Ultimate Business Guide - Roger Keyserling (warren buffett book recommendations .txt) 📗

not fit everyone. It ought to abide by the mandatory rules and systems that are set by the franchisor. Therefore, you must examine if you are the right fit.

Before considering to venture into a franchise, you should do your due diligence. Read and understand the Franchise Disclosure Agreement, which indicates all the aspects, such as the responsibilities of the franchisor and the franchisee as well as any litigation that is involved.

Purchasing an Existing Business

Leslie Anderson explains, “Franchising is simply a method for expanding a business and distributing goods and services through a licensing relationship.”​

This comes with the advantage of not reinventing the wheel. With a business that exists, there is no guesswork since there is historical data, existing customers, employees, needed equipment, and inventory to operate the business.

An added advantage for buying an existing business is that it is easier to get finances and there is a lower rate of failure. Normally, many businesses fail within their first five years. This is mainly because revenue takes twice as long to generate than projected. Also, the expenses are more than expected.

One of the most important pieces of advice is to do your own research. A franchise owner has a vested interest in attracting franchisees, which means they’ll often take the opportunity to sound better than it actually is.

Buying a business is more expensive than starting a business. Ensure that you understand why the existing business is being sold. This can be due to obsolete inventory, policies, and work methods. Watch out for legal liabilities as well that is already existing in the business.

These other factors should be considered when considering to buy a business;
• What size of business would you wish to manage?
• Where is the location? What is the number of employees?
• What region would you want to do the business?

Once you have decided on the industry, location, and scale, ensure that you have chosen the type of business that fits your aesthetics.
 

Make it real and official.
Get all of the legal aspects out of the way early. That way, you don't have to worry about someone taking your big idea, screwing you over in a partnership or suing you for something you never saw coming. A quick checklist of things to shore up might include:
Business structure (LLC, corporation, or a partnership, to name a few.)
Business name
Register your business
Federal tax ID
State tax ID
Permits (more on permits here)
License
Necessary bank account
While some things you can do on your own, it's best to consult with a lawyer when starting out, so you can make sure you've covered everything that you need.
Here are some questions you can ask when looking for a small-business lawyer.

Simplicity is the ultimate sophistication. - Leonardo da Vinci

Write your business plan.
A business plan is a written description of how your business will evolve from when it starts to the finished product.
You can probably cover everything you need to convey in 20 to 30 pages of text plus another 10 pages of appendices for monthly projections, management resumes, and other details. If you've got a plan that's more than 40 pages long, you're probably not summarizing very well.
Here's what should be in your business plan:
Title page. Start with a name the name of your business, which is harder than it sounds. This article can help you avoid common mistakes when picking.
Executive summary. This is a high-level summary of what the plan includes, often touching on the company description, the problem the business is solving, the solution and why now. (Here’s what you should include in the summary and how you can make it appeal to investors.)
Business description. What kind of business do you want to start? What does your industry look like? What will it look like in the future?
Market strategies. What is your target market, and how can you best sell to that market?
Competitive analysis. What are the strengths and weaknesses of your competitors? How will you beat them?
Design and development plan. What is your product or service and how will it develop? Then, create a budget for that product or service.
Operations and management plan. How does the business function on a daily basis?
Finance Factors. Where is the money coming from? When? How? What sort of projections should you create and what should you take into consideration?
For each question, you can spend between one to three pages. Keep in mind, the business plan is a living, breathing document and as time goes on and your business matures, you will be updating it.

A Business Plan is also known as a:

Business Proposal Marketing Plan Business Strategy Marketing Strategy Sales Plan

Why do I need a Business Plan?

Lenders and investors are constantly presented with new business proposals. If you provide all the required information in a consistent format then lenders and investors can make an efficient and fair analysis about the viability of your business ideas. By preparing a comprehensive business plan you send a message to your lenders and investors that you have already made an objective assessment of your business ideas and that you are serious about your business plan.

This is also the same for online sellers to access brands and even some market places.

What is the Cost of Goods Sold (COGS)?

In a manufacturing environment, the Cost of Goods Sold includes the material costs AND the direct labor costs necessary to produce finished goods.

In a simple retail or wholesale environment, COGS can be calculated as beginning inventory plus purchases minus ending inventory. Ideally, this indicates the inventory consumed in the reporting period.

What are the benefits of a Business Plan?

Benefits of a Business Plan include:

Ensures you take a disciplined approach to analyze your business ideas. Shows your investors and lenders that you have systematically analyzed your business ideas. It helps you clearly define your goals and what you want to accomplish. It helps you identify and analyze your risks as well as your opportunities. It helps you assess the strength of your target market. It helps you define your day-to-day business processes and challenges. It helps you analyze costs and capital requirements.

