Why All Companies, Public and Private, Should Write Annual Reports

An annual report isn’t just for shareholders.  Writing an annual report forces you to look deeply into the activities of the past year and see what worked and what didn’t. Those insights are vital to planning your next 12 months.

An annual report also creates a history of your decisions and their outcomes that can be used for future planning and dealing with unexpected problems. Being able to find an answer to a current problem by looking back through your annual reports for that similar situation you remember from eight years ago is a big time-saver and can help you dig into other records that you used to create that annual report.

This article gives you an idea of how to write a good annual report:

Simplified Structure of an Annual Report

An annual report is necessary if your company is a corporation with shareholders or limited liability company with members. Even if you have a sole proprietorship or a one-person corporation, writing an annual report can be a beneficial exercise. If you apply for a loan or hire professional services, you may be asked for a copy of your annual report. A simple document of a few pages in length is adequate.  MORE

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How to Write a Vision and Scope Document

You should be doing this whether you are just starting to plan your new business, working on your plans for the new year, or preparing a presentation for funding.

Sitting down to write a vision document and a scope document helps you see holes and inconsistencies in your business activities and can give you a great new idea …

http://smallbusiness.chron.com/write-vision-scope-document-73586.html

Vision and scope documents define what your customer or company has in mind as well as describe the work process necessary to reach that vision. For example, entrepreneurs benefit from writing a vision and scope document to define their business ideas and list how to develop them into reality. Project managers use such a document to identify the expected result of the project and to set forth the methods and activities necessary to achieve that result.

What’s in a Name? – Re-inventing a business

I have always felt that the name of a company should tell the viewer what the company does. That is why I chose Confidential Business Coaching as my new company name. I am still keeping aBusinessPlan.com active because it is so well-known, but it is more indicative of project work. My analysis of the services my clients have accessed and appreciated most during the past few years indicates a greater need for focused work sessions involving specific questions, brainstorming and problem solving. 

Value Identification

I spent a lot of time thinking about what my clients have valued in my services over the years, and what I feel is the true value behind my services. What came to mind was my extensive knowledge of economics, capital markets, business models, strategic thinking, contacts, and my direct and truthful approach. In short, they trust me to do everything I can to keep them safe and give them the advice they need to be successful.

Service Description

The word coach was not a favorite of mine. I didn’t think it sounded professional, but it has evolved in meaning over the years and is now as accepted and descriptive as other words such as attorney and accountant. In fact, it describes something both those words have evolved to mean: advisory sessions. I even tell my clients that I am like an attorney but I advise on business, not law. This pretty much describes what I do – entrepreneurs come to me to ask questions, present problems to solve, and brainstorm in sessions normally lasting one or two hours.  Not only that, the mainstream understands the word coaching as an occasional or regular session with a knowledgeable adviser. Bingo!

So the name of the business must include the word coach or coaching.

Defining the Service

As a coach, I am clearly offering advisory services on a focused session basis. Consulting evokes the image of project work, which seems to be less important to today’s entrepreneurs and business executives. The next task is to define what kind of coaching I offer. That’s easy. I offer business coaching … but that is a broad and overused term.

I thought about what has always been the differentiating professional element over my own business career. That’s easy: I have been a fiduciary for 35 years. TheFreeDictionary.com defines fiduciary this way: An individual in whom another has placed the utmost trust and confidence to manage and protect property or money. The relationship wherein one person has an obligation to act for another’s benefit.

Yep. That’s me.

People come to me with ideas they want kept away from those who might copy them, and problems they want kept secret. They want reliable advice customized to their needs, and they usually don’t have an objective person to consult confidentially. Relatives and friends tend to say only pleasant and supportive things. Business partners and employees are too close to the enterprise to be truly objective. Worse, all these choices might talk about things that shouldn’t be talked about.

I feel the most important characteristic of a business coach is confidentiality.

Branding

Confidential Business Coaching also presents a professional brand image, in keeping with how I want my business image to be conveyed. Yes, it sounds serious. Yes, it advertises fiduciary care. Yes, it is how I want my services to be perceived.

A business name that has attracted my attention, and has remained unforgettable, is Where the Fuck Should I Go to Eat –  I love the audacity and the fact that it presents a clear definition of what the website provides. I decided not to apply such audacity to my own business name – this time.  Hmmmm …

 

 

How will you get funding if you can’t get into consideration?

