Planning Your Business

In my last post the key features of the four different business structures (sole trader, partnership, company and trust) were outlined. The next step is to plan the direction of your business as planning will be one of the keys to its future success.
 
Planning is the ‘how to’ of a business and is written in a Business Plan (BP). A BP is designed to capture a realistic and practical picture of your business over the next three to five years. Your BP will provide you with a clear focus of where your business is now, where it is going, how it will get there and whether it got there.
 
Studies have shown that successful businesses are more likely to use BPs. This does not mean that developing a BP will guarantee a successful business, but it is ONE of the ingredients that make a business successful. The significance of a BP cannot be overemphasized.

​Your BP can help you work through the following items:

• who will be your customers?
• the methods of marketing your business
• whether you will employ staff in the short, medium or long term
• how much money you need to start up, operate and grow your business?
• your expected income, expenses and profit, and
• realistic growth rates for your business.

​As you progress in starting and operating your business you may start to see that there is a difference between working ‘in’ your business and working ‘on’ your business. 
 
Working ‘on’ your business is spending time ‘on’ developing a BP, implementing the plan, monitoring budgets and cash flows, managing risks etc. Working ‘in’ your business is doing what you actually want to do, which is, providing your product or services to the community.

​Running a business requires its own set of skills and disciplines that are quite separate from the providing your product or services. A key challenge (not only in the early days, but right through your business life) will be to find a balance between providing your product or services and the management of your business.

The Business Plan
A BP is a ‘living’ document that is reviewed and updated regularly to reflect changes in both the economic environment and your own objectives and priorities.
 
The key components of your BP include:
Business details – This is where you outline your business structure, registration details and any licenses or permits your business holds.
Identify the services you offer – This is the ‘what your business does’ part and identifies the areas your business will work in.
Operations section – This section outlines how your business works on a day-to-day basis. It includes information about:

• how your products or services are offered
• your premises –my business has a 6 month lease on premises
• your employees - hiring, developing and managing of staff
• suppliers – my business buys equipment from XYZ Pty Ltd
• equipment – my business uses the following equipment ...
• your insurances– such as professional indemnity insurance, public liability and worker’s compensation insurance.
• how your customers get in contact with you – customers contact me by mobile phone, facebook and email
• how you receive payments from customers – EFTPOS, credit card, direct debit, cash, cheque or Paypal
• your credit policy – customers have 7 days to pay their account
• your refund policy – customers who are not satisfied with my service or product receive a refund
• your memberships with professional bodies  
• your technology, computer systems, software

Marketing, branding and social media strategy – This part looks at promoting your business, acquiring customers, monitoring your competitors and achieving your growth objectives. Your strategy should address the advantages, disadvantages, risks and results of your marketing channels.
Financial strategy – This section includes information about your business financial goals, start-up costs, and projected cash flows. Your projected cash flow looks at your expected expenses and income over a specified period of time (usually over 12 months).
The Future – This section covers your plans for the future, your short and long term goals and expected rates of growth.
Exit strategy – This part considers how you will exit or leave your business. It is probably not something you like to think about it, but it is inevitable that one day you will exit your business. Whether you decide to close down your business, sell up, retire or transfer ownership of your business to family or a trusted employee, it is important you plan for that day. 

​Many government agencies including the ATO, www.business.gov.au and www.buisness.qld.gov.au provide further information to help you understand the different business structures. 
 
It may also be useful to obtain professional advice as to whether you are a hobby or a business from a solicitor, an accountant or a business advisor.

​Why not make a complementary consultation with me today to go through your business ideas.
 
So once you have prepared your comprehensive BP what is next? 
 
The next step is to implement those plans, as well as, manage the day-to-day operations of your yoga business.  This is the topic of the next business support post.