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Growing a Business

Successful Budgeting Involves People

4 Important Budgeting Tips Managing the budget numbers can be simple, but managing a budget takes people, not spreadsheets. While budget numbers are simple, budget management isn’t. To make a budget work, you need to add real management: Understand that it’s about people: Successful budgeting depends on people management more than anything else. Every budgeted [...]

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Business Ratios

Ratios Defined The illustration below shows a Business Ratios table. It includes dozens of standard business ratios calculated from business plan financials, and used and expected by bankers, financial analyists, and investors. It also includes a column of statistical indicators for the specific type of business. This industry information is classified and categorised by Standard [...]

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Cash is King

Cash Flow Planning In a previous article I talked about business numbers and the critical difference between cash and profits. This article looks at how to plan for cash in a business plan, understanding the critical elements that affect cash flow. You don’t want to be one of those businesses that goes broke even while [...]

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The Strategic Plan

You know it when you see it More years ago than I care to say, as a senior manager with Creative Strategies International, I gave up trying to define strategy. During the years I was in that business, I discovered, slowly, that most people believe they are naturally good at strategy. They may not be [...]

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The Bottom Line

Your Income Statement The familiar phrase, “the bottom line,” used as synonymous with the conclusion or the underlying truth, is actually taken from the standard Income Statement in accounting, which subtracts costs and expenses from sales and shows profits as the bottom line of the statement. After you have projected sales and cost of sales, [...]

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Cash Flow—About Business Numbers: Part 1

Cash Versus Profits Although cash is critical, people think in profits instead of cash. We all do. When you imagine a new business, you think of what it would cost to make the product, what you could sell it for, and what the profits per unit might be. We are trained to think of business [...]

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Cash Flow—About Business Numbers: Part 2

Profits Are Not Cash Although cash is critical, people think in profits instead of cash. We all do. When you and your friends imagine a new business, you think of what it would cost to make the product, what you could sell it for, and what the profits per unit might be. We are trained [...]

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Implement Your Plan. Keep it Alive. Plan vs. Actual: Part 1

Managing With Your Business Plan As you review implementation results with the people responsible, you will often find the need to set new goals and make course corrections. Keep track of the original plan and manage changes carefully. Although changes should be made only with good reason, don’t be afraid to update your plan and [...]

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Cash Flow and Profit and Loss. Plan vs. Actual, Part 2:

Catching trends as they develop The Plan vs. Actual Cash Flow table for the same sample plan shown in Part 1 of this series, shows the variance in cash flow and cash balance and how much can change, in the real world, despite good planning. A company needs to adjust to change by keeping its [...]

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Plan vs. Actual, Part 3: Understanding Variance Analysis

Understanding variance analysis Many businesses, especially the small, entrepreneurial kind, ignore or forget the other half of the budgeting. Budgets are too often proposed, discussed, accepted, and forgotten. Variance analysis looks after-the-fact at what caused a difference between plan vs. actual. Good management looks at what that difference means to the business. Business Plan Pro [...]

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