Business Planning

BUSINESS PLANNING

Planning is the key to any successful business. There are many different models and variations of business plans, so it is extremely important to choose the right one specific to the type of business. Having a business and knowing what to do with it are very separate issues and creating a well-executed business plan for the right reasons will enhance the odds that your venture will be one of the ones to succeed.

“Accounting is the measurement, statement, or provision of assurance about financial information primarily used by managers, investors, tax authorities and other decision makers to make resource allocation decisions within companies, organizations, and public agencies.” (en.wikipedia.org ). Whether you are seeking funding from investors or you are compiling a business plan to serve as a guide for managing your business, it is imperative that you make financial projections. These financial projections will attract investors and serve as a guide to future business decisions. Financial projections can be intimidating. However, they are less a matter of mathematical capacity and more a matter of your knowledge of your business, the industry, and the market. To make projections, such as sales forecasts, you must first break down sales into manageable parts. One way would be to outline the products and services you offer, the unit price for each item, the anticipated inventory, projected sales per item for each day, week, month, etc. You will base these numbers on your experience in the industry and research. Finally, make an educated guess regarding total sales. Using the same procedure, calculate your expenses or startup costs if launching a new business. Use a template or sample as a guide. Estimates, such as sales, are not simply based on knowing the number of people in your demographic region and making an educated guess as to how many will opt to use your product or services in a given time frame. Sales are projected in line with your marketing strategy. The purpose of accounting is to provide the information that is needed for sound economic decision making. The main purpose of financial accounting is to prepare financial reports that provide information about a firm's performance to external parties such as investors, creditors, and tax authorities. Managerial accounting contrasts with financial accounting in that managerial accounting is for internal decision making and does not have to follow any rules issued by standard-setting bodies. Financial accounting, on the other hand, is performed according to Generally Accepted Accounting Principles guidelines.

Many small businesses utilize an accounting system that recognizes revenue and expenses on a cash basis, meaning that neither revenue nor expenses are recognized until the cash associated with them actually is received. Most large businesses, however, use the accrual method. Under the accrual method, revenues and expenses are recorded according to when they are earned and incurred, not necessarily when the cash is received or paid. For example, under the accrual method revenue is recognized when customers are invoiced, regardless of when payment is received. Similarly, an expense is recognized when the bill is received, not when payment is made. Under accrual accounting, even though employees may be paid in the next accounting period for work performed near the end of the present accounting period, the expense still is recorded in the current period since the current period is when the expense was incurred.

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All organizations have specific goals and objectives that they strive to meet. Top executives devise strategies and formulate policies to ensure that these objectives are met. A corporation’s goals and policies are established by the Chief Executive Officer in collaboration with other top executives, who are overseen by a board of directors. The chief executive officer of a corporation retains overall accountability; however, he may delegate several responsibilities, including the authority to oversee executives who direct the activities of various departments and implement the organization’s policies on a day-to-day basis. In addition to being responsible for the operational success of a company, top executives also are increasingly being held accountable for the accuracy of their financial reporting, particularly among publicly traded companies. Chief financial officers direct the organization’s financial goals, objectives, and budgets. They oversee the investment of funds and manage associated risks, supervise cash management activities, execute capital-raising strategies to support a firm’s expansion, and deal with mergers and acquisitions.

In addition to developing a sound business plan, it is very important to find the right people for the job. The Human Resource Department covers a wide variety of activities, and key among them is the topic of staffing. No matter the breadth or the depth of an organization, it will always have the inherent need for human resources. It is safe to say that without manpower, no organization in the world would exist. Recognizing not only the need for people, but also more importantly, the need for skilled, efficient and loyal employees has been a key turning point in defining the role of the HR professional.

The Small Business Administration (SBA) was created in 1953 to aid, counsel, and protect the interests of small businesses, as well as to help families and businesses recover from physical disasters. “The Small Business Development Center (SBDC) Program is the U.S. Small Business Administration’s largest matching grant-funded service delivery network providing quality customer service to the small business community. The SBDCs, in partnership with the SBA’s Office of Small Business Development Centers and District Offices, develop programs and provide business management and other services that enhance the economic development goals and objectives of SBA and their respective states and their local funding partners.” (http://www.hawaii-sbdc.org/new-pol/SBA.htm)

Ethics is a hot topic these days. Simply stated, ethics refers to standards of behavior that tell us how human beings ought to act in the many situations in which they find themselves-as friends, parents, children, citizens, businesspeople, teachers, professionals, and so on. Many times, leaders are forced to decide on issues where there are arguments on both sides вЂ" a problem that makes ethical decision-making very difficult. In your role as a leader, your