While only 2 pages in length, the executive summary is by far the most  important component of your business plan or proposal. It is designed to  summarize the key elements, capture attention and most importantly, showcase the  financial highlights.

So, if you only have 2 pages to convey a significant amount of information  and summarize the financial upside, how do you decide what to put in and what to  leave out? Which financial features are critical to emphasize?

Depending on the purpose of your document and the intended audience  (investment, sale, partnership, strategic alliance, joint venture etc.), you  will want to tailor your financial disclosure to suit their needs and  expectations. What would they want/need to see in order to make an informed  decision?

At a minimum, you need to clearly state what financial input is required from  them and what they will get in return – i.e. a share, debt instrument, license,  exclusive right etc. Next, highlight the expected net profit and cash flow over  2-3 years. Also, give a clear indication of return on investment (ROI) AND a  realistic, well defined exit strategy.

In an executive summary, it is important to be succinct and focused. It is  not the time to tell your life story, overpromise with unrealistic projections  or overwhelm with too much detail. You will only get one chance to make a good  first impression and capture the attention of the reader. In fact, many  sophisticated investors have told me they rarely read a business plan or  proposal in its entirety. They make their decision on the strength of the  executive summary and their assessment of the owner/manager (in terms of  character, knowledge, skills and tenacity).

Focus on “what’s in it for them”. Show them clearly how they can benefit and  when the result will be crystallized. Give them enough detail to understand the  industry, opportunity and unique solution you provide. And most importantly,  clearly summarize the key financial metrics of profitability, cash flow and  ROI.

In short, make it EASY for them to invest in YOU.

Article Source: http://EzineArticles.com/6107414

What do you need to do to change the playing field you are on completely?

It’s an unlikely source for great business advice for entrepreneurs.  A story about Billy Beane, the general manager of a major league baseball team at the bottom of the ladder – the Oakland A’s.  Crushed by the big budgets and big name players of teams like the New York Yankees and the Cleveland Indians, Beane is forced to take a risk and do something no team has done before – abandon traditional recruiting methods and employ computer-generated analysis to acquire and trade players.  And in doing so, he changed the face and landscape of the game forever.

The following quotes from the movie were never really meant for you and your business and yet, they reveal some fantastic truths about life and success that will make you a better owner and leader.

1. You’re not solving the problem. You’re not even looking at the problem.

It is very easy for you to be distracted by all the issues and rhetoric swirling around the actual problem.   The more you (or others) have personally invested in the status quo, the more you will be prevented from seeing the real problem for what it is.  Seek advice and perspective from people outside your industry — those inside will be emotionally attached to the way things have always been done and thus, they have become part of the problem.

Your number one objective is to determine what the actual issue is, and solve it.  You don’t have time to get caught up in meetings talking about why it is a problem or re-engineering band-aid fixes that have not cured it in the past.

2. We’ve got to think differently.

Your business really isn’t that different from the Oakland A’s baseball team.  If you’re a start up or a small-mid size business, you’re likely working under some tight (and possibly unfair) resource constraints.  If you want to grow and to challenge competitors that have much deeper pockets, you need to level the playing field or you need to change it completely.  It is impossible to beat anyone if you insist on letting others dictate the terms.   You must start by thinking differently.  What would need to change in order for you to have the advantage?  What can you do differently right now to achieve your objective? How can you adapt or modify your approach to get what you want?

Playing the game on your competitor’s terms is no longer a viable option.  It can only lead to frustration and failure.

3. He passes the eye candy test. He’s got the looks – he’s great at playing the part.

Success often depends on good scouting and recruiting. A common mistake that most of you will make is to recruit team members that you like (and have something in common with during the interview) or who look the part. In order to ensure the survival of your business, need team members that can actually do the job that you need them to do. It doesn’t matter whether the candidate has 15 years of experience at a multi-national or comes highly recommended from so-and-so.  None of that amounts to a hill of beans if they cannot do the job.  If you want to boost your success this year, get the right people on your bus.  If you need a good hitter (someone who can close business) don’t hire a semi-retired catcher who is charming in the interview.

4. Your goal shouldn’t be to buy players, your goal should be to buy wins.

It is important to get the right people on your bus. However, in order to do that, you need to figure out exactly what needs to get done and hire people who can do it.  Don’t get caught up in fancy titles, big salaries, stock options and what looks good to the outside world.  If you want to be successful you must be in the business of plugging gaping holes and buying outcomes.

If you need more customers and sales, hire someone that you know can and is incentivized to close business.  It doesn’t matter what you call him, what matters is that he can produce the result that you need to survive and thrive in your business.

5. Why do you like him? Because he gets on base.

Step 1 – figure out what success looks like for the role you need to fill.  Step 2 – don’t hire anyone without a proven track record of achieving that outcome.  Step 3 – Get rid of (or trade) anyone who can’t fulfil their role or who is polluting the office environment.

6.  Where on the field is the dollar I’m paying for soda?

It is good to be frugal and smart with your money but it never pays to be penny wise and a pound foolish. If you want to grow your business profitably, focus on the items that will have the biggest impact on your bottom line and cash flow first. There’s no point focusing on shaving one or two thousand dollars off your fixed expenses if you’ve got $25,000 tied up in dead or slow moving inventory. To make good decisions and take action that boosts your bottom line, you need to measure and track your financial KPIs regularly.

7. I’m not paying you for the player you used to be, I’m paying you for the player you are right now.

While you might get away with recruiting based on potential, in the end, you can only reward based on results. Time and time again I have seen business owners struggle with the decision to let salespeople, who are not meeting their targets, go. The decision is really a very easy one. Someone has to go. It’s either them or you. You can’t win a baseball game without putting runs on the board and you can’t build a successful enterprise without hitting sales targets consistently.

