Business Plan Questions

[CharlieB]

Hi

I have some questions about business plans and I would really appreciate it if you could help me understand them a bit more:


I'm wondering how you are ment to predict sales on a new business. In order to have a business plan you need this to make a cash flow forecast. Is it to do with rivals and how much they sell? If so how can you find this information out?

With a business plan, are you ment to plan exactly how you are planning to reach your targets? If so how can you do this with accuracy as it must be impossible to predict how much you can sell and how much rivals will sell? If this is the case could someone please give me more information on this please.


Thanks

Charlie

[myfayt]

Hi, I've done some business plans before.

To predict the sales, you need to do lots of research. Change out a competitors sales and determine yours from that. Being a start up you most likely will not make as much as them, since you are an unknown company.

There is websites that give you the yearly sales total on hundreds of businesses. Search for like Small Business Sales Ranking and stuff to that nature.

Reaching your targets is what method you wish to do. Advertising? free item giveaways? business cards?. Also you need to define your target market, you cannot assume everyone will buy from you. If you are selling children's toys, then your target sales is children. If you are selling bicycles, then your target customer is athletes.

[inle]

That's the sales & marketing part..
& that's what I do..

Take note of these:
Your pricing strategies, your market size, environment, SWOT & your mixes, your marketing srrategies & campaigns for short & long term, your market peneration, conversion, average sale & transaction & your margins..

Checking on compeitors & datas from website are just a tip of the iceberg..
To ensure you can do a more accurate prediction & eventually run a profitable business @ e faster possible time using the least resources takes more than just that..

All these are the few KPIs for any general businesses that gives you an estimation or calculation of your revenue & profits...

[ZingerIntl]

SWOT stands for Strengths Weaknesses Opportunity Threats. just FYI. Its not talked about often in regular biz, just planning stages.

[CharlieB]

Hi, I've done some business plans before.

To predict the sales, you need to do lots of research. Change out a competitors sales and determine yours from that. Being a start up you most likely will not make as much as them, since you are an unknown company.

There is websites that give you the yearly sales total on hundreds of businesses. Search for like Small Business Sales Ranking and stuff to that nature.
Reaching your targets is what method you wish to do. Advertising? free item giveaways? business cards?. Also you need to define your target market, you cannot assume everyone will buy from you. If you are selling children's toys, then your target sales is children. If you are selling bicycles, then your target customer is athletes.

Do you know any websites that give these? I've just googled it and can't find anything useful.


Also, when defining your market, how do you know exactly how big the market is? Is this done by market research? If it is, wouldn't it be imposssible to find the exact number as you can't interview every one in the region or are there websites which can help you with this?

Thanks

Charlie

[myfayt]

Do you know any websites that give these? I've just googled it and can't find anything useful.


Also, when defining your market, how do you know exactly how big the market is? Is this done by market research? If it is, wouldn't it be imposssible to find the exact number as you can't interview every one in the region or are there websites which can help you with this?

Thanks

Charlie

It was hard to find those stats on business, their yearly earnings and all. May take awhile to find again, should have saved it. *kicks himself*.

Yes it is impossible to get an exact number, it's all about estimates. If you are opening in a small area, then research and estimate for that area. If you are doing it country or worldwide, it would be harder.

[byrneof]

Build your sales assumptions from the bottom up. Break your sales funnel into each of it's parts. Find out industry conversion rates and work from there. However, you are never going to be 100% accurate. You should make your assumptions clear in your projections.

[aa2202]

I have sympathy for you. When you first start you write your business plan, it can be really overwhelming. I remember when I first started mine, I read about all of this information that is suppose to be included and I found it all really vague. Generally there are seven parts to a business plan. (Go to entrepreneur.com to see what they are) The financial part can be the hardest to really understand.

To predict how your sales rankings will be, you just have to use an educated estimation. When I say educated I mean try to find as much info as possible on the internet but it will be hard for you to find other companies sales rankings. Personally I found none. If you do find a website that provides them for free, please put the link on here.

And in a business plan yes I would say it would be smart to include how you will reach out to your targeted demographic. Research how your competitors do it and then try to improve that. Also when comparing competitors, I would make a SWOT. Strength, weakness, opportunities, threats. Once you know your strengths and weaknesses, I think it will be easier for you understand your own business position and how well you will be compared to your competitors.

I would also recommend that you visit your local small business development center (SBDC) and maybe find an advisor or consultant. They should have workshops that will probably help you, I know it helped me.

[CIsaac]

Unfortunately it comes down to a lot of researching for you but it can be fun. Start by taking a sheet of paper and answer these questions for yourself. What will you be selling? How much is it going for in the market right now (look up stores in your area and on the internet--so for instance if your answer is shoes, you will look up DSW, Bakers, shoes.com, ask your family where/how much they pay for shoes, etc) You want to look at what kind of shoes people want, what's not being offered, what prices not being offered, the undertapped customer, etc.

Then Figure out if you want to come in, let's say-- $10 cheaper. Now take that figure and figure out how many shoes you can make per day x per week x price of shoes. THen months, then year. Then figure what it will cost you to make each shoe (what products do you need or supplies in order to make the shoes) that's your cost of goods sold.

So basically, your annual number will be based on how much you think you can produce and sell--so it may be different from someone else who may have 15 employees to start. Start from the bottom with the numbers and work your way up. It's really not as bad as it seems if you start from the bottom.

As for how you plan to reach your market, you want to include that. Example, you could decide that you want to be a door-to-door shoe salesman because you find that a lot of stay-at-home moms like that. That will be how you plan to reach your market.

Don't worry, your first plan will be naive. It will end up changing but that's good. You plan before you start and you plan as you go along. You can't just do a plan without knowing your craft and the product though so use the time to really dig into finding out price points out there now, ideal customers, what's missing, etc.