30 May Writing a Business Plan
A business plan helps you to do all the necessary research to take a business concept and lay out how it is likely to work out in practice. It will be particularly important in order to help attract finance for your business.
Financial projections are a particularly important part of the plan and a large amount of detail will need to go into them covering sales, margins, overheads, and break-even analysis.
An overview of the Business Plan
Potential lenders need to get an insight into your current operation and future plans. For this to happen the plan needs to be well in order and be presentable.
The amount of detail required will vary depending on the situation but the plan should cover the planning of the business using best estimates of future operations, the financing of the business and how it is to be funded, how the plan is to be implemented and the method of monitoring the progress of the business against the plan.
As well as being used by lenders a well thought out business plan is actually an excellent management tool allowing you to plan what is going to happen and deal with potential problems.
Contents of the Business Plan
The plan does not need to be too long, just enough to clearly give the relevant information that a lender may need. Every last detail is not necessary as you do not want to bore the reader and further information can be sought if necessary.
The introduction is important as this will determine the extent of interest the reader has in the rest of the plan. Many have been a decline by this point! It is also important, to sum up well in the end.
The following can come in handy as an outline for the arrangement of a business plan:
- Introduction: This should be a good overview of what business does; it’s establishment period, management team, competition, the marketplace, suppliers, financial projections and history, the investment required, and long term plan.
- Background: Background of the company and the key individuals.
- Management and Organisation: A management chart and staff plan, salary policy, and outside expertise to be used such as accountants and solicitors.
- Products or Services: What you sell.
- Operations: The production process, capacity, quality control, plant and machinery needs, the premises required, and future needs.
- Markets and Marketing: The marketing plan with who the customer base is, how you’ll reach them, and the competition.
- Financial Projections: Cashflow projections, profit forecasts, and break-even calculations. They should be consistent with the rest of the plan and make sense. Detailed monthly cash flow should be provided for the first 12 months and in some cases up to 5 years. Worst-case and best-case scenarios can be provided.
How We Can Help You
Our accountants in London can assist you in completing the business plan and advising on appropriate sources of finance.