyal, written by Jill Griffin and Michael Lowenstein, a firm has a 60% to 70% chance of successfully repeat-selling to an active customer. A 20% to 40% chance of successfully repeat-selling to a lost customer and only a 5% to 20% chance of successfully closing the sale on a brand new customer. These statistics suggest that a key opportunity exists for businesses to increase or maintain a customer base by mining and evaluating their database of defected customers. Bernd Stauss and Christian Friege make this argument even more convincing in a case study entitled, Regaining Service Customers. Their findings show that the net return on investment from a new customer obtained from an external list is 23% compared with a 214% return on investment from the reinstatement of a customer who has defected.
Bonus Item. Dead prospect files: Dig out your old prospect files and make a “hit list” comprised of all of the old prospects that you think may still have life. Contact each one of them. Express your wish to discuss their present-day wants and needs, as well as, the opportunity to explore the possibility of you servicing their needs.
Which of the above business-building practices have you, can you, or will you implement in your business development strategy?
Looking for a new business analyst job can be intimidating whether you are a seasoned business analyst looking for a challenging business analyst position or you are applying for entry-level business analyst positions.If you do not handle your business analyst job search correctly, you may be passed over for positions that you are really qualified for or your resume may never get to the desk of the hiring managers or you may get discouraged by the lack of interest in your resume from potential employers. Whatever your situation, what I am about to say next may help you find your ideal business analyst job quickly, fast track your business analyst career or help you become a star player in the business analyst industry, so, pay attention!
Why Do I Need A Cover Letter and a Resume?
One of the things that can set you apart from all the other business analysts out there is your cover letter. This statement may be unexpected because most of us assume that recruiters and human resources departments receive so many resumes that your cover letter barely receives a cursory glance. However, this is no reason not to send out a great cover letter with your business analyst resume. You need a cover letter for the following reason; a cover letter shows that you put extra effort into introducing yourself to the company by creating a customized letter describing your business analyst training, business analyst skills and business analyst experience. Without the cover letter, the company assumes that you may be applying to every single business analyst job out there rather than taking the time to apply to specific business analyst position that matches your skill set and background. Your cover letter helps recruiters to select you from the hundreds of candidate’s resumes they receive. The recruiter scans your cover letter to see if anything jumps out to grab him and if your cover letter is memorable, he or she will move your resume over to the “Read” pile instead of the “Toss” pile.
A Good Cover Letter Will Help You Get Hired Fast!
Your resume will probably look much like that of other candidates who have the same business analyst education, skills, and training. This is why I highly suggest the use of a cover letter when applying for a business analyst position if you want to make a favorable first impression. Even if you dont have much prior business analyst work experience a cover letter highlighting your business analyst education & business analyst training gives you the means to show the hiring manager that you still have what it takes to do the job well. You should showcase your applicable characteristics even if they are mentioned on your resume. This shows that you took the time to create a unique cover letter that specifically addresses the company you are applying to. Note that you may not reuse the same cover letter over and over, as each cover letter must be unique and customized in order to stand out from the other candidates.
How To Write An Awesome Business Analyst Cover Letter!
You have decided to apply for a business analyst job posting and you have read the rest of this article, so you are ready to write a cover letter that makes your resume stand out. Here is what you must do. Read the job description and then use your cover letter to position you for the business analyst job opening. If the job opening is for a Business Analyst with Agile Methodology experience, mention that. If the resume requires Rational Unified Process (RUP) experience, mention that or else mention that you have Rational Unified Process (RUP) Training. List the key, measurable business results you have been principal to achieving. List all UML Training, Agile Training, Use Case Training, Requirements Analysis Training, skills and job experience. Mention any Fortune 500 corporations, business consulting experience, or experience in any industry aligned with that of your potential employer.
Finally, make sure your cover letter matches your key business analysis skills, training, certifications or job experience with the qualifications or requirements of the business analyst job posting.
Get the Attention of the Hiring Manager
How do you get noticed from a cover letter? The answer is getting the hiring managers attention right from the beginning of your cover letter. The introduction of your cover letter should be concentrated on grabbing attention in order to interest the reader into reading the letter through to completion. In the introduction you can tell of how you became interested in the business analysis industry, any formal experiences you may have in gathering business requirements, your successes, and your passion for being a business analyst. Then get into some of your previous business analyst projects and the results of the projects. Continue on by filling in the details about the business analyst skills you have mastered and the experience that makes you the better choice for the position. Accentuate how those learned skills will help the company to accomplish its objective of requirements gathering.
