Monthly Archives: January 2022

Business Plan Financial Projections: Stop Worrying About Being Right…

Business plan financial projections seem daunting because
they are so uncertain. This very uncertainty, however, is
what makes preparing them easy because you can’t possibly be
right. You can’t predict the future. None of us can. All you
can be is competent in the way you prepare your business plan
projections.Before you finalize your business plan this year, consider
these six caveats to preparing your business plan financial
projections:1. Don’t offer pull-out-of-the-air, “conservative”
guesstimates about getting some percentage of the overall
market demand or year-over-year growth.It is a mistake to assume that business investors will
appreciate your being conservative with your business plan
financial projections in the early years of your business.
Don’t think for a Wall Street minute that presenting
“conservative” business plan financial projections indicates
“realism” to prospective business investors. Business investors
invest for one reason: to earn a return on their money. How
long the money is invested influences the amount of the return
earned. Let’s say a business investor wants to triple an
investment. Well, if that investment triples in 3 years, the
return is 44%. If it triples in five years, the return is
25%. Adding just two years to the investment period nearly
halves the return! Now do you see why time is so important
to a business investor? Here are a few other examples: let’s
say a business investor wants to:Make 5 times an investment in 3 years = 71% returnMake 5 times an investment in 5 years = 38% returnMake 7 times an investment in 3 years = 91% returnMake 7 times an investment in 5 years = 48% returnMake 10 times an investment in 3 years = 115% returnMake 10 times an investment in 5 years = 59% returnSo, while you may find it attractive to figure out how to
make “just a living” until the business venture proves
itself, you now understand why business investors want sales
and earnings to grow absolutely as fast as possible, without
being deceived, in your business plan financial projections.
On the whole, business investors are risk averse only to the
extent that they don’t want to lose their money or tie it up
in a low return investment. Typically when you make the claim
that your business plan financial projections are “conservative”,
it usually just means that you have no idea how and why you’ll
achieve a certain level of sales within a certain time frame.
Interesting, these kinds of estimates, provided that you’ve
done some good thinking about market segments and overall
demand, often turn out to be too low. Remember, it’s just as
bad to underestimate your sales, as it is to overestimate
them.2. Avoid calculating costs as a straight percentage of
revenues.Sure it’s easier to do things this way, especially with
Excel and other business plan financial projection software.
Costs are real, however. You need to know what they are very
specifically. If you’ve done your homework in developing
your business plan, then you should already have this information,
or at least the basis of it. Just estimate and calculate your
costs on a product-by-product basis.With these warnings in mind, use the following steps to
develop your business plan financial projections:Think about what percentage of the overall market share your
competitors already own. Assume that they will continue
their present trends in growth. (Note: some competitors may
already be trending down and losing market share.) Temper
your market share estimates with some discussion of how your
entry into the market will affect these trends. Then,
estimate the percent of total, potential demand that remains
available to you.

