QuickBooks Tips >
Setup and Customization Tips > Tune Up Your Business Plan with QuickBooks
Tune Up Your Business Plan with QuickBooks
Do
you have a business plan? If you don't, even if you're a
sole proprietor, you should.
Business
plans can be a good barometer for the health of your finances as a
way to gauge whether or not you're on the right path. If you
don't have a business path (or if yours is less than organized
or polished), you can use QuickBooks' tools to create or
fine-tune one. We'll show you how to use these tools to get the
job done quickly and easily.
The Game Plan
To
get started, select Company >
Planning & Budgeting > Use Business Plan Tool and
you'll see what's displayed in Figure
1. QuickBooks' business plan
tool uses a convention that other Intuit products use frequently: a
lengthy wizard that walks you through the entire process. This tool
supplies information and asks questions about what's needed on
each screen. You fill in the answers (or select from options) and the
business plan wizard works in the background to place the data in the
correct place.
The
first topic you'll be asked about is your company. If you're
a new business, you'll have to estimate in some areas, like the
percentage of your sales that will come through credit. In other
cases, you'll be better able to answer in concrete terms. For
example, what will your customer payment terms be? When do you want
your business plan and financial projection to start?
Figure
1: QuickBooks walks you through
the process of creating a business plan with an easy-to-use
interface.
What's Coming In?
Your
income is up next, and this will take some figure-pulling (and maybe
some hair-pulling). You can either fill in a spreadsheet manually,
adding up to 20 categories, or use the Income Projection Wizard, as
pictured in Figure 2.
If you've already been working with your data in QuickBooks,
the latter is certainly recommended. These numbers will be
scrutinized very carefully, perhaps put under the microscope more
than any other element of your business plan. Make sure you can back
them up.
Figure
2: The QuickBooks Income
Projection Wizard.
If
you're projecting manually, be prepared to calculate the Cost
of Goods Sold (COGS). This number contains three pieces:
Material:
What percentage of each dollar pays for the cost of product(s)? If
you're a service company, enter the associated materials
costs.
Labor:
What percentage of each dollar is tied to the employee costs
associated with goods production?
Other:
What percentage of each dollar goes into other costs?
Business Expenses and More
You
have the same two choices when you're entering your expenses.
You can enter them manually or use the Expenses Projection Wizard. If
you do the latter, your projections can be based on either the last
12 months of history or an average from the last 12 months.
In
the Interview section, you'll need to have numbers available,
including:
Beginning
account balances
Assets
you own or need to buy
Cash
available to invest (if applicable)
Amortization
and depreciation
As
in other areas of the business planning tool, existing data in
QuickBooks will be automatically filled, such in Figure
3.
You'll
also answer questions here about inventory (i.e., fixed or variable,
minimum balance), vendor financing, lines of credit, and your total
credit limit.
Figure
3: The business planning tool
pulls in existing data from QuickBooks.
Writing Your Plan
Now
it's time to write, but don't panic thinking you'll
face a blank screen. The Plan section is divided into three sections,
and you can toggle between them. You can view the actual plan outline
tree, which is a window that provides tips and examples, as well as a
text entry window, as shown in Figure
4.
Though
this is primarily a text-based section including information about
things like your company background, products and services, and the
competition, you'll supply some numbers, too, and the rationale
for arriving at them.
Figure
4: The Plan section is divided
into three main sections.
Once
you've completed all of the sections, you simply preview and
print your plan. QuickBooks assembles it with all of the text,
tables, graphs, and charts in the right place, and presents you with
a professional business plan that you can take to the bank, or simply
revisit from time to time to make sure you're on course.
Previous Tip - Back to tips - Next Tip
