Money

Biting The Bullet On Financials

While there’s no escape from preparing the financial information for a business plan, a step by step approach will help make the task less onerous.

Similar to the overall business plan itself, the financial information should be divided into specific sections to ensure focus and relevance.

It should reflect short-term and long term strategies, be realistic and supported by sound research where applicable.

The data should cover areas such as the current financial position of the operation; forecast cash flow, profit and loss, and balance sheet; break even analysis; sources of finance; capital requirements; timing and stages of finance; and fixed asset requirements.

Much guidance can be gleaned from the numerous books and software packages that are available, together with professionals, such as your RAN ONE accountant, who specialize in the field.

However, you can’t escape from doing some of the hard yards yourself.

The more involved you are in the process (of gathering and presenting the financial information), the more ownership and control you have of the operation, says Richelle Moran, small business development specialist.

The financial section of a business plan all comes down to dollars and cents, according to a spokesperson from the Faculty of Business and Economics at Monash University in Melbourne, Australia.

“It is all about cash flow … one of the biggest problems for business is running out of cash,” he added.

To make a start, you need to do some “brainstorming” to identify the key financial information relevant to your operation and list these as sub-sections.

The next step is to gather the information, including tangible evidence to support projections, under the appropriate sub-headings.

At this stage, putting pen to paper and organizing the information in point form is advised.

This provides a basic framework from which to flesh out the information in more depth.

Moran warns that you have to be realistic in your projections and note that it is often safe practice to err on the conservative side.

According to Moran it is common for businesses to overestimate income and to underestimate expenses.

“It sounds obvious but it is not that obvious when you are doing it,” Moran said.

Pickett recommends a hard-nosed and independent “reality and credibility check” by an experienced person, such as your RAN ONE accountant, who stands outside the business and is not emotionally involved to objectively review the projections

“Listen carefully to their feedback without being defensive or trying to ‘sell’ or convince them that the projections are achievable,” Pickett says.

He noted that sudden increases in sales or other revenue projections relative to historical levels may be based on unrealistic assumptions or expectations.

Business should ruthlessly apply the 80/20 rule in which they focus on accurately forecasting the few “big ticket” items (the 20 percent) that usually account for most of the revenue and most of the costs (the 80 percent).

It is also important to distinguish clearly between financial profit and loss projections and cash flow projections.

The profit and loss statement is necessary to ensure your business is making acceptable profits; the cash flow statement shows whether or not cash is available to cover the timing differences between paying expenses and being paid for goods and services provided.

Another tip from Pickett is to clearly identify what, and for how long, additional funding will be required.

Also, it is good practice to have two sets of projections covering both the bearish and bullish ends of the spectrum.

While it is motivating to set challenging hurdles to achieve, it is also important to recognize the potential minimums.

Pickett says it is important to ensure that your team members responsible for achieving projections are committed and have been involved in the planning process in some way.

Devising simple performance measures can help provide early indicators of future trends and outcomes. These can include the number of quotations made or the value of forward orders.

As part of your financial blueprint, you also need to have some form of contingency plan for any unexpected event that may impact adversely on your operations.

Equally important is a plan for where to obtain emergency cash.

Moran cites the increasing cost of insurance premiums as an area often overlooked when gathering financial information.

“In such volatile times as these, it is important to get quotes for what it is going to cost for insurance for the next 12 months,” Moran says.

“It is no good just adding 10 percent to the previous year’s premiums.”

One of the problems facing some small to medium sized businesses is that they do not have the resources to employ the financial expertise required.

Some owners try to be jacks of all trades but are masters of none.

Money spent on professional assistance should be viewed as an investment in the future.

A sign of a good business plan, and that includes the financial information section, is one that is dog-eared and full of scribbled notes.

It proves it is used regularly and reviewed.

Article courtesy of RAN ONE: http://www.ranone.com/press_room/news.asp?ID=3868

speaking

Make Your Next Presentation A Great One

It happens every so often – you’re called upon to give a presentation and suddenly stage fright begins. Relax. There are lots of things you can do to make your next public speaking job a winner and once you’ve learned them presentations will never be a problem again.

Start preparing for the presentation by making an outline of every point you want to make. Think about any questions that may arise in the minds of the audience and be sure to answer them all. If you’re going to make an assertion, back it up with facts.

Next, turn the outline into a speech. It has to flow smoothly from start to finish and be appropriate for your audience. Imagine yourself having a conversation with a member of the audience to whom you want to communicate everything in your outline.

The best presentations are made naturally, as if it were a one-on-one discussion speaking as you usually do. This helps your self-confidence and avoids the danger of sounding pompous or artificial. End a sentence with a preposition if you usually do. The people out there want to hear you, not a textbook.

The word “you” is magic one. It’s always a good idea to involve the members of your audience on a personal level, and wherever possible work them into the presentation you’re making. “You wouldn’t want that to happen” is a lot better than “One wouldn’t wish that to happen”.

Part of any successful presentation is gaining and keeping your audience’s attention. This is done by creating interest and being entertaining, all of which means that your speech has to contain some elements that will be news to your listeners.

Plan a beginning that’s interesting. Start with a question or a statement that will immediately gain your listeners’ attention. You may have 45 minutes of presentation time but your audience will make up their minds about you in the first minute or less, so get off to a good start.

The central part of your presentation will be where you communicate the bulk of your information and take your audience step-by-step towards your conclusion. Keep the pace moving right along and refer back to your central theme as often as you can.

As you work through your speech identify those areas where visual or other aids will be needed. A well-constructed graph can be worth a thousand words of explanation, and for dramatic effect a vivid photograph can really help make a point.

Begin a buildup as you approach the end of your speech. The end has to be as strong as you can make it, drawing the audience to the point you want them to reach. Go through a quick recap of your main points and give a verbal signal that you’re about ready to end the presentation – “In conclusion…” is often used.

There are several forms you can use to record your notes for the presentation. If you print it out on a letter-sized sheet use large type and at least 1½ spaces between the lines. Better still, have it printed out on index cards that you can flip through as your presentation progresses.

Do not try to read your speech while you’re giving it. These are notes only and you’re going to prepare so well that they’re only useful as reminders, not as a complete script.

If possible visit the venue where you’ll be making the presentation and find out a few important facts. How well can the speaker be seen? How will the audiovisual aids be presented? How effective is the public address system? This information will help you get all the elements right and will also enable you to better rehearse your presentation before you actually make it.

Now it’s time to rehearse. This step is the most important part of ensuring your presentation will be a success. You don’t actually memorize your speech; you learn it through practicing it over and over until it becomes something you know as well as your address or telephone number.

Practice it aloud. Read through your full speech just once, then start using the notes you’ve prepared. If you come to a place where you don’t know what comes next refer back to the full speech, but do this as little as possible. You’ll soon be working off the notes alone.

It will help to have a volunteer sitting in front of you while you’re practicing. This helps you work out such subtle details as your hand movements and your speech timing. Encourage criticism now because you don’t want it when you’re giving the presentation to your intended audience.

When it comes to the real thing you can be confident you’ve learned your material and the presentation will go well. But you’ll probably still be a bit nervous because most people are when it comes to public speaking. Focus on how well you know the material and take some deep breaths. Let your whole body relax from your head down just before going onstage.

Now for a final tip – always maintain eye contact with the audience. Don’t jump around too quickly, but be looking at someone every time you speak. When you’ve reached the end of your presentation thank your audience for their attention and they’ll let you know how well you’ve done.

 

Article courtesy of RAN ONE: http://www.ranone.com/Press_Room/news.asp?ID=3921