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Now, based on the limitations of your operations plans,
calculate how much of this remaining available demand you
can achieve. This is a very simple calculation. Start with
your overall productive unit capacity and factor it by the
expected yield of sellable product, then multiply these unit
sales by their respective selling prices and voila, you have
the revenue numbers for your business plan financial projections.Let’s take an example.Your research indicates that 2 out of every 10 females age
23 to 55 will under go some type of non-invasive cosmetic
treatment in your area. Your research also shows that this
number is expected to grow 20% each year over the next 5
years. There are 40,000 females in your target market. You
identified four competitors in your target market. These
four competitors currently handle on average 6 procedures a
day. You plan to start a non-invasive cosmetic treatment
center that uses the most advanced technology and is thus
capable of performing an average of 7 procedures a day.
Using this data you calculate the following statistics
about your market and market potential:Total market 40,000 females x 20% = 8,000 procedures per
year4 competitors x 6 procedures x 250 days = 6,000 procedures
per yearAvailable procedures: 8,000 less 6,000 = 2,000 per yearYour productive capacity: 7 procedures a day x 250 days =
1,750 or 21.875% of the total market. The average selling
price for a procedure is $400. Thus, the revenue for the first
year in your business plan financial projection would be 1,750
procedures times $400 or $700,000.Now, let’s say you’re were projecting 2,200 procedures per
year. This would mean that you would have to alter your
operating plan to be able to perform 2,200 procedures. You
would also have to demonstrate how you would capture an
additional 200 procedures from your competitors.
Granted this is an over simplified example, but it should
give you a feel for how this process works.Regarding price, in most cases you should have a clear idea
of how to price your product or service. There are usually
other, similar products or services out on the market.
Unless your competitive advantage is a cost reduction and/or
unless price is a critical basis of competition, just
estimate the value of your improvement and add it on to the
average price currently offered in the marketplace. In order
to make this estimate, you’ll have to be talking to
potential users. Find out what they pay now. Find out how
they feel about the current price. Ask them if they’d be
willing to pay more and how much more. If you ask enough
people, you’ll get a general idea.3. Never determine price on the basis of a margin you think
is attractive.The market will pay you only for the value you deliver,
which is determined by the consumer paying the final price.
It’s easy to make the mistake of thinking that a 20%, 40% or
even a 60% margin is great. Never considering that if the
product or service you’re offering provides a real
advantage. If you do this, you may be grossly
underestimating the price you can get in the marketplace and
underestimating your business plan financial projections.
Consumers don’t think in terms of margins. They could care
less about what you ought, “reasonably”, to get for your
product. That’s why you must find out the most that they’ll
pay. This is the value of your product or service. Come up
with some reasonable basis for determining this real value.
Keep in mind the obvious: If the consumer’s value on the
final product or service is less than your cost plus a
reasonable profit to keep your business growing, you’re in
trouble. Your business model will not be sustainable and your
business plan financial projections useless.Now calculate the costs of manufacturing and distributing
your product. These costs flow directly from your revenues
estimates and operations plan. How much will it cost to
purchase what equipment and materials, hire what personnel,
engage in what selling efforts, pay what accountants and
lawyers, rent what kind of space and so forth, to achieve
the revenues you’re showing in your business plan financial
projections. You must be very specific. Project your costs
over time. Keep them tied to the units you need to sell to
achieve the revenues in your business plan financial
projections.Obviously, costs and revenues work hand in hand.4. Keep your fixed cost low.Keep in mind that none of these revenues and the cost
estimates are going to be perfectly accurate, which means
the amount of profit or cash available to pay “fixed” cost
isn’t going to be accurate either. As a result, you can lose
your shirt trying to pay for equipment, a receptionist, or
other activities that don’t contribute to the sole objective
of making sales. Wherever possible, rent space, rent time on
equipment, answer your own phones, etc. To the extent that
you keep costs variable in your business plan financial
projections, you can cut back when sales are slower than
expected. It’s the worst situation to have a big,
well-furnished office with an expensive secretary who
needs the job, when the money isn’t coming in. High fixed
costs in your business plan financial projections also send
the wrong message to investors that you know more about the
“form” of doing business than about actually making money.Now pull all your numbers together to prepare the financial
statements that summarize your business plan financial
projections. You need three basic statements: cash flow
analysis, income statements, and balance sheets. All of
these come directly from the above calculations. Your cash
flow analysis indicates when and what amounts of capital
infusion you’ll need to start and sustain your business plan.
Make your income and balance sheet projections on the
assumption that you’ll get the capital. For the first year
or two of your business plan financial projections, present
each of these statements on at least a quarterly basis.
Monthly is best. I suggest doing a 24- or 36-month projection
depending on your growth plans and changes in the industry that
you foresee. Follow these monthly or quarterly projections with
annual projections till you cover a span of 5 years.Finally, run through some “what-if” scenarios or sensitivity
analysis. Though you business plan financial projections should
be based on your best, and best-supported estimates of costs
and revenues, you know you can’t be 100% right. That’s why it’s
important to identify those elements or assumptions of your
business plan financial projections that you feel are most
uncertain. Write out the nature of the uncertainty and the range
you think the estimates will fluctuate up or down. Then change
the estimates accordingly and re-run all your statements.
Pay close attention to how your business plan financial
projections, especially cash flows, change when you change
each assumption. This will help you determine how much
“cushion” you have available and, if business isn’t going
according to plan, at what point cash will become an issue.

