Companies grow from realistic business plans. Your ability to plan effectively is critical to attracting investors or merger partners. Small businesses typically do minimal planning, reacting more to daily operations, but in order to enlist others in your growth, you need to move to the next step. You need our help.
Credible business planning requires significant time and effort to anticipate 12 months, or better yet, 24 months into the future. It takes time to chart your path to success, but the effort is worth every minute. As the old adage says, “Plan your work, work your plan.”
The TFS business planning process guides managers through a complete review of past and present conditions before thinking about the future. It’s a reality check, and it’s important to account for detailed costs and actual benefits. Many business plans go wrong because of poor understanding of revenue timing, underestimating customer purchasing cycles, new product introductions that are too aggressive, and production costs that fail to consider ramp-up time and one-time costs.
We make sure it’s right.
Our business planning process takes a “building block” approach in three separate stages:
1) Base Business Plan. This is a detailed snapshot of how your business is currently structured, with run-rate revenue (if any) and expenses – the way your business operates today, and if nothing changes, what should happen consistently, based on the past few months of actual results, adjusted for extraordinary items.
2) Growth Business Plan. This is additional product, cost, capital expenditures, headcount, working capital, cash flow impact, etc, for new business expansion, technology, etc. In support of each growth item TFS builds detailed revenue and cost models so the impact can be analyzed and justifications tested. In preparation for the next stage, base budget and growth budgets remain separate to keep them clearly understood and readily justified.
3) Total Plan. Strategic vision sells your business plan. TFS helps you crystallize the rest of your message in a way that consolidates your Base and Growth Plans into a winning package.
Savvy investors will quickly identify weaknesses in any business plan. TFS identifies the strengths and risks so you don’t get caught unprepared.
Common errors to avoid when creating a realistic business plan are:
- Presenting too much detail or not enough
- Creating non-standard formats or incomplete financial schedules
- Failing to present key financial information
- Misunderstanding your company’s cost structure – fixed, variable, operating costs, etc.
- Not defining revenue sources and cost drivers
- Not defining clear goals and objectives
- Underestimating start-up risks and one-time expenses
- Spending too much time planning unimportant items
- Not planning to minimize the effect of change on the organization
- Relying on inexperienced staff, friends, or contractors
- Assuming that everything will happen on time and correctly
- Counting on “miracles”
- Creating a plan in which revisions require too much time
- Failing to check your work: Numbers on one schedule don't match another schedule
TFS will make sure your financial plan is optimized for investors or any target audience. Assumptions will be well-defined and justified. Investors give you one shot. TFS helps you look your best.
