HOW MUCH BUSINESS WILL MY FIRM GET?

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The answer is SALES FORECAST which is a critical component in business plan. SALES FORECAST is an estimate of how much money a business will bring in over a given period. Typically, a business plan included at least three years of annual sales forecast to determine the sales. The process of developing your sales forecast will be closely associated with the work to determine market potential and should follow the same principle of using secondary sources first.

Quick Note: Market potential provides information of how much money a group of potential customers will spend on a particular product or service.

However, the sales forecast can provide more accurate result if we use more sources of information to prepare the forecast. The following sources are the most likely which can be used:

·        Industry Statistics

Library information on specific industries that used to determine market potential can be used to understand correlations of sales which is describes as a known facts about an industry that can be expressed as a ratio of the industry’s sales.

·        Customer buying intentions

With help of primary research as questionnaires for the market potential, you can basically intent customers to be the potential customers and offer the service or product with particular price.

·        How long it takes to get new customers

If your business is new, you will be aware about how many hours of selling or how many calls it takes to generate single new customers. However, the test marketing which is a process of trying to sell product or service to a limited number of customers and carefully measuring factors like customer feedback and how long it takes to make a sale. The investors are more likely interested in how easy you can get a new customer with your product or service which shows the speeding operation of your company in the market. But the fact is that it takes more time to make a new customer than serving the existing one.

·        Expert opinion

The other best way is to confirm the expert’s opinion because interviewing several people who have expertise in your particular industry can help you to guess the sales forecast range for you business plan.

·        How much business the competition gets

The idea is to monitor the sales forecast of you direct competitor for the same particular industry. It will give you an idea of your estimate sales forecast as you have same potential customers.

·        All the business out there

This explains the idea of all the business in the market related to your industry can also help you to estimate the sales forecast of your company.

·        The amount of business the firm can handle

Usually the most business can handle 100% of their capacity which helps keep other people estimating about your sales forecast in perspectives. Mostly the capacity is determined by the fact is the firm can handle the expenses to grow his industry.

WHAT BUSINESS WILL I BE IN?

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To start a business, Entrepreneurs need a plan before executing any idea. There are different forms of self-employment and different things to examine who should be in business as an Entrepreneur. As small business is an independently owned organization which seeks profit for its own and have less than 500 employees. Small business is not based on the number of workers working in a firm and there is not a limited requirement for small business; also the profit can vary depending on field of business. For an entrepreneur the best way is to start a small business with a mixer of their passion.  However, to start a new business an entrepreneur is someone who risks money but being a risk taker they need to be realistic about their plan, so they take the help of CANADA REVENUE AGENCY which is the department of federal government that acts as Canada’s tax collector and helps to carry the taxes of each service an entrepreneur is paying from their pockets. There are following questions that an Entrepreneur will go through before making a plan.

·         DO I HAVE AN ENTREPRENEUR PERSONALITY?

Being an entrepreneur itself is a freedom but it also comes with a lot of responsibilities. The attitude and the behavior of a person depicts its actions if a person is confident , responsible, self-controlled he will automatically gain a lot of people interests in his actions but if the person is shy, irresponsible and introvert he is not going to attract a lot of customers. For example the students who get average grades always become a good entrepreneur and the above average 80-90 becomes good employees, whereas the students who carry above 90 mostly become professors. It is just a rough calculus to show the most average of entrepreneurs born from the average students who like to create their own way to live a life, and it is all about a personality of entrepreneur. So before you start a business write the qualities you have and take a look if you can be good employee or a good entrepreneur.

·         WHAT SORT OF ENVIRONMENT WILL I PREFER TO WORK? 

There is a strong emotional component in entrepreneur i.e. their passion which provides the tremendous amount of energy to start a firm. The other emotions in business are not important that are just provocative. Now a days, people prefer to work at home as they think it will be more easy and comfortable for them but the reality is working from home does not sound professional for example, you arrange a meeting in your office which is in the basement of your house. Do you think the customers will be comfortable to come to your basement? The other reason for the people who wants to work from home is that they have a benefit of taking care of their kids but it can be a disadvantage because it will be harder to manage time with kids and work at the same time. To make a good environment around, it is better to work from an office and you will have a good image about business too.

·         WHAT IS MY BUSINESS IDEA?

A business idea is all about the products or services you want to introduce in the market. The business idea is very important in creating the plan because everything revolves around that product or service. The major concepts needed before finalizing the idea are the specialization and targeting. The product or service should have a speciality which will makes it different from other products or services in the market place. For example, if you start a business of clothing then use the special kind of cotton, silk or textures to differentiate your products from others. The other concept is really important when you find the speciality in your product then find the target market which will buy your product in the market.

·         WHICH FORM IS SUITABLE FOR MY BUSINESS?

There are different forms as I told you in the starting but you need to identify the form which will be suitable for you and your money.

SOLE PROPRIETORSHIP-It is a legal form of business where only one person owns and has the legal rights to operate it. It has unlimited liability for the debts of company.

GENERAL PARTNERSHIP-A form of business in which two or more people owns and operates the company and each owner has unlimited liability for all the debts of the company.

CO-OPERATION- A legal form of business that exists separately from its shareholders (owners), who have limited liability for the company debts.

OTHER LEGAL FORMS-Limited partnership, Limited liability partnership (LLB) and worker co-operatives.

·         HOW SHOULD I START MY BUSINESS?

Now is the time when you take your first step in the business as making a business plan. Before taking critical decisions about manufacturing, marketing, finance and pricing strategies in real, you will need to prepare a proofread for you to start the initial steps of your business. REMEMBER: most of the things in plan are rewritten because you always make mistakes in your first plan and then learn from the scratch plans to made before to make the final first step of your business.

Go Ahead!

Take the first step and write your business plan.