Budgeting with LivePlan Software
When you are setting up a new business, you need write a business plan. There are many moving parts and many areas that need to be considered. Using software like LivePlan will help walk you through the process step by step.
What is the plan for your company?
Who is your Management team?
Who are your Advisors?
What are the costs involved in running the company?
The Business Plan breaks down into several parts:
The Executive Summary:
Problem: What is the compelling problem your company will solve?
- Solution: What is your company’s unique solution to this problem?
Market: Who would this benefit?
Competition: Who else out there is doing the same niche as us?
Why Us?: What are is our business doing that is better than the competition and what really sets apart from our competition?
This allows you to specifically define what your company is being created to do. You will answer these basic, broad questions about your company.
There are prompts and examples you can follow to map all of this out. What unique solution to a problem will your company offer, and who would that benefit? What other companies would be your competition? What marketing strategy might be the most effective?
Having a Plan will prevent you from spending money to advertise on Google, for example, if that is not going to reach the people you are trying to get as customers.
For each category, there are instructions on what to consider and how to complete it. You can even look at existing Plan Examples to get ideas, and there is an AI option to write a text for you.
The Opportunity
Here, you plan out in more detail what your problem is, what your solution is, your market size, and your competitors. You also explain in more detail the advantages your company has or can provide over the competition.
The Execution
Not only do I want to do this, but this is the detailed map of HOW I want to do this. This is the plan not only to increase sales, but also exactly how to increase those sales. Now that we know the Opportunity, we want to create a Marketing Plan to reach the customers we want to target.
Once we have marketed to our potential customers, we also want to have a Sales Plan in place so we can convert those sales leads into actual customers.
In addition to Marketing, you will need to consider where you will be located and in what type of facility. You will need to map out the technology you will need to use (such as accounting software, sales software, etc.) to drive your operations and success.
Consider also the Equipment or Tools you will need for your company. Here, list the assets needed to do the jobs; for example, a Plumbing company will need drain snakes, pipe cameras, etc.
You also want to decide on key milestones: which dates should you hit certain goals? And what metrics will you use to determine this?
The Company
What is the ownership of the company? Is it just you, or do you have partners?
What does the management team look like, and what will they be responsible for?
Will you have professional advisors outside of the company that you work with? Examples of those professional resources are Accountants, Tax Preparers, or CPA’s?
The Financial Plan
The last thing you consider is the Budget. Once you have a clear plan, you can determine your revenue, expenses, and the assets you need to purchase. You will also consider which personnel you need to hire for the roles within your company and the associated costs.
You will go into more detail about how much your materials will cost, what your labor will cost, how much your assets will cost, and what you expect your tax payments will be. If you have a company that pays dividends, that leads to more questions. For example, what will dividend distribution look like, and how much do you think it will be?
Once all of this is done, we can see a graph showing what your cash flow will look like based on this information. Will you need to take out a loan to improve cash flow, and how will you repay it?
Once your Business Plan is mapped out, you can use the Dashboard to look at actual numbers and compare them to budgeted numbers. You can even connect LivePlan to QuickBooks to see how your Forecast, Budget, and Plan compare with your actual performance.
The Dashboard also gives you quick, easy snapshots of how your company is doing; it breaks down Revenue, Operating Income and Margins, Expenses, Costs, your Net Profit, and your Net Profit Margins in clear, easy-to-read boxes on one page. You will also be able to see a snapshot of your Accounts Receivable and how long it takes your customers to pay, as well as your Accounts Payable and how old your invoices are.
You can also look at Trends, which will show you how your Revenue increased or decreased over time. You can look at your Balance Sheet, which will show your Cash Flow. While your accounting software can also pull financial statements like cash flow statements or profit and loss, Liveplan allows for future adjustments.
This is key to determining whether you need to take out a loan, whether you can pay for your inventory or materials, and where you may need to cut back expenses or increase revenues.
LivePlan is a robust and detailed program that will take you more than a few days to fill out. Typically, you will find that this takes between 2 and 4 weeks to complete all the research and provide good information. However, once you do have the set up completed, you will be able to pull financial forecasts to help your business stay on track. It’s easy to update different scenarios after initial set up to review financial projections and keep your business in a great financial position.
For more information on LivePlan and to purchase it, please use the link below:
For more information on determining what your estimated taxes would be, please use the link below:
