BUSINESS STRATEGY & GROWTH • November 8, 2013
2 minutes Read
Want to know how your company can improve its chances of getting working capital? Start implementing proper planning and documentation best practices. Stick with us on this. Even if you don’t need a lot of paperwork to apply for funding—as is the case with CAN Capital—good documentation makes for a more organized, even a more successful, company. And it doesn’t have to be tedious. We have six simple suggestions to get you started.
Document your goals.
First, you need to determine your business’s goals and objectives—and document them. This will be a big help in deciding how to plan your business.
Goals are the foundation for all of the documentation suggestions to follow. They will inform your business plan, your pitch, your budget, and more. If you’re having trouble deciding on tangible goals, close your eyes and let your thoughts roam.
Ask yourself some questions and write down the answers (you can always edit later). Where do you want to be in 3 months, 1 year, or 5 years? How big do you want to be? How involved do you want to be in your business?
Create a business plan.
Your goals are documented, and you are ready to tackle the next challenge: creating a business plan.
This is an essential step that can be the difference between success and failure. You can dive in and just do it, or hire someone to guide you.
Either way, start with a positive, concise, and fact-based description of your business: what it does and what is going to make it unique, competitive, and successful. Describe special features that will make your business attractive to potential customers, identify your company’s primary goals, and include objectives, such as a timeline of the goals you hope to achieve.
Explain how you plan to make your business profitable and within what period of time. Will your business provide you with a good cash flow?
Think about it this way: making decisions—and documenting them—in advance will allow you to maximize the time you spend generating income.
Develop a pitch.
You need to be able to sell others on your idea—quickly. Have a descriptive, intriguing, well-thought-out pitch ready at a moment’s notice. This is the first step in building a relationship with potential lenders and potential customers.
Since you’ve already documented your objectives, work backward from a goal. What do you want? It has to be specific.
In addition to perfecting your pitch, make sure you deliver it to people in ways that they can relate to so that your message doesn’t fall on deaf ears. In short, you need to speak their language.
Set a budget.
And stick to your budget. It’s easy to get caught up in the excitement of starting a business, but if you run out of money, you run out of options.
Project your cash flow.
While this is may be obvious, projecting your cash flow helps you stay on top of your cash flow. It can help you avoid potential speedbumps that may that may take you out of the running, as we discussed our recent blog post, “Get Real Get Funded.”
There are many free business templates available for download online, including a cash flow projection spreadsheet template courtesy of SCORE. However, don’t breeze through this step. Depending on your capital provider, you might be held accountable for faulty financial projections down the road.
Keep an eye on your financial documentation.
This final part is fairly straightforward. If you don’t know how much money is coming in and out, you can go out of business. Also, updating your budget and other financial documents regularly will keep you focused and on the path to running a successful business.
It’s easy to put off proper documentation and planning until “later.” Don’t wait. Don’t set yourself up for a mistake. Get your records in order early, plan wisely, and sleep peacefully knowing that you’re better prepared.
Photo credit: Freer/shutterstock.com
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