Today the competition in the business, making success difficult to understand. Not having sufficient economic resources either owned or financed, and also knowing your product or service to be offered. Here it is important to determine the market and a niche that will direct.
In the past the business system the first thing that counted was the economic resources, then the process and ultimately the market (customer), now in the era of globalization, information and business systems have been reversed where the first is the market investigation.
Not knowing the market, such as not having a business vision or as the saying goes: “ If anyone does not know where you are going any road will take you to the wrong place”
Once you’ve determined how important this market should determine the processes that include activities that they apply to economic resources, supplies, technology, labor, etc.
Statistics show that on average, 80% of SMEs fail within five years and 90% of them fail to ten years, this indicates that the business has a low probability of survival and high risk.
This risk can be minimized only if it is a planning, but more intense than the implementation phase to start a business. Then in the future to maintain the viability of the search business with innovation and new markets.
This exercise helps budgeted figures make better decisions.
Therefore, for new business, taking into consideration the balance of initiation or business that is already underway, with the historical financial statements must make a financial plan which consists of the following activities:
1. Production Budget: What are design units that will be produced.
2. Investment in accounts receivable: For what was budgeted sales value (balance point) will be on loan and what will be the number of days in which to provide
3. Cash Investment: This is the minimum funds required to meet at a certain time, one or two months or more, sales and administration, salaries, rent, maintenance, and others.
4. Vendor financing to determine which suppliers will be the business and determine the days of debt that can be given.
This way you can calculate the initial investment and the contributions required to submit a new business.
The initial investment consists of investment in assets, funds available from suppliers and bank loans.
The contribution required of members, equivalent to investing in assets, lack of funding.
We therefore conclude that for business success is very important to know the market that leads the effort, which is like a vision. As with any financial planning is also another view which must go hand market research to make sound decisions and compliance purposes.
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