.THE BUSINESS PLAN

Every successful business operation prepares a plan to guide the owners and managers in their day to day activities.

In this plan is described the purpose of the business, its' owners, their backgrounds and experience in this industry, how the business is funded and the Budget.

The budget projects the sales and expenses for periods of time in the future. One month; three months; six months; a year, two, three and sometimes even more years. Generally, for the small to medium sized business, three years is a realistic projection period.

Although the budget is a simple guide to create, it must never be done casually. It requires considerable thought as you will come to realize in developing it. And that begins with a very important furst number developed. What do you think that number is?

To answer the question lets go back to last year's Highway (Issue Vol 33. No. 1 ) Return On Your Investment." because there is where we find the first number we need to begin our budget.

There was a Bank TV commercial some ten years ago which clearly illustrated what I am talking about. TIt showed the back of a man sitting at a desk. At his right hand, on the desk, was a pile of bills. As the camera moved closer we could see, in front of him, a stamp and a stamp pad. The action showed him picking up the stamp, inking it on the pad and stamping the back of his hand. Again the camera moved closer. Now we could read what had been stamped on his hand. "PAID IN FULL." it read. The point being, as you probably already realize, "PAY YOURSELF FIRST." The man was paying himself before paying any one or anything else becasue "PROFIT" is the name of the game. Right?

This is why the first figure calculated for the budget is the bottom line profit. This then becomes the primary goal of the managers of your business.

In subsequent articles we will talk about the remainder of the budget. How it is developed and the thinking and planning that goes into it's completion.

FROM ROGER'S DESK!

return to Volume 34, No. 1 index
return to the UHCA home page
telnet to uhca.com
WWW page creation by UHCA Webmaster