I am always looking for good venture presentation ideas. The other day an email from Harvard Business Review caught my eye. It was for a book titled How to Write a Great Business Plan, which looks like a pretty reasonable book. What really got me thinking, though, were the wise words in the blurb:

Judging by all the hoopla surrounding business plans, you’d think the only things standing between would-be entrepreneurs and spectacular success are glossy five-color charts, bundles of meticulous-looking spreadsheets, and decades of month-by-month financial projections. Yet nothing could be further from the truth. In fact, often the more elaborately crafted a business plan, the more likely the venture is to flop. Why? Most plans waste too much ink on numbers and devote too little to information that really matters to investors. The result? Investors discount them.

If you read nothing else about business plans, read the above paragraph again. It is loaded with truth – particularly the last three words.

Business Plan Don’ts

  • Don’t make your business plan look like a magazine or a promotional brochure for a resort. Too many graphics and pretty pictures detract from the desired image of serious business savvy and conservative financial management. Include graphs that illustrate important facts and, if you include pictures, they should be of your invention, facilities, equipment or founders.
  • Don’t put your business plan on a PowerPoint. A business plan should be a Word doc or Mac equivalent that can be opened on a PC. Convert it to a .pdf file so it looks good and doesn’t get corrupted through email. Many investors won’t open a huge PPT file and others just don’t want to look at a PPT or are concerned about what tracking devices it might contain. A PowerPoint is a presentation tool that is used to highlight important points of a verbal presentation a la the theory that people better retain information that they both see and hear. It is not a business plan tool.
  • Don’t attempt to entertain your target audience. They don’t want to be entertained. They want to make profits from investing in businesses.
  • Don’t show financial projections into the billion$ or hundreds of million$ during your first three years – even if your figures delude you into thinking it is possible to reach those kinds of revenues. Nobody will believe you even if your figures are correct, and you will come off looking sadly naive.
  • Don’t omit a detailed description of your production sequence, launch plans, marketing plans, and build-out plans. This is what investors want to see and many of the business plans that come across my desk are lacking in these details.

 

What you should know about venture investors …

After 40 years of working in the investment business – in some cases, side by side with the kinds of people you want to fund your company – I really know them well. I am one of them, myself.

In general, I find that entrepreneurs are not even remotely ready for the kind of decision making process used by venture investors. Even entrepreneurs who have run their own companies, though at a greater advantage than those who haven’t, for the most part don’t apply what they know about running a business to the process of seeking funding. For some reason, they don’t understand that every venture investor is actually an entrepreneur running his own business and looks at potential investments in the same way any business owner looks at a capital expenditure.

Venture investors have backgrounds in accounting, law, business management for a major corporation, investment banking, or they have started and operated a company themselves. It doesn’t matter whether they are part of a venture capital firm or an angel investor. They are all very similar in what they look for.

Management. – Every venture investor wants to see a serious, emotionally mature, committed, knowledgeable, business-savvy startup founder. They also want to see the same qualities in the partners and key employees. No matter how friendly and casual they seem when you first meet, they are judging your character and potential. If you are anything less than impressive, you have just lost your chance. Also, they are judging whether you are teachable. Arrogance and defensiveness are very bad signs to a potential investor.

Business Model. – Of course they want to know what your company does. They may use terms such as “What is the pain?” when they want to know the details of the problem or need you have identified as an opportunity. In fact, they will ask you all kinds of questions trying to find out the logic behind your idea. If you have any creative assumptions or personal opinions, you have just lost your chance.

Marketing Model. – Every business owner knows that a company that can’t get customers is worthless. Again, assumptions and opinions will lose out. Investors want a detailed and logical explanation of why someone would buy, at what price point, when, where the point of sale will take place and how you will put all this together.

Build-Out. – Venture investors like schedules and benchmarks, but they will consider how realistic your goals are based on their own experience in business. Promising a fast build-out and early revenues might just make your plans sound unrealistic.

Contingency Plan. – Face it. The best business plans are really only fiction until the business is up and running successfully. Every entrepreneur miscalculates, misjudges and is guilty of wishful thinking. The real world does not bother to arrange itself to suit your delusions, so things happen. An investor will be most impressed if you recognize this and have several alternative ideas – not how you will start a coffee company if the software idea turns out to be a bad idea – but how you will alter the target customer, or the scope of the software, or the product roll-out. Showing that you can manage the risk of a startup will earn you a lot of respect.