Charting the Course – Business Plan Development & Research

As it is necessary to understand the direction and strength of the wind, before sailing, one must know the contrary winds in business. Charting a development strategy for a large or small business requires detail information about the competition. Too many entrepreneurs launch out with a dream, but never bring it down to the real world where men, women and children make the decisions “to buy or not to buy.” What are the qualities and flaws of the competitive products or services? Where and how are they sold? What are the prices and discounts? Who sells them? The provider’s reputation, financial strength, history and sales staff provide important clues to the nature of competition a product faces. The best ways to research include:

· Search the Internet for information, critiques, or evaluations of your competitors;
· Purchase the product or service for your personal evaluation;
· Find out what potential consumers think about it;

Getting this information requires a bit of work and research. Visit the competitor, interview their customers, sit in a place where you can observe the operation, and keep records. Who’s buying? What are they buying? At what price? Always look for any wrinkles in the competitor’s operation.

Once you have drawn a picture of the competitor, compare your own business plan to that. What advantage does your business strategy, location, products or services have over the competition? In particular, consider the pricing. Can you compete on price? If your goods are higher in price explain why. You may succeed with higher prices, but there will have to be reasons why people will pay more for your products. The aesthetics of the store, the nature of a guarantee, the skills of the sales staff and other features make be an attraction. How does your business compare to the competition? You want to compose your strategy based on the competition. All of this information will give you a clue to the potential you have of beating the competition. If you can beat the competition you have a better chance of being the business to survive.

Simple Accounting For The Small Business – Bookkeeping Using A Simple Spreadsheet Template

Starting a small business out of your home, offering products or services like business consulting, photography, selling on the web or a MLM? You are now faced with tracking all your expenses and revenues for your business and you certainly don’t have the money yet to engage a bookkeeper or accountant. If your business is a sole proprietorship, whether it be a Canadian Proprietorship or a US-based Proprietorship, you do not require an accountant to submit your company financials (books) to the IRS (USA) or Revenue Canada). Your business revenue and losses are reported as part of your annual personal income tax. For this small business start-up, you won’t need to buy fancy accounting software, like Quick Books or AccPac to track your business.

Only as part of incorporating Bizfare Enterprise Inc in 2005 was it a requirement to engage an accountant. My accountant did insist on using Quick Books software for my business accounting. Up until then using a simple spreadsheet template served my business accounting needs for over ten years. This simple spreadsheet accounting stood the test of multiple audits by Revenue Canada (CRA and Revenue Canada Goods and Services Tax. Both the hardcopy columnar pad and an electronic spreadsheet version of my financial books were accepted by Revenue Canada. (BTW the audits disclosed more ways for me to claim back additional taxes for the previous three years! Now that’s my type of audit!)

In your new start-up business venture, you likely will generate somewhere between 10 to 30 accounting transactions per month. These transactions would be items like Expense, Revenue (sales), Liability (Loan) type transactions and Sales Tax (Federal + State/Provincial) Collection/Deductions. These transactions are further broken down into various Business Accounts. All the Accounts you set up for your business is called a Chart of Accounts. Recording your business financial transactions (Journal Entries) can be executed with pen and ink on an accounting columnar pad or electronically with your computer using a spreadsheet program (MS Excel, Open Office, Star Office).

Whether you employ electronic or hardcopy media, you need to develop a simple Journal template to create your Business Synoptic Journal. This Synoptic Journal format has the advantage of allowing you a complete view of all your individual journal entry transactions against all your various Business Accounts. Creating this Synoptic Journal is easier to do than you think and requires no prior accounting or bookkeeping knowledge.

TIP #1: You could further reduce the accounting line items (Journal Entries) by consolidating like items such as ‘all the Sales for the month’ and ‘all parking receipts for the month’ into one totaled line item for the month.

Where do you start to identify the various Business Accounts required for your Synoptic Journal?

If you currently work for a company or government, secure of one of their employee expense forms. Look at each of the areas identified as expenses – meals, mileage, hotel accommodations, taxi, car rental, telephone & cell phone, air fare, office supplies, etc. This is an excellent place to identify the various Business Expense Accounts you need to set up for your business accounting books. To complete your business Chart of Accounts, include a Business Bank Account, Sales, COGS (Cost of Goods Sold), Sales Tax Collection, Marketing Expense and others as required. Each of these Accounts will be a listed as a title across the top of each column of your Synoptic Journal. Each row (line item) will be the individual journal transactions entered by you. The journal transactions are grouped and summarized for each business month; usually, January through December.

So your Synoptic Journal would look something like this Sample Synoptic Journal at http://picasaweb.google.com/carl.chesal/BookkeepingTemplate.

The column headings might be in this order (from left to right):

DATE | DESCRIPTION | BANK DEPOSITS | BANK WITHDRAWALS | SALES REVENUE | COGS | SALES TAX COLLECTED & REMITTED | OFFICE SUPPLIES EXPENSE | EXPENSE #2 | EXPENSE #3 | ETC

TIP #2: Unless your business is Incorporated or an LLC, you don’t need to go through the expense of opening a business account with your bank. Usually Business accounts charge a higher monthly fee, charge for printing checks (cheques) and don’t offer any interest on your monthly account balance. Instead, open a separate personal bank account (maybe savings). This will show the ‘taxman’ that you are keeping the business separate from your personal banking. Remember you are a sole proprietor and all your business income (and losses) are to be applied directly to your personal income tax submission ( a s per IRS and CRA).

To save you time and make is very simple, I have already created a simple spreadsheet Synoptic Journal template that performs all the calculations for each month and rolls up the 12 business months so it can easily be included in your annual personal income tax preparation. This Synoptic Journal template has Debit/Credit checks and balances, tracks sales taxes, mileage and totals each account for your entire fiscal year. If you want this FREE Bookkeeping template, you can get it at Communicate Innovate. With a few key strokes, which will help identify yourself, I will gladly send you this FREE Synoptic Journal Template and also any future Small Business Tips.

