By Tjitte de Werd at April 18 2019 13:13:09
But your fixed expenses don't do this. They remain the same no matter what sales does. That's why it's call fixed. These are expenses like rent, taxes, utilities, phone, salaries, insurance, etc. A lot of business owners never consider this. They just lump all their expenses together. But you could never make an accurate plan if you combine all your expenses together. If you project your sales higher and want to know what your expenses will be, you have to separate your fixed and variable.
Business plans are mostly about organizing, formalizing, and committing to a specific plan_of_actions. Such a document generally presents the objectives, strategies, analysis, and a detailed roadmap for implementation. Underlying a plan_of_action is comprehensive analysis of historic, current and proposed results all supported with assumptions. If anyone doubts the interest in business plans, a Google search returns more than 62 million and Amazon list more than 77꺜 titles concerning this subject.
Here is the way I would encourage you to set up a growth business plan: • Do some dreaming about what you would like your lifestyle to be • By dreaming decide on an average income you would like to have over the next few years • Decide how many years out you would like your plan to cover • Decide how much profit you would like for your business to generate above the income you want for yourself. • Set up a profit and loss statement of your existing business or your proposed business • With the right business knowledge and a profit and loss statement you can actually use that data to see what your business would need to do for you to give you that income and profit • Even better you can determine what size market you would need and even determine whether your market would support your business presently and in the future.
There is no doubt it would take some time and would require a lot of calculations, but when you understand these principles and know how to put it together, you could probably do it. What do you think? Have you ever thought about doing a plan like this? It's actually kind of in reverse. You decide what you want and let your business give you that.