8.  It’s day one of the first week. You can’t judge just yet.

Patience is a virtue. Don’t pass judgment judge too soon. If someone’s not performing or the team is not quite gelling, take some time to investigate, ask questions and make adjustments. All changes to the team will have a natural breaking-in period.

Too much tolerance can become a vice. Good performers tend to contribute value very quickly – both in terms of their attitude and work ethic. The typical 3 month probation period is more than enough time to make a fair evaluation. When the writing is on the wall, have the confidence to cut your losses and move on.

Despite the Oakland A’s disadvantaged revenue situation, Billy Beane took his team from bottom of the ladder to World Series contender in just a few months. By re-evaluating the strategies that produced wins on the field, they built a winning team with only one-third of the salary budget of the New York Yankees. To do this, they had to do more than just play better a better game of ball. They had to transform the playing field completely.

Your executive summary can make or break your business plan

While only 2 pages in length, the executive summary is by far the most  important component of your business plan or proposal. It is designed to  summarize the key elements, capture attention and most importantly, showcase the  financial highlights.

So, if you only have 2 pages to convey a significant amount of information  and summarize the financial upside, how do you decide what to put in and what to  leave out? Which financial features are critical to emphasize?

Depending on the purpose of your document and the intended audience  (investment, sale, partnership, strategic alliance, joint venture etc.), you  will want to tailor your financial disclosure to suit their needs and  expectations. What would they want/need to see in order to make an informed  decision?

At a minimum, you need to clearly state what financial input is required from  them and what they will get in return – i.e. a share, debt instrument, license,  exclusive right etc. Next, highlight the expected net profit and cash flow over  2-3 years. Also, give a clear indication of return on investment (ROI) AND a  realistic, well defined exit strategy.

In an executive summary, it is important to be succinct and focused. It is  not the time to tell your life story, overpromise with unrealistic projections  or overwhelm with too much detail. You will only get one chance to make a good  first impression and capture the attention of the reader. In fact, many  sophisticated investors have told me they rarely read a business plan or  proposal in its entirety. They make their decision on the strength of the  executive summary and their assessment of the owner/manager (in terms of  character, knowledge, skills and tenacity).

Focus on “what’s in it for them”. Show them clearly how they can benefit and  when the result will be crystallized. Give them enough detail to understand the  industry, opportunity and unique solution you provide. And most importantly,  clearly summarize the key financial metrics of profitability, cash flow and  ROI.

In short, make it EASY for them to invest in YOU.

Article Source: http://EzineArticles.com/6107414

Can you apply Warren Buffet’s best advice to your small business?

Discipline and attention to details is more important than ever if you want to succeed in challenging economic times. Take a look around… competitors are closing their doors – which means more potential customers for the businesses that DO survive. And in times like these, it’s going to take more than “thinking outside the box” and goodwill with existing customers to secure the survival of your business.

You may have been lucky over the past few years – you may have found it possible to operate without a detailed, written plan and systems/processes. But the global economic crisis has changed all of that. If you want to thrive, there is only one thing that is for sure – uncertain times call for deliberate decisions and proven practices. So here are my top tactics to recession-proof your business.

1. Begin with the end in mind

If you don’t know exactly where you are going, how will you know when you get there? Now is the second best time to decide on your strategy, set your goals and document tactics and timelines. Keep it simple – write a 2-3 page summary of what you intend to accomplish in 3 months, 6 months and 12 months.

2. Focus on cash flow not profit

You cannot buy a house or a new car with “profit” from your business. Make it your mission this year to develop and maintain a weekly/monthly cash flow forecast for your business. This is not hard to do but it does require discipline and a simple excel spreadsheet. If you need help, I recommend that you consider signing up for Imagineering Profit. With just a few numbers from your Balance Sheet and Profit and Loss statement, Imagineering Profit can calculate your cashflow for you and give you the insight that you need to get your company operating in the black!

3. Collect your debt NOW!

How many days does it take to collect your debts on average? Whatever it is, make it your goals to reduce this by at least 10 days. You may be surprised to know that if your annual revenue is around $500,000, you could save yourself up to $2,500 in interest carrying charges simply by collecting your debts 10 days quicker on average. Pay attention to customers who are taking longer than usual to pay. Now is not the time to be extending too much credit if you are concerned about their ability to pay.

4. Rank your customers

Do you know who your best and worse customers are? Have you ever tried to calculate how much profit you are making from each customer or group of customers? If you don’t know the answers to these questions, today is the best time to start tracking and measuring this.

5. Fire your worst customers

Everyone knows that is cheaper and easier to garner incremental business from existing customers. Some even argue that it is 6 times cheaper and 75% easier to convert a sale from someone who already knows and trusts you. If you have unprofitable customers, get rid of them and focus your attention on your best customers.

6. Trim your product range

Contrary to popular belief, it is better to have money in your back pocket than tied up in stock sitting on your shelves for months on end. The longer it sits and does not turn over, the more it actually costs you in lost opportunities. Spend 2 hours today calculating which of your SKUs or stock lines are your worst performers; make it a priority to sell those quickly to release some much needed cash. Consider reducing your overall investment in stock. Compile a spreadsheet of all the SKUs you carry and then run two separate columns – one for how many units you sell on average of each per month and the other being the total units on hand. If your stock gets delivered quickly, you should never be carrying more than one month’s worth of sales at any given time.

7. Monitor your breakeven and key numbers

The most important day of the month is the day that you break even and start making a profit. If you don’t know which day of the month that is, you need to find out today. Knowing this number allows you to monitor your performance and take measures to correct issues right now. Waiting until the end of the year for your accountant to produce financial statements is not a good idea – if you are behind, you need to know now so that you can correct the situation.