Simple Guide to Business Planning

Feb 17, 2021 by Roger Scherping

At ProjectionSmart, we are all about planning. Remember that old adage: Failing to plan is planning to fail!


If you’re an entrepreneur, planning means determining whether your new business concept makes financial sense. You need to have solid answers to questions like whether your idea can make a profit, whether your new business will pay you what you need to earn, and whether it will turn cash flow positive quickly enough. 

That’s why we created our Startup financial model. Startup will help you quickly and easily do a 24-month financial model of your new business concept. Startup is for everyone – you don’t need a finance or accounting background. We’ve simplified everything so that all you need to do is answer a few questions about your business. We’ve taken care of the number crunching. You just review the results in simple-to-understand graphs and reports and make changes until you have a clear financial picture of your concept.

At ProjectionSmart, we say do your Finances First TM! You should understand whether your new business concept makes financial sense before you take any other steps. This gives you a chance to swap it for a different idea if the first one isn’t going to work for you financially. Wouldn’t you want to know that your great idea won’t make any money before you launch?

Entrepreneurs also need to do a complete business plan. Yes, I know how you feel about writing a business plan. Just the thought can be intimidating and off-putting. Once again, we’ve got the solution for you. Our Proof Plan is the simplest way to write a business plan. We focus on the three key areas that investors care about: How do you make money? How do you get new customers? And, Who is on your team? Our small set of questions is focused on helping you prove that your new business will succeed.

Small Business Owners

Most people understand what planning means for an entrepreneur. But here’s another tip. A business plan shouldn’t be something you do once and then put on the shelf and forget about. In fact, your business plan should be a living document. Once you launch your business, you should continuously review your business plan and make changes to it. Your business plan should continue to guide your activities long after you launch your business.

So what does business planning really mean to an existing business? Out of simple necessity, small business owners tend to be focused solely on the day-to-day. I always say that all they can focus on is getting all of their orders out by Friday. There’s no time for anything else. And when the next week starts, they begin the same cycle over again.

It’s difficult for small business owners to find time to do any business planning. We argue that you need to make the time! Monthly business planning will keep your business on track to achieve your goals. Otherwise your business is like a car stuck on autopilot when a course correction is necessary!

I’m sure that you review your historical financial statements each month so that you understand where you’ve been. But we believe that your monthly business planning process should also include looking forward to see where you’re going.

That’s why we created our Growth financial tool. We wanted to create a simple way for small businesses owners to do a 12-month financial projection. We know that you don’t have a background in finance or accounting, so we created a tool that is perfect for you. In less than an hour, you’ll see your financial future. Your projection will alert you to problems that lie ahead and give you plenty of time to take action to fix them before they become a reality.

They say that the first step in achieving your desired future is envisioning it. That’s what Growth helps you do. We have Growth customers who log in faithfully early every month to update their 12-month forecast. They enjoy the peace of mind that comes from understanding where their business is going.

The RAAP Sheet

We have another tool for small business owners to improve their monthly planning. Bob Voss invented it, and he calls it the RAAP Sheet. Here’s a link to download it.

The acronym stands for Review – Answer – Analyze – Project. Bob created the RAAP Sheet with the idea that you to take a break from your busy schedule once a month, find a quiet place, and carefully analyze your business. You’ll start by analyzing your recent performance, and then you’ll take what you learned and create an action plan for the next 30 days.

The first step of the RAAP Sheet is Review. What were your sales last month? How many customers do you have? How many prospects? Answering those questions will give you solid data on where you are at and ensure that you are acting on facts, not feelings.

The second step is Answer. Answer seven questions about your business performance and your marketplace during the previous month. Each question is focused on a key aspect of your business. What did you learn about your current pricing? About competitors? How is your marketing working? Objective answers will tell you where you are doing well and where you are not.

The first two sections – Review and Answer – are basically fact gathering. Now it’s time to take those facts and apply them to your plans for the next 30 days.

The third step is Analyze. Here you analyze what happened in the prior month. What went well, and what didn’t? What have you learned in the last 30 days that you should apply going forward? You might come up with simple course corrections, like tweaks to a product offering. On the other hand, you might have had a new competitor enter your market or lost a major customer. Big events like these will likely require significant changes in your business.

Take Action !

The fourth step is Project. This is where you use your knowledge of your company, your industry, and your market to figure out your next steps. Based on what you learned in the first three steps, you may need to change your vision of your future, perhaps significantly. Step four is where you figure out your plan.

Step four consists of five questions:

#1. Sales Goal. If you’ve already updated your projection in Growth, then you already know what your sales goal is for next month. Record it here, and explain where the revenue will come from.

#2. Customers. Record where the new customers you need to reach your sale goal will come from.

#3. Prospects. To get the required number of new customers, how many new prospects will you need? Record the number and how you will obtain them.

#4. Expenses. What major expenditures do you need to plan for in the next month? You need to stay on top of your cash flow!

#5. Profit. Growth will tell you what your planned profit is for the next month, and your projection will also include the amount that you intend to pay yourself.

Step four of the RAAP Sheet is all about creating an action plan for the next 30 days. Now it’s time to execute! This is where the rubber hits the road for your planning. You’ve experienced, you’ve learned, and now you’re taking action! This is why Bob likes to say:

                    “Business planning isn’t something that you do once. It’s something that you do once a month!”

At ProjectionSmart, we are all about planning. We have the tools you need to do effective business planning every month. Remember that ProjectionSmart was created for the person without a finance or accounting background. We make it easy to see your financial future.