Question

What does

• Momentum, Traction, Expertise: Your key numbers

mean in writing a business plan?

Answer 1

Well, a business plan is a depiction of inter play of various factors affecting the business.

Momentum: refers to the rate or velocity at which business is growing.

Please ask the following questions:

• How fast or slow it's moving or growing?
• Has the business become sluggish?
• Is the business growing for first couple of periods and then become stagnant? Or it's displaying a sustained growth or momentum.

Answer to these questions will help you understand, what does one mean when he is talking about momentum in writing the business plan.

Traction: Means the business continues to get the attention of the customers. This means your sales continue to grow, customer base continues to increase. Lack of traction will translate into decline in customer base, sales decreasing. Traction ensures your offerings still have the visibility. The market is still recognizing the bouquet of goods and / or services offered by you. The demand for the same continues to be robust.

Expertise: You must be jack of many trades but what do you specialize in? What are you best at? What is your area of strength? This is primarily to see a fitment between what you can do and what you are doing? Are you venturing into a space which is not your area of expertise? Will you be able to handle the hurdles there?

Key numbers: They are the operational and financial parameters pertaining to the business. These are indicators of teh performance of the business and health of the business.

Operational parameters can be:

• Daily visitors, First time visitors, active visitors on your website.
• Installed capacity versus annual production
• Throughput
• Efficiency
• Occupancy

Financial parameters can be:

• Market size
• Market growth rate
• Revenue and revenue growth rate
• Gross margin, operating margin, net profit margin
• Leverage

I sincerely hope i had been able to guide you and put your mind in action.