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5. Do not simply assume that costs and revenues may be
“off”, up or down, by some percentage.Again, I know that Excel makes it easy to do this. For all
the same reasoning as above, stay focused on the assumptions
and details that make up your business plan financial projections.
It’s the details you need to examine for their sensitivity and
their impact on the bottom line. You only need to alter those
specific items that you’re most uncertain about. If it’s revenues
that you’re worried about, is it the price, the volume, or
both that concerns you most? How big a swing in the estimate
are you worried about, in what direction and why? If it’s
your cost projections that are keeping you awake at night,
which cost elements and why? Things like rents and labor
costs can be determined fairly accurately. But maybe you’re
unsure about materials or labor availability or how
efficiently you can produce your products or provide your
services. Maybe you’ll have to pay extra to ensure their
availability. This kind of thinking forms the basis for running
“what-if” or sensitivity analysis on your business plan financial
projections.6.Do not include every possible business
plan financial projection scenario in your business plan.Both you and your investors need to know what aspects of the
business plan financial projections are most uncertain,
represent the most risk, in what direction, why, and how
they affect the bottom line. Having hundreds of alternative
scenarios to sort through is like a man with two watches
showing two different times… he never knows what time it is.
Lots of alternative business plan financial projections also
indicate that you’re not too sure about anything. This is an
impossible way to communicate with business investors, manage
your business, or make important decisions. It’s much more
effective to identify the risky areas of your plan, tell why
and how they impact the bottom line and what actions you
plan to take if they occur. This helps you and your business
investors stay focused on the high impact areas and to think
clearly about whether other factors should be considered as
well. It also lends more credibility to your talents and
increases the likelihood of your plan’s success.Finish this discussion with a summary of the critical
aspects of your plan and related contingency plans. If
you’ve followed all these steps, then you can figure out
what you’ll do if your actual performance turns out to be
different than your business plan financial projections.
Remember, you’re purpose is to demonstrate to business investors
that you’re competent; worrying about protecting their investment
and running a business, not just flying by the seat of your pants.

Concrete Rot or Concrete Cancer

If you want a lifetime job, it could be painting the Sydney Harbour Bridge – once you finish you probably have to start at the other end again. The painting continues in order to stop the steel from corroding, and steel corrosion is what causes concrete rot, otherwise called concrete cancer or spalling.

How does concrete ‘rot’ ?

Concrete is used in most commercial and residential buildings in a host of applications such as slabs, stairways, post and columns, support beams, balconies and verandahs, walls, pathways and pools. Huge volumes of concrete are involved in structures like bridges, wharves and high-rise towers. The concrete is generally reinforced using steel bars or mesh and in the larger developments significant amounts of steel are required for added strength.

The enemies of reinforced concrete are water and air. If these elements gain access to the steel enclosed within the concrete it can corrode – the steel expands as it breaks down and fractures the surrounding concrete. As the concrete cracks and crumbles, there is even greater opportunity for water and air to contact the reinforcing steel and the process intensifies. There are obvious safety issues as the structural integrity of the concrete is reduced.

How to identify concrete rot

It can be happening unseen within the concrete but as it continues it becomes more evident. You may notice rust marks running down the concrete, or the concrete flaking, cracking or crumbling. In extreme cases, large sections of the concrete will fall away, exposing the rusted reinforcing steel. Remedial treatment can involve substantial and expensive corrective measures.

A professional building inspection can identify the problem or warn of potential for future trouble. It can be water pooling somewhere, small cracks in the concrete or reinforcing too close to the concrete surface. Prevention is certainly better than cure with concrete rot – it may simply be a matter of improving drainage, painting a surface or sealing cracks with some sort of mortar or epoxy filler. If you have any concerns about concrete rot, it pays to get some expert advice.

I do like to be beside the seaside

Well yes, most of us do but it’s here that concrete rot can be even more prevalent as chlorides in the moist, salty air react more aggressively with the reinforcing steel. Concrete rot is an ever-present issue in locations close to the sea and property owners need to be constantly on the lookout for any signs of deterioration and to ensure that protective measures are maintained.

The same can be said for chlorides associated with swimming-pool chlorine or saltwater pools.

Also, there is often moisture close to the ground surface in beachfront blocks and water can soak up into the structure. Large buildings with basement or underground car parks can experience the same problem with groundwater seepage.

In summary, concrete rot is a common problem. It can lead to significant structural damage which may be difficult and expensive to repair. It is not always easy to detect, it can result in serious safety implications and it can be avoided by getting expert advice and using the right materials and appropriate construction guidelines.