TIP #3: One Rule of Accounting is that every time you record a journal entry (line item which applies the transaction against the appropriate business accounts) the Debits and Credits MUST REMAIN EQUAL at ALL Times. This Debit Equals Credit calculator is built into this FREE Bookkeeping Template. When you have completed entering a line item (journal transaction), check to ensure that the amount the the Debit cell equals the amount in the Credit cell. If they are not equal, you have not entered the amounts properly in your journal transaction. Correct the problem before entering your next journal entry.

You are now equipped to capture your business financial books with some simple accounting software. Happy bookkeeping! And Happy Selling!

4 Steps To Building an Organization Chart

An organizational chart is the first building block for setting your small business up to be highly productive, effective, and organized. The process of completing the chart need not be complicated, and this article will show you how to build one in just 4 easy steps.

What is An Organization Chart?

An organization chart has several uses within a business. It helps lay the groundwork for reducing the chaos amongst employees, increases communication effectiveness, and shows what needs to be done within the organization on a day-to-day basis. An accurate and complete organization chart should be visible within the business on all levels, available to outside customers and potential customers, and outline the following:

  • What needs to be done in the business (Functions)
  • Who is going to perform those functions (Responsibility)
  • The clear accountabilities for the business functions
  • How communications should flow within the organization

Although it may seem like an organization chart only makes sense when there are several people within the business, it is beneficial to prepare one even if there is only employee (as 80% of small businesses are). This allows for future growth within the organization by determining the desired business structure and it identifies where gaps need to filled. When the chart is built taking into consideration the skill levels and competencies required in each function, one may notice that new people will be needed to fill those roles more effectively.

The 4 Steps to Building an Organization Chart:

Step 1: List all of the tasks that are completed within your business.

Take a sheet of paper (notebooks or spreadsheets work well too) and list every task that is performed in your business on a day-to-day basis, weekly, monthly, etc. Make sure not to combine any tasks and that each task can stand on its own. An easy way to make sure you capture every task is to give yourself at least a week to compile the list, and jot down each task as you perform it throughout the day. If you have employees, have them perform the same exercise, then combine the lists.

Step 2: Identify the function that each task listed will fall under.

Next to each task that you have listed, classify the task according to what group or role would be responsible for completing it, ensuring that you only assign one function to each task. Common business functions include:

  • Owner/CEO
  • Administrative
  • Finance
  • Marketing
  • Sales
  • Quality Control/Assurance
  • Operations
  • Human Resources

Step 3: Determine the reporting relationship between the functions.

For each function that you have identified, determine how the functions will report to each other. There should be only one function (typically the CEO/Owner) who drives the organization, and this role will be placed at the top of the organization chart. Next, identify who will report to the top function and how the other reporting relationships will be set. Draw a line to connect those related functions. Every function should have only one role that they report to, however, several functions may report to the same function above it. (For example: Quality Control and Administrative report to Operations)

Step 4: Identify the individual within your business that will fill each function/role.

Now that the functions have been identified and it has been determined which functions will report to which, the last step of building your organization chart is to identify the person within your business that will fill each role. Think about the skill levels and competencies required within the function and who within your business has the background that matches these requirements. At times, there will be no perfect match and functions will have to be filled with available personnel until future hiring decisions are made or additional training is conducted. Keep in mind that these scenarios will often affect productivity and efficiency in the role and the business as a whole, and should be noted as gaps that need to be filled when possible.

A caution to business owners that “wear many hats”: The more times that a name appears in an organization chart, the less effective, efficient and productive that business is.

Your chart is now complete!

There are templates and samples available to assist you with building your organization chart easily and at low-cost. Several are available within the Microsoft suite including Excel and Word, and Mac offers tools within Pages, Numbers, and Keynote. Other organizational chart software and resources available to help include:

Take the first step to producing a highly organized, effective, and productive business by completing these 4 easy steps to build your organization chart, and you will find that your business runs more smoothly and is set for additional steps to move your business forward.

Success in a Home Business – Goal Setting

One of the most important pieces of the puzzle however is really easy and can be a whole lot of fun if you let it. Setting goals.

Ask yourself what is the most important thing you want to achieve by having a home based business, then create a blueprint for success and follow through on your short-term and long-term goals; make sure to complete certain projects by a specified date.

Pay attention to every detail of your business and what you want to have in place so that you can move on to the next phase of setting up your business.

The best way to start with your goals is to look at the short term. Look at the next 6-12 months and write out everything that you want to accomplish in that time frame.

Some of your short term goals should focus on the kind of money you plan to make within a particular time frame and what kind of marketing best supports that financial goal. Long-term goals should focus on the longevity of time devoted to working your business and continued financial profit.

If you plan to replace your day job with a home-based business, chart on a calendar your target goal date. More often , we tend to put our dreams on hold to accommodate major life changes; marriage, family, career changes and physical health.

However, these life changes such as those just mentioned should serve as a catalyst to initiate a career change in our lives through a Home-Based Business; thus making it easier to focus on marriage, family and health.

Once you have established your goals, use a Daily Reminder and “Things To Do Today” to help keep track of what you have done and how far you have to go. This will help you stay focused.

Using personal motivators such as photos of things you want like a new home, new car, or exotic vacation as pleasant reinforcers can help you through the mental and physical process. Mental; to give you something to think about; physical to give you that extra push when you feel discouraged.

By doing all of these things you will have a clear view of what your goals are in your home based business and knowing WHAT you’re doing is nowhere near as important as knowing WHY you’re doing it!