What is included in a Business Plan?

While a Business Plan may vary in how it is organized, it can include:

Executive Summary: This portion of the plan summarizes your company. It can include an overview of your company's management structure, a description of your product/service, your goals, and a summary of your finances and marketing strategy.

Business Description and Mission Statement: This is a brief rundown of your business's history, ownership, and its mission or vision statement.

Product or Service: Here you can include a breakdown of what your product or service is, its unique features, any patents you may have, as well as any future products you want to develop.

Marketing Strategy: Your marketing strategy is how you plan to get your product or service in front of customers. This is where you can include your ideas for promotion (online/traditional methods), as well as how you physically plan to sell your product or service (brick-and-mortar, e-commerce, etc.)

More On The Ultimate Marketing Guide

Competitors Analysis: This section describes your competition and how you intend to compete against their current strategies.

SWOT: SWOT is an acronym for "Strengths, Weaknesses, Opportunities, Threats." A SWOT analysis evaluates these specific aspects of your business.

Operations Overview: An operations overview provides a glimpse into the daily operations of your business, including the management and staffing structure, human resources plan, your physical operational facility, and your production methods, such as quotas or manufacturing details.

Financial Plan: Your financial plan may include your company's income (profit and loss) statements. It can also encompass your capital requirements if you are pitching your ideas to investors. In that case, you may describe the investment amount you require and how you plan to repay this capital in a repayment plan.

How to write a business plan?

Research is your best friend. Find out whatever you can about businesses, markets, and competitors, this will give you a head start into drafting a business plan. I think this step-by-step guide by Entrepreneur.com is rather helpful. I’d suggest this as a compulsory read for those who want to write up a business plan for startups.

Think about the Dimension of the Business

Startups usually sprout out of people with a technology or business background. When they write a business plan most of the focus is on information that they’re experts on.

For instance, a technician is most likely to concentrate on technology and how it’s different from others in the market. If the plan is written by a business analyst, then sales numbers will be the central idea in it.

In reality, the business plan should encompass a broader vision, from technical details, sales numbers, marketing strategy to profits. It all needs to be in one place whether you’re showing it to a salesperson or the CEO.

Keep it short

Business plans should be short and concise.

The reasoning for that is twofold:

First, you want your business plan to be read (and no one is going to read a 100-page or even 40-page business plan). Second, your business plan should be a tool you use to run and grow your business, something you continue to use and refine over time. An excessively long business plan is a huge hassle to revise—you’re almost guaranteed that your plan will be relegated to a desk drawer, never to be seen again.

Know your audience

Write your plan using language that your audience will understand.

For example, if your company is developing a complex scientific process, but your prospective investors aren’t scientists, avoid jargon, or acronyms that won’t be familiar.

Accommodate your investors, and keep explanations of your product simple and direct, using terms that everyone can understand. You can always use the appendix of your plan to provide the full specs if needed.

Don’t feel intimidated

The vast majority of business owners and entrepreneurs aren’t business experts. Just like you, they’re learning as they go and don’t have degrees in business.

Writing a business plan may seem like a big hurdle, but it doesn’t have to be. You know your business—you’re the expert on it. For that reason alone, writing a business plan and then leveraging your plan for growth won’t be nearly as challenging as you think.

And you don’t have to start with the full, detailed business plan that I’m going to describe here. In fact, it can be much easier to start with a simple, one-page business plan—what we call a Lean Plan—and then come back and build a slightly longer, more detailed business plan later.

Start with a clear, concise executive summary of your business. Think of it as an elevator pitch. In no more than two pages, billboard all the important stuff. At the top, communicate your value proposition: what your company does, how it will make money, and why customers will want to pay for your product or service. If you are sending your plan to investors, including the amount of money you need and how you plan to use it. You have to know the whole picture before you can boil things down, so tackle the summary after finishing the rest of your plan.

Tip: One sentence business overview

At the top of the page, right under your business name, include a one-sentence overview of your business that sums up the essence of what you are doing.

This can be a tagline but is often more effective if the sentence describes what your company actually does. This is also known as your value proposition.

Finance your business.
There are a ton of different ways to get the resources you need to start your business. Take a look and consider your own resources, circumstances and life state to figure out which one works best for you.
Fund your startup yourself. Bootstrapping your business might take longer, but the good part is that you control your own destiny (and equity).
Pitch your needs to friends and family. It can be hard to separate business from personal relationships, but if you’re considering asking for a loan, here’s a resource you can use to make it as straightforward