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Old 08-12-2003, 06:55 PM
Jackd Jackd is offline
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Join Date: Jul 2003
Location: Montreal, Quebec
Posts: 508
As a business consultant, helping businesses to stay and grow in business and helping new businesses to start, I allow myself to give you a few hints.
Why do you want to start a business: To satisfy customers?? To show your competence and good work?? Because you like cars?? To fill a local need?? NO.**** TO MAKE MONEY. If you have any other reason but to generate profits, you must be either very rich to absorb the looses or simply a masochist.
First thing you need to do: Set up your profit objectives (be realistic). Then, from this number, work your way up/down a P&L.
How much sales you need to achieve, profit margin, and meet the expected (and unexpected) expenses, Be very pessimistic on sales and profits, and do not forget a single expense. (worst case scenario). You should make several passes with your P&L looking at different scenarios.
Then you ask yourself what is required in terms of capital investment to meet the profit objectives. (that's where the wood/leather come into play). How will you recruit your customers? What are your fixed expenses vs. variable expenses (which will give you the minimum sales/profit necessary to stay afloat). what is your fall back position (if sales/profits are not there and expenses are higher than anticipated)
Starting a business is a numbers game and should never be for the fulfillment of a dream (That OK if the numbers agree)
Most people starting new businesses spend a lot of time, efforts and thoughts on what they will do (wood-leather, loaners, appearance, service level etc.) and not enough time on sales planning, sales programs, profits generation, expenses control and all aspects of business management. You are not in business to repair cars. You must be in business to make profits. Fixing cars is the ''HOW'', as are employees, facility, tools and equipment.
I could write a book about ''the wrong way to plan for a new business'' and an other book reporting failures I have seen because of not focusing on the key elements (sales, margin, expenses) These elements must be the BASIC of any business plan.
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