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40 March 2014 | beautystorebusiness.com business successful?; And how can I increase word-of-mouth advertising? You may decide that your current mar- keting strategy is exactly as you want it. But it certainly won't hurt to go through the process of questioning your current marketing plan to ensure that you are reaching your customers in the most productive way possible. VI. Operations For a beauty retailer, this is generally not a complicated section of the plan, but it is still important. Here you will want to address such areas as supplier relation- ships, methods you undertake to meet increased demand for certain items and the procedures you follow to keep the doors open on a day-to-day basis. VII. Milestones This is one of the real key areas of the plan because here you do your short- and long-term planning. The idea is to estab- lish near-term and long-term measures of success that you can come back to at a later date and assess your perfor- mance. If you are using the business plan to obtain outside capital, this area will be scrutinized closely to ascertain the attainability of your goals. If you are using the plan for internal strategization, this section will enable you to focus on the objectives that you want to accomplish as you go forward in making your shop suc- cessful. Some milestones include sales goals, opening additional stores, adding employees, measures to cut expenses and bottom-line profit objectives. VIII. Funds Required to Operate the Business Of course, if the purpose of your plan is to obtain outside funding, this section will be closely scrutinized by the pro- spective investor or lender. You will need to review the amount of money you and other stockholders (if applicable) have invested, the current levels owed banks, vendors and other creditors and other funds that you have used to run the business. Additionally, you will want to focus on projected future funding needs whether or not you are preparing the plan for an immediate capital request. One of the most difficult aspects of running any business is anticipating future funding needs, but it is also one of the most critical areas. For instance, if you know of a large upcoming order of hairstying equipment that you plan to enter in a month, you will either need to set aside funds to pay for the product or seek temporary outside financing. If you are seeking outside funding with the aid of the business plan, there are a couple of extra items to include in this section. Potential investors will expect to be informed of the anticipated use of the funds, their proposed percentage of ownership and a projected return on the investment. A lender will look for an explanation of why you need the money; specifically what the funds will be used for; the proposed terms of repayment; collateral to be offered for the loan; and the source of repayment for the loan. The antici- pated source of repayment for the loan is particularly important. Banks won't lend money unless they are confident that it will be repaid. And whether you seek investor funding or bank financing, including a complete funding proposal with the plan will demonstrate to the investor or lender that you understand not just that you need outside funding, but also why the funds are needed to make your business more profitable. IX. Financial Information and Projections No business plan is complete without a financial information section. Even if you are not a numbers person, it's imperative that you include your historical financial performance and projections of future performance in your plan. In a nutshell, this will tell you where you have been and where you are heading. Analyzing your past performance can give you insight into what you have done right to make your business work, as well as what you can do better to make it even more successful. For instance, a close look at your historical financial statements may reveal a disproportion- ate upward trend in a certain expense area (or areas) such as personnel. A close analysis may reveal that you are not doing a good job of monitoring over- time. A couple of minor adjustments in this area—such as restructuring employees' work schedules so that there are fewer on hand during off hours and more employees working during peak T h e I m p o r t a n c e O f A P l a n . i n d d 4 0 The Importance Of A Plan.indd 40 2 / 3 / 1 4 2 : 5 2 P M 2/3/14 2:52 PM