Key Questions For Planning & Forecasting

Entrepreneurs attempting to prepare a detailed business plan and accurately forecast expenses are often faced with a daunting task. The search for “all the answers” can often lead to a mental paralysis that can bring the entire process to a screeching halt.  While no one certainly has all the answers, I thought having a few key questions in your arsenal might be helpful. Given that we are also kicking off a new year, it might be a good exercise to review some of these questions with your staff as well. 

Here are 25 questions to get you started:

1. What components are needed to produce my product or service?
2. Who manufactures or produces those components?
3. How much does each component cost?
4. Is special assembly required to produce my final product or service?
5. Can we do the assembly in-house or must we outsource the assembly?
6. How much would the assembly cost (time/materials) in house versus outsourced?
7. Once the final product is ready, is it delivered to a “middleman” before it reaches my client?
8. In answering the middleman question, let me first identify where my clients are located, are they regional, across the U.S, or in other countries?
9. If a middleman is required, how many such middlemen exist and where are they located?
10. What additional costs are added by the middleman?
11. Given any added cost of the middleman, what has it now cost me to produce and deliver the product?
12. If I now add a profit margin to all of my costs, what is my final selling price to the customer?
13. How does my final price compare to competing products that my customer can pick from?
14. If my price is lower than the competition, should it be?
15. If my price is higher than the competition, why will the customer be willing to pay more?
16. When the product finally reaches my customer, how does the customer pay for the product, or has the customer paid up front?
17. If the customer has not paid up front, how long does it take to receive payment from the customer?
18. How can we shorten the time it takes to receive payment?
19. How many customers per month do we anticipate?
20. Given the costs previously identified to produce each product, how much will it cost per month to service the anticipated number of customers?
21. If we’re waiting 30 days on average to receive payment from each customer, how much money are we typically waiting for each month?
22. If we are not reaching the desired number of anticipated customers, how do we better promote our business?
23. What will this promotion cost?
24. How might technology enhance any portion of my business from manufacturing all the way through the final sale?
25. Does incorporating some technology now give me a decided advantage over my competition?

Darrin is Chief Economic Inclusion Officer of JumpStart. He founded and ran his own strategic planning and management assistance firm and spent 16 years in the commercial banking and finance industry. Darrin has an MBA from Baldwin Wallace College and an undergraduate degree from Mount Union College. He has led a series of workshops and seminars on matters of economic development and diversity.