How To Format A Business Analyst Job Search Cover Letter
When writing your business analyst job search cover letter stay close to the straight and narrow path in formatting the letter. Use normal business conventions in the opening paragraph, when addressing the business analyst job position, and in the closing paragraph of your cover letter. This will apply to cover letters that you send to business analyst job postings by email, fax, snail mail or business analyst jobs posted on job boards like Monster.com, Dice.com, etc. Be courteous and business-like. Formality will not take away from you if you have something interesting to say, so keep the cover letter short by being focused and getting straight to the point. The entire cover letter should not be more than four paragraphs. Avoid starting out with to whom it may concern., that is old school If possible, you should use the name of the recruiting manager mentioned in the business analyst job posting. Do not use slang, cute phrases, emoticons or graphics. Make sure your spelling and grammar are correct. Use a spell-checker and if possible, get a friend or mentor to proof-read the cover letter before you send it out.
Finally, remember that your cover letter presents you with an opportunity to get your ideal business analyst job. It is your opportunity to connect with and capture the recruiters or hiring managers attention, tell your professional story and stand out from the crowd. It may take hard work to create great business analyst cover letter, but it is worth the effort, when you land that great business analyst job while others wonder why they are not as lucky as you.
I wish you success with your business analyst job search.
A lot of people are actively looking for a lucrative residual income business opportunity, but they make critical mistakes. Heres how you can avoid those costly errors. The 3 key main factors to consider are:
1) the amount of monthly income generated
2) the amount of resources required to create that stream of residual income
3) the duration of the income, including whether or not the amount of income increases or decreases over time.
Most people make the error of, first, being introduced to a company and then, second, trying to see if it is a good residual income business opportunity. They fall into the proverbial trap of not being able to see the forest for the trees. They find the tree first, without knowing what kind of forest it is in. A better approach is to identify the ideal forest first, and then look for the best tree in that forest, second. Giant Sequoias are much much taller than pine trees, but you wouldnt see that if you only look in pine forests.
The kind of forest to look in for the absolute best residual income business opportunity is NOT that of the employee or the self employed. This includes traditional work-from-home businesses. In addition, some people think that network marketing is a good forest to look in, but there is so much competition in network marketing, both in selling products and in recruiting a downline, that the return on your efforts is almost guaranteed to be low. That is how micro-economics works: high competition = low margins of return. If you are looking for the absolute best residual income business opportunity, the proper forest to look in is that of the investor.
As an investor, you are able to leverage other peoples time and other peoples money, while retaining control. You dont have to sell any products or services in the midst of fierce competition. The amount of income created is directly related to the rate of return you are able to generate. You can even hire high-performing professional traders to do the active investing for you, on a pay for performance basis, so that you dont have learn how to become a full-time trader yourself. The amount of personal resources involved can be minimal, especially if you are using other peoples money. The most valuable resource is specialized knowledge, which can be learned, from the right source. And the duration of income can be multi-generational, recession proof, and increasing every year, due to the power of compounding returns.
One excellent, yet relatively unknown source for gaining the specialized knowledge, and careful guidance on how to apply it correctly, is The Financial Freedom Foundation. They are a non-profit organization dedicated to showing people how to become financially independent. With the resources they provide, you can grow your own personal forest of Giant Sequoia sized money trees with $100 dollar bills coming off of each branch, for you to use at your convenience. Theyll show you how to create up to $100K residual income within 12 months, and give you the knowledge of how to grow that to over $1M per year, within 5 to 10 years all this using other peoples time, talents, and money. That is the absolute best residual income business opportunity around. They even have a FREE REPORT that you can download from their website, to get an inside peek as to how you can do it yourself.
When you are getting ready to order business cards there are some things that you should think about. First consider what you would do if you were to get two business cards from two of the same types of businesses. One of these business cards is going to be black and white and have the basic information while the other is going to have the same information and be colorful and glossy. It is likely that you are going to be more impressed with the glossy business cards. This is something that you should remember because both of these are going to contain the same basic information like the contact person, website, email address, phone number, and physical address. Plus they are going to announce the business and what the business is known for. If you are more likely to pick the glossy version than that means that a lot of other people are going to be keeping your business cards if this is your choice as well.
