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Monthly Archives: April 2018

Write A One-Page Business Plan

What do you want your business to look like in 12 months? What annual income do you need to earn? Do you want a 6-figure business, a business that will eventually replace your income or a part time business?

This step is about creating and writing a vision that is authentic to you. One that articulates your true ambitions, desires and purpose. It is not about what you think you should want. Keep it simple, visualise freely and write your vision in the present tense as if you are already living it.

What would you like to earn in a year and how many clients you would like to see over that timeframe. Then work backwards to calculate your hourly value.

Say your annual revenue target is $100,000 and you would like to see 20 clients a week for an hour each. Your formula should look like this:

20 clients x 52 weeks = 1,040 clients a year

$100,000 ÷ 1,040 = $96 per hour (This figure will increase when allocating any non-revenue time such as annual leave)

If you manufacture or sell a product then work out how many products must be sold and how much time needs to be invested to achieve those same results.

Next, run a reality check. Based on the previous calculations, ask yourself whether you are prepared to work that many hours or weeks in a year. Be realistic and do not forget to schedule in recreation or vacation time.

Say you now decide you only want to see four clients a day over four days a week for one hour each in order to have four weeks of annual leave. Your formula would look like this:

$100,000 ÷ 48 working weeks = $2,083

$2,083 ÷ 16 clients a week = $130

This shows that your annual revenue target of $100,000 is still achievable if you rework your fee structure or pricing strategy.

It is important to communicate to your potential client why they would want to choose you over your competitors. They must be able to clearly see a non-monetary difference otherwise they will make a choice based on price. In other words, what is your unique selling point or USP? This could range from a niche service you offer or the extent of your services to your branding or the strength of your credibility.

Move your focus from short-term goals to a strategic vision that enables you to choose and correct the direction of your course with ease. As long as you are clear about your purpose and future (Step 1), you will be able to write a solid list of strategies.

What activities are a waste of your time or energy, and are out of line with your new strategy? Perhaps it is certain administrative tasks, which can be assigned to an assistant whose hourly value will be lower than yours. That will free you up to meet clients. By identifying what you need to stop doing, you will also get clearer about the strategies you need drive forward.

Before starting any new task or activity, ask yourself this question – Is this moving my business forward or is it a distraction? Quite often we hear out about a new marketing strategy someone else has embarked on and get distracted from our own vision, strategies and plans.

Review the first six steps every quarter to ensure you are on track and to evaluate whether each strategy is working as planned. A quarterly review allows you to catch anything that is not working early on and make a decision one way or another.

Quality Control

1. Awareness about quality of the products

Do you know quality really is? Are you aware of the fact that quality carries a lot of importance? As a matter of fact, making employees as well as general public aware of the quality of things is also important, and quality control serves this purpose very well. If the employees in a firm know the importance of quality, they will try their level best to achieve the desired quality in the products.

2. Consumer satisfaction

It’s the consumers that benefit the most from the improved quality of the products. In other words, they get the best product from their desired company.

3. Reduction of production cost

If the production and operations go through inspection, the cost of the production comes down significantly. Aside from this, quality control also keeps tabs on wastage and the production of low quality products. So, the cost of production can be cut down significantly.

4. Resource utilization

Quality control makes sure that the available resources are utilized to their fullest. Again this ensures that the all types of inefficiencies and wastage is brought under control.

5. Reduced inspection cost

Another benefit of control over quality is that the cost of inspection can be reduced greatly.

Fatal Flaws in Business Plan

Unrealistic expectations

While it is sometimes true that using yourself as the ideal customer is a smart idea, since you understand the value and availability of that product or service, you might misinterpret the size of the market and the traction that can be achieved beyond a select group of true believers.

Insufficient information

Confirm the need for your products or services when you research and verify the number of potential customers who have the money and motive to buy from you.

Furthermore, make sure that you understand the buying process. Who green-lights the sale? What is the sweet spot price range? Lastly, where do potential customers obtain these products or services now?

