Professional Documents
Culture Documents
Market research will tell if there’s an opportunity to turn my idea into a successful business. It’s a way to gather information about
potential customers and businesses already operating in my area. So it is a good idea to use that information to find a competitive
advantage for my business.
My business plan is the foundation of my business. It’s a roadmap for how to structure, run, and grow a new business. It is a good idea
for using it to convince people that working with me — or investing in my company — is a smart choice.
u Fund my business
My business plan will also help me figure out how much money i will need to start my business. If I don’t have that amount on hand, I
will need to either raise or borrow the capital. Fortunately, there are more ways than ever to find the capital I need.
A business location is one of the most important decisions I will make. Whether iam setting up a brick-and-mortar business or
launching an online store, the choices I will make could affect my taxes, legal requirements, and revenue.
The legal structure i choose for my business will impact my business registration requirements, how much I pay in taxes, and my
personal liability.
u Choose my business name
It’s not easy to pick the perfect name. I will need one that reflects my brand and captures my spirit. I will also want to make sure my business name isn’t already being
used by someone else.
u Register my business
Once I’ve picked the perfect business name, it’s time to make it legal and protect my brand. If iam doing business under a name different than my own, i will need to
register with the federal government, and maybe my state government, too.
i will use my employer identification number (EIN) for important steps to start and grow my business, like opening a bank account and paying taxes. It’s like a social
security number for my business. Some — but not all — states require to get a tax ID as well.
Keep my business running smoothly by staying legally compliant. The licenses and permits I need for my business will vary by industry, state, location, and other
factors.
A small business checking account can help me handle legal, tax, and day-to-day issues. The good news is it’s easy to set one up if i have the right registrations and
paperwork ready.
u Before starting to talk about the next topic, you need to know that before starting
your own business, you should think about what you may face while preparing your
business and what kind of obstacles that may face you.
Here we are to the next topic!
What obstacles do you face in
business?
Being able to predict customer trends, market trends etc. is vital to a changing economic climate, but not every CEO has Warren Buffett-like predictive powers. Bringing in a consultant
trained in reading and predicting those all-important trends could be the difference between a bright future and a murky one.
u Financial management
Many CEOs I know are ideas people; that means they’re great at the big picture and disruptive thinking, but less good with things like cash flow, profit margins, reducing costs, financing,
etc. Small and medium businesses may not require a full-time CFO but would do better to employ a financial consultant who can step into the role as needed.
u Monitoring performance
Using a meaningful set of rounded performance indicators that provide the business with insights about how well it is performing is key. Most business people I know are not experts in
how to develop KPIs, how to avoid the key pitfalls and how to best communicate metrics so that they inform decision-making. In most cases, companies rely on overly simple finance
indicators that just clog up the corporate reporting channels.
As markets and technologies shift, so do rules and regulations. Depending on your industry, it can make much more sense to bring in a consultant to help with these areas rather than
trying to understand the complexities yourself — and risk fines or worse for non-compliance.
u Competencies and recruiting the right talent
Again, a small or medium-sized business might not need full-time human resources or recruiting staff, but during peak growth periods, finding the right people and developing the right skills and competencies is the
key to a sustainable future. Bringing in a consultant with the expertise to find exactly the workers you need would be a wise investment.
u Technology
As technologies change practically at the speed of light, companies need to innovate or be left behind — but many CEOs started their careers and businesses before many of these technologies even existed!
Consultants can be vital for integrating new technologies, in particular mobile, app development, and cloud computing.
u Exploding data
Grandpa’s generation certainly didn’t have to deal with terabytes of data or worry about what to do with it. 90% of the world’s data was created in the past two years and managing, keeping safe and extracting
insights from the ever-increasing amounts of data your company produces needs to be in the hands of a qualified professional who can help to get the most return from that data.
u Customer service
In a world of instant gratification, customers expect instant customer service — and can take to the web to share their displeasure at less than satisfactory service just as quickly. Consultants can find ways to
improve customer service and bring it into the 21st century.
u Maintaining reputation
In a similar vein, because customers can voice any displeasure so much more publicly and loudly than ever before, businesses have to monitor and maintain their online reputations. And while it’s an important task,
it’s one best suited to a third party who can monitor and mediate with a certain amount of distance.
Early adopter or late to the game? Consultants can help CEOs determine when to embrace change and when to stay the course. Not everything new is better, yet eschewing every change runs the risk of becoming
obsolete. A professional outside opinion can make all the difference in these decisions.
We are living in an era of constant change for the foreseeable future: change is the new normal. Preparing for and embracing that change by investing in the right kind of advice is the best way to meet these
challenges head-on.
Needed budget for a business
Creating a budget is the only way to see if you’re spending money the way
you thinkyou are. Not sure where to start? We’re here to help, with
(hopefully) the only guide you’ll ever need for creating a budget for your
business.
What is a business budget?
These are all your regular, consistent costs that don’t change according to how much you make—things like rent, insurance, utilities,
bank fees, accounting and legal services, and equipment leasing.
These change according to production or sales volume, and are closely related to “costs of goods sold”, i.e. anything related to the
production or purchase of the product your business sells. This might include raw materials, inventory, production costs, packaging, or
shipping. Other variable costs can include sales commission, credit card fees, and travel. A clear budget plan outlines what you expect
to spend on all these costs.