Today the glossy business cards are one of the more popular choices because the economy is not doing well and there is so much competition for businesses and jobs. So if you do not have much money to invest in advertising for your business then this is one upgrade that can really help you to improve your business and get your investment back. They are going to get you far more business than the plain or standard versions are and they are going to get you noticed more. In fact it is important to know a few statistics when it comes to business cards like that twenty percent of them are thrown away within twenty four hours of when someone gets them. This can be a problem for your business because it can cost a lot of money for you that is basically being thrown away. When you choose the glossy coated ones they are likely to last longer than the normal version and they are going to be more impressive to those who receive them.
There are two different versions of glossy business cards. Some of these are just regular business cards that have been printed and then covered in a glossy coating making them thicker and causing them to last longer. Others are just printed on glossy paper and these are not going to last as long. In fact the first are going to be resistant to water and sun and will actually keep from aging but the others are going to still have problems with fading and yellowing and will not hold up against water. So if you are going to spend the extra money you should make sure that you are choosing the ones that are coated with the glossy coating.
Finally remember that this is going to help you to be able to get the most color on your cards as well. You will find that this is going to help the colors to be more vibrant and more noticeable. Plus it is going to help you to have the best overall effect for your business so that you will be happiest with the purchase that you have made when you order business cards.
In todays business environment, organisations know that to be competitive, they need to respond to change, especially as customer expectations increase. Customers are more demanding, mobile and informed than ever. Global and distributed organisations need consistency in the quality and levels of service regardless of where and how they conduct business.
It is extremely difficult to meet these challenges in a timely manner if business IT processes are widely dispersed, silo-based and inconsistent. Consistent core IT business processes, language and data representation is essential to allow decision makers to respond quickly to the changing market.
Defining and maintaining consistent IT business processes is a lot easier said than done but critical if an organisation is to survive in todays market. This article will define core business processes and explain how to differentiate these processes from their implementation. It will also review how to prioritise which processes to investigate first.
Defining the core business processes
A “core” business process is defined as the minimum individual tasks to be accomplished to provide a certain level of consistency in output, without any consideration to hardware, software, people resource or performance.
When a core process is implemented, anything can be added to make the process more efficient, but nothing should be eliminated. When the core business process states that certain tasks must be performed in sequence, then it must be reflected in the implementation. In the same manner, any specified steps associated with a task must also be reflected within the implementation.
When asked, most organisations will claim that their core business processes are documented. Yet, typically, it is not the core business process that has been documented but the implementation of that process within a particular system or function. In this scenario, the documentation contains system or application process models reflecting implementation details such as “enter username.” Most times, documentation of a core business process doesnt reflect whether a user is identified by a username, badge number, ID-card, or some other method of authentication, as long as the organisation is satisfied with the accuracy of the documentation. Identifying and authenticating a user is an implementation issue, not a business process.
Its not easy to separate implementation from the core business process. Just take one business process and see how readily you can identify the major tasks involved without letting implementation issues creep into the mix.
And it only gets more difficult when core business processes become more intricate and critical within the enterprise.
Using the right process methodology
The methodology and approach used to identify, derive, or create core business processes will vary with an enterprises size, industry and culture.
There are several proven methodologies and supporting tools for deriving and improving business IT processes (e.g. ITIL and ISO/IEC20000).
Your first steps
1. Investigate and remove hurdles relating to organisational cultural issues, governance processes, and supporting infrastructure up front.
2. Educate participants on what a core business process is, how it will benefit their respective business area, and the chosen methodology that will be used to derive these processes.
3. Dont try and do all of the critical business processes at once. Suggest a phased approach with a sound transition strategy.
Once youve identified core business processes, its important to prioritise which ones to tackle first. A new
business channel or service is a good place to start, as business analysis and requirements gathering have likely already been done, which should provide a good jumping-off point for identifying core processes.
Next, tackle any business process areas featuring disparate results between business units. Then, look at processes for which new enabling technology is being considered. Rounding out the list are those processes supported by different implementation and those supported by more than one location or business.
It is import that all parties involved in executing the process clearly understand that it is the process that should be empowered, and should not be confused with the organisational function and position performing it. For example the Service Desk working on a major payroll incident, which requires immediate response and resource from the development team.