Access to customers

Access to customers is everything and some industries or target customers seem impenetrable. You may identify the right customers, understand how your products or services fit their needs and know how to price and deliver. But if potential customers do not have the confidence to work with you because you lack an endorsement from a trusted source, you’ll starve.

Overestimating cash-flow

Usually, businesses won’t achieve desirable gross sales and or show a net profit in the first year of operations. Businesses that require high start-up costs especially will require long ramping-up periods. The business plan must acknowledge the potential for negative cash-flow and demonstrate how fixed and variable expenses will be met during that time. One must know how inventory will be financed, payroll will be met and office rent will be paid.

When writing your business plan, conservative financial projections are strongly advised. Customer acquisition may take longer than expected and the size of their purchases may initially be small. Moreover, it’s possible for a venture to be profitable on paper and still suffer from cash-flow problems, if customers do not pay on time.

Creating Logic Models

The basic idea of a logic model is to show the relationships between inputs and outcomes, plus intermediate activities, outputs and environment, of a program or intervention. At the lowest level, it shows your program’s theory of change: if we provide these resources, then we can conduct these activities. If our population participates in these activities, then these outputs will occur. If all these things happen, our theory says this outcome (or change) will happen in our community or for our participants. By visually drawing these relationships, we should recognize the assumptions we make about the connections between our activities and the expected results.

Since the main purpose of the logic model is to express a program’s theory of change, a common process is to start with the desired outcomes and work backwards. For example, if an organization wants to change Problem X in the community, the planning team might say: “What needs to happen to cause Problem X to change?” Continuing to ask what would change or impact each preceding step will help your team focus on results rather than activities.

One of the common mistakes when creating a logic model is confusing outputs with outcomes. Outputs are the programs or services an organization provides, while outcomes are the difference those programs and services made in our community. Here are some examples:

Output: food pantry with evening hours. Outcome: person working a low-wage job eats dinner today.

Output: free car seats for babies and installation assistance. Outcome: keeping a child safe in the car.

Output: the city public works department’s project design and number of potholes repaired. Outcome: better traffic flow, shorter travel times, and fewer accidents.

As you can see, the thing we really care about is the outcome. Since outcomes can be difficult to measure and we assume the link between our outputs and the outcome are obvious, it’s easy to focus on the activities and outputs instead of outcomes. Using a logic model process can help.

Since some funding agencies require logic models in a certain visual format, teams can get bogged down on making ideas fit into the logic model boxes instead of focusing on the modeling process itself. One of the best ways we’ve seen of helping a team through this process is for the team to use a white board and sticky notes to easily change headings and order of ideas. You can start by dividing the white board into the four columns-inputs, activities, outputs, and outcomes-then team members write ideas onto sticky notes which are placed into the columns. Team members, or a facilitator, can draw arrows, rearrange notes, and add new columns or boxes, even working over several days.

Once your team has reached consensus on its theory of change, you can put it into a visual format. You might even end up with multiple models. For example, an overview model then more detailed model(s) for specific programs. Below are just a few examples of what your model might look like. The one most non-profits are familiar with-the United Way’s template.

Sometimes, a flow chart logic model visually explains your theory of change more fully.

In the last few years, we have also seen network analysis-style diagrams being used to visually express logic models. The American Evaluation Association website is a good place to learn more about current discussions and best practices in logic model creation.

Large grantmakers such as the United Way, W.K. Kellogg Foundation, Robert Wood Johnson Foundation, Centers for Disease Control and Prevention, all encourage non-profit organizations to use logic models for more than grant applications. Some of the most common uses these funding agencies suggest are:

  • Program planning
  • Implementation development
  • Disseminating information to employees and partners
  • Identify your underlying beliefs and assumptions
  • Provide a framework for team conversation and understanding
  • Make sure evaluations focus on the most important parts of the program