June 30, 2008 by mrbizplan.

Probably one of the most uncomfortable things a first time entrepreneur has to attempt is their first set of financial projections.  Frequently I hear the following:

• “Well…I don’t know how many people will buy from me!”
• “I just took a WAG (wild ass guess).”
• “This is so stupid…why am I doing this!”
• “How the hell am I suppose to know?!?”

To all of them I answer “YOU are the expert in the business you are starting and You have to set some expectations for the banks and/or investors.” 

As you may have heard, “Financial projections are part art and part science”. 

So what does that mean?  Read the rest of this entry »

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June 16, 2008 by mrbizplan.

I grow tired of hearing the opinion that business plans are not a necessary component of starting a business.  In Mike Michalowicz’s blog post Business Plans are OUT! Here’s the New Way… he expounds on the virtues of the “Three Sheet Strategy” in lieu of a business plan. 

In a nut shell the “Three Sheets” are:

1. A Prosperity Pan - which is like a mission statement and vision statement wrapped into one.
2. Quarterly Plan - A summary of what needs to be done in the next 90 days to work toward achieving your “prosperity plan”.
3. Daily Goals - a typical dashboard approach to ongoing metrics.

While I agree that the “Three Sheet Strategy” can be a useful addition to a business plan for “strategic” purposes, it in no way can replace a business plan. 

Read the rest of this entry »

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