The 20% rule of costs and returns
A friend called the other day to pick our brains. He wants to start a small weekly newspaper in his community and wanted to know what we did in starting ours.
Here’s the Cliff Notes version.
1. Create a business plan. Recruit your tax accountant to help you crunch the cost and revenue numbers.
2. Project what your costs will be as accurately as possible. That will take several days to research and talk with potential vendors, asking for discounts and deals.
3. Project where your revenue will come from, who your ideal customers will be and how much they will invest with you.
4. List your top 20 ideal customers and go see them. Share with them your plans in confidence. Ask them to talk you out of doing it. That will tell you right away if they are truly a prospect.
5. Shave 10% off your revenue projections just in case you don’t make them. Add 10% to your cost projections to cover the unexpected. From that 20% swing, figure how long it will take to become profitable.
Do you have enough cash? If not, where can you get what you need? Will your bank give you a loan? Interest rates are low but lenders want to see a good business plan.
We share such ideas in “Maverick Entrepreneurs’ Million Dollar Strategies.”
For a $20 personally autographed copy, contact us at 803-359-7633.
Copyright 2019, The Bellune Co., Inc.