A financial business plan for a small business

Course

Date

Expanding your Business

A Financial Plan for a Small Business

A budget may be a broad assessment of an investor’s current and future economic status by employing established variables to estimate future cash flows, withdrawal plans and asset value. Generally, people develop financial plans by the assistance of a financial planner whereby they use the present net worth, asset allocation, estate plans, tax liabilities also future retirement benefits in establishing these commercial programs. Therefore, with an economic policy individual are able to plan the longer term and achieve the spending and saving goals with ease. Moreover, a financial plan is defined as the main element of any business. It explains the actions of the business directly. For instance, it elaborates what’s affordable in the commerce, how it can afford to do it as well as what are the estimated profits. Thus, having a financial plan for a small business is significant to acknowledge whether it is advisable to continue with the company or not.
In developing a financial plan for a small business, a person should consider the following elements:

• Approximate the start-up costs for beginning a new business
• Formulate a list of the current assets and liabilities
• Compute the net worth
• Arrange the financial records
• Track the income and expenditure or cash flows
• In case of applying for a loan, include the federal tax return for the previous year
• Set new projections for the existing business

Guerilla marketing strategy for a small business

A Guerilla marketing strategy is an advertising policy model designed for small companies to uphold their goods and services eccentrically with little budget to spend (Creating a Successful Marketing Strategy for Your Small New Business 110). In developing a guerilla marketing plan, the following steps should be followed:

Define who will be the person to market the business on daily basis

Under this stage, marketing should be enhanced daily and not on the notion that it is only necessary when the industry is commencing as well as when the need arises. Thus, it is essential to define who will be the best marketer for the business.

Determine the marketing budget

This is the second essential stage in developing a guerilla marketing strategy. Under this phase, many entrepreneurs omit to select a marketing budget and end up spending money without acknowledging the profits. Therefore, in creating a guerilla marketing plan, it is wise to define the marketing budget for expenses to avoid misuse of finances for the additional needs.

Choose the marketing tools in advance

It is essential to do a prior research and decide the best choices to reach the customer targets rather than just getting what is offered by the salesperson. In so doing, it will help in achieving successful marketing/ advertising and cover a wide range of the customer target.

Retain a marketing calendar

A simple diary of marketing determinations will aid in keeping record of spending and results. It is because as the business grows one can be in a position to predict the seasons in which the industry perform well and keep the records to estimate the results.

Construct a system to allow marketing

The investment of money as well as time will be necessary for running a business. Thus, it is obligatory to enable in make it happen by developing a plan as well as dedicating the resources essential to make the company successful.

Execute, Execute, Execute!

This is the sixth critical step in developing a guerilla marketing strategy. Individuals can have a good marketing plan but fail to implement it accordingly. Thus, it is necessary to note that action is the determining factor for a successful marketing plan.

Track the effectiveness of the plan

Under this phase, it is essential to identify what is working over the first quarter months of the year, what is most efficient, how much is being spent on a new customer or sale as well as what are the buying policy and their effectiveness in the market. Therefore, tracking new customers is necessary and keeping in mind that marketing efficiency is a long-term dimension.

Refine and Improve

This is the last step in developing a guerilla marketing strategy. Under this stage, people should look at their efforts and adjust appropriately. For instance, they can look at what is happening and how can it improved since business achievement is not a matter of providence but preparation and action combination.

Location for a second store

Second stores can be initiated when the location of the first store is not appropriate for the business. Thus, no many sales transacted by the industry. Another reason for establishing the second outlet may result when the first store is already making good profits, and the investor feels like the employee system and repair process is ironing out. Therefore, considering such reasons, it is appropriate to think of the second store. On the other hand, in establishing a second shop, finding a suitable location is the essential subject. In discovering the appropriate site, the following things should be considered. First is acknowledging the market position. This step is crucial since setting a business with the know-how of the customers, competitors and selling products will enable the second store to prevail more than the first shop.
The other thing to look at is the assessment of the market position. Here, the second store should be situated in after examining the demographics of the area as well as the laws and regulations governing the field and do a trade area analysis. Lastly, in considering a location for a second store, identification of alternative sites is necessary as well as finalizing decision making. Thus, according to my reasoning, the most appropriate place for a second shop should be in a different locality from the first store. Also, it should be in a better geographic and demographic region than the first workshop. Therefore, considering the above discussed it is suitable to find and commence a second store in expanding the business.

Steps for securing sources of debt financing for a second store

Debt financing consists of borrowing funds from creditors with the anticipation of repaying the borrowed funds plus interest at the specified time. The following is a plan for securing sources of debt financing for the second store.

