Starting
up in business
The
Business Plan
Every
new business should have a business plan. It is the key to
success. If you need finance, no bank manager will lend money
without a considered plan. It is one of the most important
aspects of starting a new business. Your plan should provide
a thorough examination of the way in which the business will
commence and develop. It should describe the business, product
or service, market, mode of operation, capital requirements
and projected financial results.
Why
Does a Business Need a Plan?
Preparing
a business plan will help you to set clear objectives for
your business and clarify your thinking. It will also help
to set targets for future performance and monitor finances
and profitability. It should help to provide early warning
for when you might need to reconsider the plan.
Always bear in mind that anyone reading the plan will need
to understand the essentials of your business quickly and
easily.
Contents
The
business plan should cover the following areas.
- Overview.
An overview of your plans for the business and how you propose
to put them into action. This is the section most likely
to be read by people unfamiliar with your business so try
to avoid technical jargon.
- Description.
A description of the business, your objectives for it and
how you plan to achieve them. Include details of the background
to your business for example how long you have been developing
the business idea and the work you have carried out to date.
- Personnel.
Details of the key personnel including you and any external
consultants. You should highlight the skills
- Product.
Details of your product or service and your Unique Selling
Point. This is exactly what its name suggests, something
that the competition does not offer. You should also outline
your pricing policy.
- Marketing.
Details of your target markets and your marketing plan.
This may form the basis for a separate, more detailed, plan.
You should also include an overview of your competitors
and your likely market share together with details of the
potential for growth. This is usually a very important part
of the plan as it gives a good indication of the likely
chance of success.
- Practices.
You will need to include information on your proposed operating
practices and production methods as well as premises and
equipment requirements.
- Financial
forecasts. The plan should cover your projected financial
performance and the assumptions made in your projections.
This part of the plan converts what you have already said
about the business into numbers. It will include a cash
flow forecast which shows how much money you expect to flow
in and out of the business as well as profit and loss predictions
and a balance sheet. Detailed financial forecasts will normally
be included as an appendix to the plan. As financial advisers
we are particularly well placed to help with this part of
the plan.
- Financial
requirements. The cash flow forecast referred to above
will show how much finance your business needs. The plan
should state how much finance you want and in what form.
You should also say what the finance will be used for and
show that you will have the resources to make the necessary
repayments. You may also give details of any security you
can offer.
The
Future
Putting
together a business plan is often seen as a one-off exercise
undertaken when a new business is starting up.
However the plan should be updated on a regular basis. It
can then be used as a tool against which performance can be
monitored and measured as part of the corporate planning process.
There is much merit in this as used properly it keeps the
business focused on objectives and inspires a discipline to
achieve them.
How
We We Can Help
We
can look forward with you to help you put together your best
possible plan for the future.
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For information of users: This material is published
for the information of clients. It provides only an overview
of the regulations in force at the date of publication, and
no action should be taken without consulting the detailed
legislation or seeking professional advice. Therefore no responsibility
for loss occasioned by any person acting or refraining from
action as a result of the material can be accepted by the
authors or the firm.
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