Are You Ready For 2008? By Bill Roberts

As New Year's Day approaches, we begin thinking about our New Year's resolutions. But we should also be developing our Business Plan for 2008.

A business plan is a budget created around a set of goals, along with a "plan" which lays out how you expect to achieve these goals.

The process is quite simple but the actual work of creating the business plan can be very complicated indeed.

The process is:

• State your goal.
• Determine what you need to do to achieve your goal.
• Develop a budget to do those necessary tasks.
• Develop a Pro-Forma cash flow analysis for your business AS you realize your goals (step by step), NOT AFTER you realize your goals.
• If the cash flow analysis shows a need for additional capital, say where you expect to get it.
• Now write it up. This is your business plan.

Stating your goal can be as simple as "I plan to do 50% more business this year" or "I am going to hire a staff (or put together a team) so that I can do 50% more business this year." Or your goal can be very specific. You can establish monthly (or weekly) goals for activities and results. "Monetize" these results and commit them to a spreadsheet.

Now you need to think about how you can go about reaching these goals. Specifically what do you have to do to achieve each step along the way? Remember, A journey of a thousand miles begins with a single step (and then another and another and another until you get there). So the first step is very important. You can't take the second step until after you have taken the first step. But then you are on your journey and your goal is in sight.

To achieve your goal you are going to have to do certain things. Maybe you will "hire" people. Maybe you will lease office space. Maybe you will launch a new website and blog. Maybe you will buy a franchise. Maybe you will do all of the above.

It is going to cost you money. You need to "prime the pump." You need to pour money in so that the pump will spew money back out. Detail exactly what you need to spend to realize your goal. This is your budget for change. You also have your "normal" budget for living and doing business. Wrap these two budgets together to create your new budget.

Cash Flow Analysis

If you are actively doing business, you will have income even while you are spending money to grow your business. You need to create an excel spreadsheet to track your income and outgo together. This will be your cash flow analysis. As the money goes out of your checking account or into your checking account there will be a balance. Sometimes this balance will be positive and sometimes it will be negative. By tracking your daily cash flow you will know how much money you will need to implement your business plan. You need to "invest" enough money in your plan to cover all your negative cash flow.

Write It Up

When you write up your business plan, you can use a simple narrative format and include your spreadsheets. Print this document.

Check your progress against your Business Plan on a regular basis. I would recommend doing this at least once a week. This will let you know how you are doing, and it will tell you if you need to make any changes or adjustments to your plan or its implementation.

So as you are making those New Years Resolutions, let your first one be to write your 2008 Business Plan.

If your goals for this year entail building your wealth, establishing a retirement plan that will actually let you retire, or other real estate related activities call Bill Roberts at 619-244-4610 for a consultation.