Your core processes should be a living entity, it is therefore essential to regularly review the performance of your process and adjust as business demands change. (Refer to the Quality management process review flowchart).
Its never too late to start
If enterprises are to remain competitive; they need to reduce the complexities resulting from widely dispersed and often disparate business processes. Establishing consistent empowered core business processes is just one step toward meeting increasing customer expectations in today’s market.
Forecasting upcoming sales in your Spa business is a critical constituent of starting up and running a business; it is a fundamental constituent of your Spa business plan. It’s doubtful that your Spa business will be dead on but you ought to be able to make credible, evidence-based projections in order to plan your Spa business strategy.
The quantity of money your Spa business will achieve each year depends on how many sales of its products or services – but before you start off the process of actually making these sales you should create a sales forecast. The sales forecast for your Spa business will stand on its own virtues – it will of course be a part of your overall Spa business plan.
So why do you need to forecast sales?
A sales forecast is necessary in order to
1. Plan cash flow – that you will need to add into your business plan when seeking funding, and to avoid sudden cash flow problems by establishing if and when you will need to inject capital or have access to funds.
2. Manage Cash flow – innermost to the success of your business, it is essential that you appreciate how sales forecasting contributes to the computation of the cash flow forecast.
3. Plan future resource requirements – for example, you may want a new mechanism which produces more goods.
4. Plan marketing activities – this will obviously have a knock on effect to the quantity of sales you make as well.
Whatever the situation, it is crucial that you research your projected sales regularly and realistically, and take appropriate action to have another look at your strategy. Your sales forecast is the point of reference alongside which you should constantly gauge what in fact happens in your business with regards to sales and the important thing is to appreciate the variances and why they arise, and to incorporate what you have learned into coming forecasts.
What components do you need to think about?
Your sales forecast should show sales by month for at least the next 12 months, and then by year for the following two years. Three years, in total, is generally enough for most business plans.
Things to think about
1. Is there an customary market for your product or service?
2. How extensive is the sector?
3. Is this an escalating/contracting market and if so; by what %?
4. What are the most important considerations for this market?
5. What may possibly affect it in future?
6. How do recurring factors affect purchases of your product or service?
7. What trends or fashions are related to the sector?
Who are your customers going to be?
1. What % will purchase?
2. Why will they finish trading from someone else to buy from you?
3. What is your pricing plan and how will it influence sales?
4. Can you in fact make available the products and services that you are predicting?
5. How many competitors do you have?
6. Your business will not be distinctive; what happens when new competitors come into the market once you have done the footing to raise market awareness?
The whole planet is your marketplace with the invention of the world wide web – but what products/services can you persuade somebody to buy Virtually every business has some competitor(s) – how can you hoover up your competitors customers? How can you avert your competitors taking your customers? Can you adjust your product prices up or down to match new customers – can you easily add or adjust the services you offer to new and existing customers to boost your turnover and profits?
Preparing your Spa business forecast
You need to make certain future assumptions for your Spa business in order to create a sales forecast
1. Sector increase/decline by a certain percentage e.g. 5%.
2. Personnel increase to increase production or sales – maybe 25%.
3. Different location – more customers – 30% increase in sales.
Preparing your forecast
You should prepare a sales forecast for each item you sell,and forecast:
1. By volume
2. By value
3. By a combination of both value and volume.
So what are the pitfalls when forecasting sales?
1. Make sure your forecast is based on verifiable,realistic and unbiased info.
2. Don’t be tempted to overlook your study if it showed bad results.
3. Don’t make projections solely on historical results. Put your business under a microscope – try and imagine what might have an effect on your sales in the future – good or bad.
4. Make sure you understand your capacity limits. Can you produce the amount of sales being forecast with the equipment,personnel and monetary resources available to you?
5. Does the pricing policy you have used in working out your sales forecast relate to what is really achievable?, or conversely, have the prices been set too low or too high so that either way your forecast is potentially unrealistic?
6. If you have just started up in business, your business may take longer than you believe to get established, and have you set accordingly realistic sales targets?
7. Have you allowed for the possibility that high sales based on an initial promotional surge may drop off, leading to a need for more intensive marketing and higher ongoing expenses once preliminary interest has peaked?
8. When you make clear your sales forecasts to prospective investors – are they believable?