Money Planning Tips for Small Business
by Summer Alexander on June 20,2012
What is the Money Plan for your business? A money plan is exactly what it sounds like; the plan for your business to generate and maintain its revenue.
I’m not sure where the following statement originated but it is definitely true:
“A business with no sales is a hobby.”
So in order to help you with your money plan I came up with the top 10 long term loans – best up to 10 year loan and a list of 10 basic questions that every budding business owner should have a solid answer to. I call this list the “Money Plan 10.”
I highly recommend you take the time to answer these questions before launching your business. While some of these steps may seem simplistic you would be surprised at how many entrepreneurs are missing the basics. When you have big auto loans, you should first seek help from before starting your business.
Now without further adieu….
The Money Plan 10
1. What service are your providing?
You need to be able to answer this question in the simplest terms possible. In fact I suggest you explain your business concept to a child in your life between the ages of 10-14 years and make sure it makes sense to them. Better yet after you explain it be sure to have them repeat back it to you. If a reasonably intelligent child cannot understand what you do chances are your ideal clients won’t either and if your potential clients don’t understand how you can help them chances are they won’t be shelling out any dollars to you anytime soon.
2. Who needs this service?
Now is not the time to generalize. Vague answers such as “small business owners” is not specific enough considering there are more than 27 million of them in the United States. A better answer is stay-at-home moms in Chicago looking to start a home day care. In other words narrow your market enough to lessen your competition and at the same time establish yourself as a clear expert in the field.
3. How do you know they need it?
The answer to this question should not be “I have a hunch.” Talking with people who meet your ideal client profile to determine their needs as well as sending out a survey are both great ways to test your market.
4. How much are they willing to pay for the service?
Charging too little will devalue your business, make your ideal clients skeptical, attract less than desirable clients and fill you with resentment. Charging too much will scare off your ideal clients and the only sound you will hear each morning that you open for business will be crickets chirping….. also include the question in your surveys and conversations with your ideal clients.
5. How much are your monthly expenses?
Pretty straight forward- how much payday loans now are you spending each month to run your business? Leave no stone unturned write down your marketing expenses, printing costs, web hosting fees, merchant fees etc. A great tool I recommend is Wave Accounting this is a really simple to use, 100% free online accounting solution. I personally use it to track all of my income and expenses which will make it much easier for my tax preparer at the end of the year. New small business owners may wonder if setting up a credit card merchant account at merchants.services is a wise plan. In truth, there are pros and cons associated with accepting credit cards. Thoughtful minds eventually realize the pros absolutely outweigh the cons.
6. How many paying clients do you need each month to cover your expenses and meet your profit goals?
Break this down by figuring out how many hours you have available for client work (not marketing, follow-up, blog writing, social media etc.) each week. Multiply that number times your hourly rate to see if you are on track to meet your monthly goals.
7. How many value-added products can you sell to add to your bottom line?
eBooks, webinars, teleseminars, group memberships – you get the idea. Think about what you can create one time and sell multiple times to help your clients, potential clients, and those who need the help of Online lender in the USA but cannot afford to hire you for one-on-one consulting.
8. Once a client agrees to pay you, how will they pay?
It is imperative that you make it painless for your clients to pay you. Having a merchant account or even PayPal, Google Checkout or a similar service will allow clients to make their payments online which is a convenience for them and you.
9. What is your refund policy?
Yes sometimes the best way to keep money in your pocket is to prevent it from falling out. Have a solid plan in place to handle refunds and more importantly do your best to set expectations on the front end of a project to avoid clients being dissatisfied once they are complete.
10. What are your customer retention and referral plans?
Have a plan in place to keep current customers coming back such as establishing a monthly maintenance program they can subscribe to or just plan to follow-up with current customers on a regular basis to see if they have any new needs. It is also a good idea to establish some kind of referral policy whether you set up a formal affiliate system or simply send an email to your list letting them know you are offering $50 for every client they send your way.
What steps do you take to make sure you are meeting your money goals?