• Recognize the financial needs
• Know what financiers look for and assess the state
• Discover support in helping investors get ready to apply
• Comprehend the debt financing basis
• Find the most appropriate sources
• Check requirement and commence compiling documents
• Submit the application

Necessary activities and critical decisions to start a small business

When starting a small business there several vital decisions needed to be considered. They include savings, health insurance, financing, type of the industry as well as the site. First discussed will be savings. In commencing a little commerce, an entrepreneur requires considering the amount of savings since businesses do not turn profits immediately after commencement. A properly and well-analyzed business plan will aid in determining whether the savings will last enough until the industry becomes profitable. Secondly, it is essential to reflect on the health insurance policy to cover for any health emergencies in case they emerge, and the business has not yet started reaping back profits neither paying off salaries.
On the other hand, in starting a small business, it is advisable to consider the methods of financing employed to support the commerce or if the entrepreneur do not have the start-up capital. A person is required to look for a favorable way to finance the business such borrowing a loan from a bank if they have the necessary qualifications or using debt financing. The other primary decision to consider in commencing a small business is the type of trade intended to be implemented. It is advisable to choose the best business type to transact. One may start the business from scratch or buy an already existing one. This will contribute to acknowledging what business one matches to and negotiating it will be much easier and comfortable. The last crucial decision to look at when starting a small business is the site. Here, a person is required to search for a suitable location where the company will work out correctly to acknowledge its success. Therefore, in considering the above necessary activities and critical decisions, it will be easier to commence a small business and take it to greater heights.

The critical financial management considerations in operating a small business

Financial management is known as the effective management of funds in such a way that the goals and objectives of an organization are accomplished. Through financial control, it is easier to understand whether the business is making profits or not. Under the financial management, it is essential to consider the following in operating a small business. First, it is essential to recognize a business plan for the business (Kennedy 60). It will aid in identifying the best steps, to begin within operating the business. The second issue is on being positive and realistic in the management of funds. Here, it is appropriate for the entrepreneur to make practical values when calculating the estimated benefits of the firm. Also, it is necessary to have realistic timelines. By considering schedules, a person will be in a position to plan themselves accordingly to achieve the targeted goals. Through the aid of financial management, it is essential to look for better financing methods in operating a small business. For instance, if an option for financing the firm is made via a loan, it is good to consider what ways repayments should be made to maximize the profits at the same time. Thus, considering the above discussions made it will be easier to calculate the earnings of the operating business.

The role of pricing, credit and Equity financing

Pricing is the method by which a firm uses to set its selling price. The role of pricing in defining business strategy is aiding the business in formulating a plan through which the seller will discover the current market prices of the competing products and look for a better pricing plan which will outdo their customers. Credit financing is the method in which business get financed through loans. The role of credit financing is to support businesses by borrowing funds in the form of a loan and paying back the borrowed money at the specified time with the quoted interest to extend the business operations. On the other hand, Equity financing is a form of investment whereby the shares of a firm are sold to potential buyers and then buy back by the business after the progress is discovered. It is a right way of financing businesses since a person cannot have the required amount to start a business, but with equity financing, the shares can be sold and bought once more to manage the business operations.

Issues in small business management

In handling a small business, sometimes it can tend to be hectic due to some problems such as tax, health care, lending and skilled worker shortage. Many small businesses are afraid of the significant tax burden imposed as the personal tax rate. It is a challenging issue because no much profit is made from the small businesses and when the tax burden is levied as own rates it oppresses the small business entrepreneur. The other concern is on health care. This is because in managing small businesses health care is uncertain and no health policy is covered to those working on the little firms. Lending is also a critical issue in operating a small business. Many small firms are not considered to borrowing of loans due to the bank’s policy regarding the lending requirements. Thus, a majority of small business are disadvantaged due to the disqualification of lending strategy forming a challenge to the management of small businesses. Therefore, in managing and expanding a small business, the above-discussed concepts should be focused on the achievement of the set objectives.

Work Cited

"Creating A Successful Marketing Strategy For Your Small New Business." Choice Reviews Online, vol 48, no. 05, 2011, pp. 48-2787-48-2787. American Library Association, doi:10.5860/choice.48-2787.
Kennedy, Jessica et al. "Financial Management Practices In Small Businesses: Regional And Metropolitan." Small Enterprise Research, vol 14, no. 1, 2006, pp. 55-63. Informa UK Limited, doi:10.5172/ser.14.1.55.