A. It is what is needed to start a new business.
B. It is what needs to be continually updated in order to successfully run a business.
C. It is what is needed to apply for a business loan.
D. It is what is needed to show how my business is performing.
What do you thing the correct answer is … ? I guess you could probably put forward a good argument for all four options – I am not sure even if you had three lifelines left you would get the correct answer. 50/50 would narrow it down. Could you rely on the audience? Phone a friend would probably not want to commit. The answer really depends on where you are coming from and although I have my favourite choice I don’t have the answer.
Each one of the options has a specific objective and each objective requires a business plan and a cash flow forecast. There are many specific objectives and goals in running a business, but the key objectives are always the same (we will now move to the X-Factor)… in no particular order …
1. A detailed and measurable marketing strategy and plan.
2. Information and detail of the competition.
3. An excellent understanding of who your customers are.
4. A detailed knowledge of your costs (down to the last penny).
5. Your daily bank balance.
6. Your profitability – How much profit am I making on every widget I sell, every course I run, every photo session I carry out etc.
I am sure you can think of plenty of others, depending on the type of business – for example, managing stock levels and customer service to name two, but one thing is for certain – you will need those six pieces of information. Not just because I am telling you that’s what you need, but you cannot run a successful business without this information. So once I have this information I can successfully run my business? No … but it gives you a good starting point!
There are a number of factors that can affect the success of a business … but we have run out of time now and this will be covered in the next edition of ‘Who Wants To Be A Millionaire?’…
Peter Davis, Business Loans Manager