Business Plans for Smaller Organizations

As a small business owner whether you are the Financial planner or Tanner, there is actually quite a bit more need to be organized, rather than less. Even though a certain amount of spontaneity is beneficial and expected of small business, a certain amount of planning and structure is needed if you really want to compete with what similar institutions offer. Take some time to really plan the scope of your business and record it. This should give you a significant idea of what you are dealing with, where you are, what your goals are, and how close you are to achieving them.

The primary thing is to remember to get every detail down on paper. This gives you a starting point, and something of a reference to alter if things need to be changed later on. The planning document can guarantee that you, your contracted workers, and your investors are all on the same page.

The first thing to put on your page is a description of your business. This includes the plans for what your business will do, what services you provide and what goods you will produce. Basically, this will verbalize the scope of your small business. While you many want to increase this later, you'll discover that this setting down of your terms and limits is very useful for growth in the future. This is also a good place to include what kind of end game you have. While they can be broad goals that you want to stick to, you should follow it up with some rough gross and net income figures that you are wishing for.


You small business plan next should consider the market, both current market situation, your market projections and the way you envision your place in the market. Why is your service necessary and the way your service will impact the market itself? How are you going to get some buzz going about your services and how will your business affect different types of clients? This section basically “proves” your company's right to exist and gives evidence for why it should be financed, so take your time and put a good effort into it.

Finances are the next part that you tackle. Include general expenses, contingency fees, licensing fees if necessary and anything that will make you put out money. Because virtually all bankers will ask to read over your business plan primarily for this section, this is an important one to work on. If you are not to sure what to do here, look at examples from similar businesses to see the way that your competition has set things up. Put down an accurate view of your current business status, but don't forget to keep your eye on your end goal.

For the final step, think about management. Who is running things, and separate out their responsibilities? This is a prime method to keep things organized and identify responsibilities. Like the other area of your small business plan, it can be modified, but the most important thing to do is to have it there in the first place.

Take all the time you need to make sure that your small business plan is in order, and you will realize that your own business will start carving out its place in the market much faster.

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Two facts to turn you into an optimist

The gloomsters are wrong: the worst of the recession is probably over

Simon Wolfson

Moderation in print is harder than it looks. So an article suggesting that things are not as bad as the gloomsters would have us believe, without saying the recession is over, is a real challenge. But that is my view. The recession will still take a while to end but the worst is probably over. At the beginning of this year Next plc forecast that its like-for-like sales would be down for the rest of the year - and we still believe that will be the case. However we also pointed out that the financial pressures on many of those still in jobs would be reduced because of lower mortgage payments and fuel and energy costs.

While many will wisely chose to save that money rather than spend it, eventually consumer confidence will return and the economy will come out of recession. There are signs that this is underway. Two vital pieces of information are important indicators of the state of the economy. The first relates to employment, the second to the complex world of mortgage-backed securities.

Unemployment is indeed rising but crucially employment is not falling nearly as fast. Since its peak in May employment has fallen by 162,000; in that same period unemployment has risen by 401,000. So while more people are claiming benefits - and this is a headache for Government - the larger labour market means that the impact on national earnings will not be as extreme as expected.



In effect new entrants to the labour market will replace some of the spending lost from the unemployed. This will be of little comfort to those who lose their jobs; but it will be important to the general health of our economy and soften the blow of rising joblessness.

Alongside more encouraging employment statistics it appears that the problem of bad debts is not quite the catastrophe the markets were expecting. A key indicator of this is that defaults on mortgages are nothing like as high as the depressed prices of mortgage-backed securities would suggest.

Mortgage-backed securities are large pools of mortgages lumped together by banks and sold on to investors so that the banks can raise funds. In a given pool the best 93 per cent might be classed as triple AAA. Investors who buy these securities will only lose their money if more than 7 per cent of the total loan is not paid back. A 7 per cent loss would require many more than 7 per cent of borrowers to default, because the value of repossessed properties is likely to cover a significant portion of any unpaid loan.

Let's say the mortgage loans represent a not untypical 70 per cent of the value of the underlying property, even if the properties fall in value by half the bank will recover 71 per cent of the value of its loan. So, in this example, for the AAA bonds to incur any losses an astonishing 23 per cent would have to default - that's more than one in five. That is simply not happening; repossession rates are still well below 1 per cent.

Unlike the recession of the early 1990s interest rates have fallen, making defaults even less likely. Yet AAA mortgage-backed securities are trading at 93p in the pound: this price implies a default rate of more than 40 per cent.

