QUICK-LAUNCH BUSINESS PLAN
AUDIO TRANSCRIPTION
SEGMENT 1G

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	We're going to talk about sales forecasting now.  You'll see 
that in the handouts that accompany this program, there's a preliminary 
budget and sales forecasting spreadsheets.  All of that stuff is fairly 
easy to interpret, so I don't need to spend a lot on that.  You'll also 
see that there's a 12-month sales forecast for Anna's business.  It's a 
basic template which basically says, "This is how many of each product 
she's going to sell per month at what price.  These are the costs.  
This is how much money this is going to generate."

	If you are counseling somebody through their business plan or if 
you're writing your own business plan, sit down and think about how 
many of these things. If I'm making something or fixing 
cars, how many cars can I reasonably fix in a day?  What's 
my average?  Is it an hour?

	If I'm specializing in tune-ups, then it's sort of easy to 
predict that it takes about an hour to tune up a car.  If I'm fixing 
cars, it might take one hour to four hours or even all day.  I need to 
think through the process. Do I narrow my niche a little bit?
Do I say I'm only doing tune-ups and oil changes, or am I doing 
exhaust systems or brakes?  Am I changing cam shafts? Am I doing valve jobs?  
Am I completely tearing down engines?

	All of those things are important. Then pick some averages.  Say 
I've got to pull and fix a transmission one car a day on 
average, which will leave me three hours every day to do tune-ups. 
I can see four customers a day.
  
	I know that a transmission job on average brings in $400 and I
know that a tune-up brings in $100.  Can I afford that?

	Next I need to figure out this sales forecast so that I can 
figure out what bills associated with that.  If I've got to buy X 
number of transmission jacks and I need to have $1,000 in tools to do 
the tune-ups, an engine analyzer which is $1500, and I've got to pay my 
monthly payments on all of that equipment, which is $300, then how many 
cars do I need to fix a day?  This is why you do a sales forecast.  
  
	They are not difficult to do. They are simple addition, 
subtraction, and multiplication.  You need to figure this out
when you start a business.  Let's say you don't hit your sales goal
for the day. You know tomorrow you've got to sell more than you had to 
sell the day before. 

	So you've got to start working on strategies right away. 
It's a nice benchmark that tells us where we are in our process.  This 
is very, very important, and it is easy to do.
  
	Again, everything in business costs something.  while are 
selling something, it's also costing us to sell that.  It costs us for 
the raw materials, marketing, and the tools that helped us produce the 
product.

	Here is the raw data that shows how much I can legitimately do in 
a day.  If I'm mowing lawns, I can only physically mow so many lawns in 
a day.  How many can I do? Is that enough?  Does this justify the amount 
of money that I'm putting in this business?  Is it ever going to generate 
a wage for me? Or, if I can only mow one lawn a day, can I charge enough to 
cover the cost of my equipment and make a living?
  
	Be reasonable and explain the projections briefly in the plan.  
It's a plan, no one expects you to be able to prove this.  What you're 
doing is working towards justification, not proof.

	Take seasonal and personal fluctuations into account.  A lot of 
times we're starting a seasonal business that eventually grows into 
something greater.  One of the reasons why I've been using the lawn 
mowing business is that it's very much a seasonal business.  We 
shouldn't overlook seasonal businesses. Those are important.  They teach 
people about running a business.  Some seasonal businesses even make 
enough money so that you can kind of coast a little bit in the winter.
 
	It also gets us thinking about, what are complimentary 
businesses such as snow removal and fall cleanup. Something else 
that uses similar kinds of equipment.  Somebody that I was talking to 
yesterday about a power scrubbing business said they have a power 
washer and are cleaning cars with it.  What happens in the 
winter when people aren't cleaning their cars as often?
 
	Maybe that's a good time to be power cleaning boats, right?  This 
is a coastal community, and people have their boats out of the water.  
It would be a great time to bring a boat by or go by with your portable 
power steamer and steam those boats clean, so they are ready for the 
Spring when they go back into the ocean.
  
	Again, think through the process, think about your sales and how 
you're going to do that.  Once you're done with that, use the template 
or another sales forecast that you've got off the web site.  We'll come 
back and we'll talk about budget development a little bit.  

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