2000 Three Step Business Plan Development
STRATEGIC PLANNING
Step One
Strategic Plan or WHAT do I want
The Dream Phase
Spend x minutes verbalising the things you wish you could do in the next 12 months if there were to be no constraints on you at all
- where do you want to live
- how many hours a day do you want to work
- do you want your business to expand
- do you want to start something new
- is there a "community" aspect you want to develop
- do you want a greater monetary return
- do you want to reduce your liabilities
- do you want to purchase a major asset
- do you want to have a cash reserve
- do you want to train someone else to join your business
- do you want to travel more
- do you want to spend more time at home/ with family/ with friends
- do you want to put more energy into your business
Rate the things you want to achieve in order of preference - there may be some you don't even want to include.
Wake up call -
So now you know what you are aiming for in the next year:
- Reduce debt
- Increase time away from the office
- Purchase a new car
- Start training someone to share the tasks
This is your strategic plan in principal.
Step Two
The Business Plan or HOW I achieve what I want
The Hard Part
Use this chart to predict your income. There is no point in this exercise if you are not ruthlessly honest - always tend to underestimate. Don't try and impress anyone, if you are not sure of an income stream, assume it won't happen. By the same token assume your expenses will be more than you guess. Remember that this is a PLAN only, it is to guide you not to constrain you.
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INCOME |
Description |
How much per annum |
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How much reserves do I have now (ie uncommitted funds) |
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Your main income |
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Regular streams |
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Things you expect to be paid for but they may not happen |
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Anything else |
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Therefore I have this much to spend: |
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EXPENSES |
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How much do I owe now eg overdraft, |
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Regular things you are committed to paying: |
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Tax liabilities |
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Repayment of debt |
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Assets to be replaced |
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New developments to be undertaken |
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How much do I want as a reserve at the end of the year |
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Therefore I need this much money to spend this year |
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FINAL OUTCOME |
Take the amount you want to spend from the amount you will receive: |
This exercise should have helped you identify the likelihood of your being able to implement your Strategic Plan.
Step Three
The Budget ; Or WHEN I can do what I plan
Making it happen
Think carefully about when your income is received. If it is monthly then draw up a calendar with income allocated evenly. If there is a seasonal spread, think through which months you WON'T be getting as much as you usually anticipate.
Now look at each line of expenses. Spread out the monthly ones, allocate the ones you know (like tax) and see which months you will have a bit left over. When these accumulate is the time to start planning repayment of debt or purchasing assets. Don't forget to allow for contingencies such as staff leaving (you have to pay out holiday pay and pay the cost of hiring or leasing staff), equipment breakdowns etc.
IMPORTANT NOTES
Don't forget that a budget is simply a tool which allows you to see what you have planned in a spread out format. Don't let it become a straightjacket which stops you operating efficiently and effectively.
Make your Strategy/business plan/budget work FOR you, don't be afraid to change it if there is a better way to do things or if an opportunity presents itself.
Summary by B Irvine
Adminstration Manager
ISOCNZ
© 2000 The Internet Society of New Zealand
Last updated 22 December 2000