The conclusion must be that mortgage-backed securities are now trading at way below reasonable value. In time, the smart money will take advantage of this and banks will see the market value of their assets increase. This will free up the banks to lend more money and, slowly but surely, the banking sector will come back to life.

The markets have in fact overly punished the banks for careless lending. The astonishing bounce in Barclays' shares (up by more than 200 per cent in a couple of months) is testament both to the remarkably strong and sensible leadership of that company and to the slow awakening of the markets to a world that is not quite as dangerous as the pundits have indicated.

So we can expect a slow but steady return to normality, an economy bruised but still breathing. Don't expect an overnight cure, we still have a difficult year ahead, but hopefully the foundations of a recovery are in place.

The biggest risk now lies in public finances and here the outlook is not at all good. With revenue falling and expenditure set to rise to nearly 45 per cent of GDP our national debt will increase to more than a trillion pounds. This could undermine any recovery and burden the country with years of stagnation as we try to pay off the debt. The risk is that increased taxation will sap the economy's lifeblood. Furthermore the state of government finances may continue to weaken the pound, stoking inflation as imports become more expensive.

There are three key messages for the Chancellor in the run up to the Budget. First, the measures taken to stabilise the banking sector are slowly beginning to bear fruit - things are not as bad as some had foretold. Second, don't splurge money on a wasteful stimulus package. The £15billion VAT giveaway was helpful in containing prices but did nothing to boost spending. Any stimulus package is unlikely to have any effect other than to strain an already over-stretched balance sheet.

Third, the Government must start to curtail its spending. According to its own forecasts, it will increase its spending by nearly £100bn over the next three years. Ministers must not tell us that reducing public spending will only harm essential services; they have to work smarter to be more efficient. Businesses have been working hard to pare their costs without letting down their customers. The Chancellor has no excuse not to do the same thing.

Simon Wolfson is the chief executive of the retailer Next PLC

From : http://www.timesonline.co.uk
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Profitable moment: You can never really beat a bank

Richard Quest , Correspondent | Mon, 04/20/2009 1:32 PM | Business

"The customer can have any color he wants, so long as it's black," Henry Ford said about his Model T in 1908. It was the car that gave birth to the mass produced automobile and is credited with putting America on the motorized road.

Today car manufacturers around the world would more likely say, "The customer can have anything at all, so long as they buy a car right now." If there is one industry, besides banking that has become the touchstone of the crisis it is the automobile industry.

The numbers we received last week show the disastrous state of the industry. In Europe car sales dropped 17 percent in the first three months of the year. In the United States annual sales are likely to be 9.5 million vehicles, the lowest level since 1982.

Around the globe, the car companies are screaming at governments for billions of dollars to keep them going.

Some governments like Germany have introduced car scrapping incentives; get rid of your old car and receive a grant to help buy a new one. It boosted German car sales dramatically after it was introduced. France and Italy also have similar schemes.

Everyone's watching General Motors to see if it will file for protective bankruptcy. In Australia GM owns the venerable marque Holden. In Europe and Asia Opel is a household name and in the UK Vauxhall has 15 percent of the market.



Throw in Saab, Hummer, Cadillac and the Chevy to the mix too and you start to see why the old saying, "as goes GM so goes America" might be adapted to incorporate other parts of the world in the weeks ahead.

Even though USPresident Obama wants the merger of Italy's Fiat with Chrysler to go ahead, Fiat has set pretty strong terms before it would take on the US albatross.

The question many are asking is whether or not the auto industry should be receiving all this help. There are those who believe the car companies have got themselves into this mess, but we can't ignore the huge economic significance of this industry.

Believe me, if car companies start going out of business this crisis will become a lot worse.

Perhaps the best hope in all of this comes from the developing economies of China and India. Last week Volkswagen shares roared ahead on higher sales in China and the Tata Nana has just launched in India and despite the fact it's available only in red, silver and yellow, Henry Ford would no doubt have approved. At only US$2,000 it promises to revolutionize driving in an emerging economy, putting millions of new people behind the wheel.

The car industry may not be what it once was - but make no mistake - it is still a vital part of everyone's economic life.

Whatever happens to GM, Chrysler, Ford and the rest, I hope your week ahead is profitable.

This week's Profitable Moment goes to the US banks and banking shares - much better results than expected. They may have lost tens of billions, but hey, you can never really beat a bank!

Richard Quest is a CNN correspondent based in London, host of the weekday one-hour program Quest Means Business. For program highlights and more, go to www.cnn.com/qmb

From : http://www.thejakartapost.com
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