Vitamin Supplements For Complete Diet

Every day, you are bombarded with advertisements on television, advertisements in magazines and newspapers with reasons why you ought to take a selected manufacturer’s vitamin complement. Whether it’s far an antioxidant, vitamins for universal fitness, or anything else, there are actually thousands of different vitamins to choose from. It is an increasing number of difficult to pick out the great one for you and your life-style, to help you reap the maximum benefit. Despite the plethora of motives to take nutrients, you could want to keep in mind the motives why you need to take these nutritional dietary supplements, that will help you pick the first-class one. One primary cause for taking nutrients is to combat your stomach acid, particularly if you have a sensitive stomach. Others may additionally find that they need a nutrition to help them with their daily food, to ensure that they are getting all of the vitamins needed each day.

Increasingly, people are studying the significance of digestive enzymes of the part of their weight loss plan. Digestive enzymes have an effect to your weight, but so does your frame’s ability to correctly digest the meals which you provide for it. Although digestive enzymes are created for your belly and to your mouth, your small gut is the a part of your frame that breaks down those meals nutrients into usable forms for your body to soak up. This way, you can use this meals for electricity production, as opposed to fats storage. Despite the truth that digestive enzymes are in your mouth, raw ingredients you are taking domestic are replete with enzymes, but after you cook them, it kills a few of the enzymes available and makes them harder to your frame to digest them. For this purpose, you may want to remember taking a digestive enzyme supplement, due to the fact this can help in digestion in addition to helping with weight stabilization.

If weight stabilization or weight reduction is a situation to you, it’s far critical that you remember the fact that it’s far important in your body’s right function to eat an expansion of wholesome fats. These are extremely essential molecules observed on your frame, however there are differences between healthful and dangerous fat. Trans fat and partly hydrogenated fats are extremely risky, due to the fact they’re created via chemically treating oils to render them solid. This is a totally less expensive way for agencies to maintain processed and frozen foods. However, they do now not make the food flavor any higher; they just pad the wallet of the producer. In addition, polyunsaturated fatty acids may be very dangerous on your frame as properly. Therefore, it is very important for you and your trendy health to have a whole weight loss program that incorporates healthful fats, in order to sell hormone and mobile feature, in addition to improve your HDL, the best cholesterol.

Healing Herbs

Healing Herbs can make all the difference in a food’s taste. The satisfactory manner to examine the one of a kind flavors and mixtures of herbs is to taste them one after the other. Take a moment to odor the herb after crushing it gently together with your palms. Try chewing at the leaf to get to recognise its taste. Review its traits, and study up on it if you want to research greater. Try one-of-a-kind mixtures to find out flavors you want. It’s an ordeal-and-error exploration, so have amusing with it. Consider experimenting with popular culinary herbs including basil, dill, oregano, thyme, rosemary, lemongrass, chives, mints, cilantro (coriander), marjoram, sage, chervil, kaffir lime leaves, tarragon (French and Mexican types), Thai basil, and flat-leaf Italian parsley. We decide upon the flat-leaf Italian parsley to the curly parsley as it has greater taste and useful fitness properties. If a recipe requires fresh herbs and all you have is dried, you can alternative. Use 1 teaspoon dried herb for every 1 tablespoon fresh herb known as for inside the recipe. The dried herb usually has more focused flavor than the clean herb. This ratio isn’t always a difficult and speedy rule, though, because the depth of taste of dried herbs diminishes over the years Know about Healing Herbs.

Many humans end up vegetarians due to spiritual or ethical convictions that limit the killing of animals. Some sincerely don’t assume it’s cool to kill and trust we’re meant to be stewards and caretakers of the earth and its inhabitants. These humans do no longer wish to help practices that inflict damage or suffering on any creature who has the potential to sense ache. The small circle of relatives farm in which husbandry practices engendered a certain respect for animals used for food is becoming a thing of the beyond. Today, most of the world’s meat, dairy, and egg production happens on big factory farms owned by way of agribusiness conglomerates. Farming has turn out to be huge enterprise, and income dictate how the animals are dealt with, because of this they’re regularly kept and transported in overcrowded and unsanitary situations. A vegan weight loss program which includes lots of clean fruits and greens is a decisive action in the direction of a protracted and wholesome lifestyles, and at the identical time a powerful step closer to a sustainable future. In a time while international warming and different environmental troubles are so serious, it’s far heartening to realise that the same meals picks that give you the healthiest frame are also the maximum earth-friendly