The cost of salaries can fall under both fixed and variable costs. For example, your core in-house team is usually associated with fixed
costs, whereas production or manufacturing teams—anything related to production of goods—are treated as variable costs. Make sure
you file your different salary costs in the correct area of your budget.
One-off costs fall outside the usual work your business does. These are startup costs like moving offices, equipment, furniture, and
software, as well as other costs related to launch and research.
This is all the money travelling into and out of a business. You have positive cash flow if there is more money coming into your business
than going out, over a set period of time. This is most easily calculated by subtracting the amount of money available at the beginning
of a set period of time and at the end.
u Your profit
Profit is what you take home after all your expenses are deducted from your revenue.
Growing profits mean a growing business. Here you’ll plan out how much profit you plan to
make, based on your projected revenue, expenses, and cost of goods sold. If the difference
between revenue and expenses (aka “profit margins”) aren’t where you’d like them to be,
you need to rethink your cost of goods sold, and consider raising prices.
Or if you think you can’t squeeze any more profit margin out of your business, consider
boosting the Advertising and Promotions line in your budget to increase total sales.
u A budget calculator
This is a helpful tool to see exactly where you stand when it comes to your business budget
planning. It might sound obvious, but getting all the numbers in your budget in one easy-to-
read summary is really helpful.
In your spreadsheet, create a summary page with a row for each of the budget categories
above. This is the framework of your basic budget. Then next to each category, list the total
amount you’ve budgeted. Create another column to the right—when the time period ends,
use it to list the actual amounts spent in each category. This gives you a snapshot of your
budget that’s easy to find without diving into layers of crowded spreadsheets.
𝗕𝘂𝗱𝗴𝗲𝘁 𝗖𝗮𝗹𝗰𝘂𝗹𝗮𝘁𝗼𝗿
The main budgeting factor for ecommerce is shipping. Shipping costs (and potential import duties) can have a huge impact.
Do you have space in your budget to cover shipping to customers? If not, do you have an alternative strategy that’s in line with your
budget—like flat rate shipping or real-time shipping quotes for customers? Packaging can affect shipping rates, so factor that into your cost
of goods sold too. While you’re at it, consider any international warehousing costs and duties.
You’ll also want to create the best online shopping experience for your customers, so factor a good web hosting service, web design,
product photography, advertising, blogging, and social media into your budget.
u Inventory businesses
If you need to stock up on inventory to meet demand, factor this into your cost of goods sold. Use the previous year’s sales or industry
benchmarks to take a best guess at the amount of inventory you need. A little research up front will help ensure you’re getting the best
prices from your vendors and shipping the right amount to satisfy need, mitigate shipping costs, and fit within your budget.
The volume of inventory might have an effect on your pricing. For example, if you order more inventory, your cost per unit will be lower, but
your overall spend will be higher. You need to ensure this is factored into your budget and pricing, and that the volume ordered isn’t greater
than actual product demand.
You may also need to include the cost of storage solutions or disposal of leftover stock.
When creating custom ordered goods, factor in labour time and cost of operations and materials. These vary from order to order so create
an average estimate.
u Startups
Budgeting is tricky for startups—you rarely have an existing model to work from. Do your due diligence by researching industry benchmarks for salaries, rent and marketing costs. Ask your network
what you can expect to pay for professional fees, benefits, and equipment. Set aside a portion of your budget for advisors—accountants, lawyers, that kind of thing. A few thousand dollars up
front could save you thousands more in legal fees and avoid inefficiencies later on.
There’s obviously a lot more that could be said about creating a budget for a startup. This guide from The Balance is a great start.
u Services businesses
If you don’t have a physical product, focus on projected sales and revenue, and salaries and consultant costs. Figures in these industries—whether accounting, legal services, creative, or
insurance—are much more of an estimate, which means budgets need flexibility. These figures are reliant on the number of individuals needed to provide the service, the cost of their time, and
fluctuating customer demand.
A business budget template can be as simple as a table or as complex as a multi-page spreadsheet. Just make sure you’re creating something that you’ll actually use.
Create your budget yearly—a 12-month budget is standard fare—with quarterly or monthly updates and check-ins to ensure you’re on track.
Here are some of our favourite templates for you to plug into and get rolling.
The Balance has a clear table template that lists every budget item, the budgeted amount, the actual amount, and the difference between the two. Use this one if you’re looking to keep it
simple and straightforward.
Capterra has both monthly and annual breakdowns in their Excel download. It’s simple but thorough, and fairly foolproof.
Google Sheets has plenty of budget templates hiding right under your nose. They’re easy to use and they translate your figures into clear tables and charts on a concise, visual summary page.
Smartsheet has multiple resources for small businesses, including 12-month budget spreadsheets, department budget templates, projection templates, project-by-project templates, and startup
templates. These templates are ideal if you’re looking for a little more detail.
Scott’s Marketplace is a blog for small businesses. Their budget template comes with step-by-step instructions that make it dead simple for anyone.
Vertex42 focuses on Excel spreadsheets, and offers templates for both product-based and service-based businesses, as well as a business startup costs template for anyone launching a new
business.
u Making a budget is kind of like dreaming: it’s mostly pretend. But when you can start pulling on
accurate historical financials to plan the upcoming year, and when you can check your budget
against real numbers, that’s when budgets start to become useful.
u The only way to get accurate financial data is through consistent bookkeeping.