Business Planning

Business Plan

If you intend to start a business it is very important you put together a detailed business plan.

Your business plan will help you focus on your idea and get a better understanding of whether you are actually ready to proceed with launching the company. Taking plenty of time to complete a comprehensive business plan before you start your business will help to reduce the risk of you missing something important. A plan will also be required by your funding partners and bank before they consider offering you credit, loans or overdraft facilities.

To help you prepare the plan, we can provide you with a template, which outlines the key points and will give you and others a clear picture of your business idea and where your business is heading. Completing the plan will help you think methodically and sharpen your ideas about your business concept.

The plan will also enable a third-party to easily understand and grasp your business idea without wading through the detail.

Budgeting

No business can ever know exactly what the future holds – just look at the last couple of years and the global economic downturn, which took a lot of businesses completely by surprise.

Careful financial budgeting can help to reduce the level of uncertainty, helping you anticipate and cope with problems, learn from the past and improve your ability to control the business.

When drawing up the company budgets, take into consideration the following:

1. Involve employees who will be directly responsible for the budget or who have information which will help you prepare accurate forecasts.
   
   
2. Collect as much historical data as possible on sales and costs.
   
   
3. Consider your sales plans, how resources will be utilised and any changes in the competitive environment.
   
   
4. Prepare an accurate sales forecast, taking into account any seasonal.
   
   
5. Use historical data, and any changes in operations or prices, to budget for overheads and other fixed costs and semi fixed costs.
   
   
6. Establish the relationship between sales and variable cost of sales - use your sales forecast to project variable costs.
7. Identify any non-operational cashflow, such as taxes and changes in financing.
8. Use your experience of debtor payment patterns to forecast the timing of all income and expenditure items and be honest with yourself.
   
   
9. Bring together the figures, in a cashflow budget.
   
   
10. Prepare any other budgets you will find useful, such as those for profit and loss, and the balance sheet.
    
    
11. Ensure your budgets contain sufficient information to let you monitor the key performance indicators of the business and manage these effectively.
    
    
12. Identify any significant areas of uncertainty, and if necessary prepare separate budgets for different scenarios. Do not be over optimistic – aim to be as realistic as possible.
    
    
13. Agree the budget with the individuals who will be responsible, and be prepared to amend it if your assumptions are unrealistic.
    
    
14. Regularly update budgets as actual figures become available and circumstances change.

SWOT analysis

A SWOT analysis can be an extremely powerful business tool and helps you to clearly identify your strengths and weaknesses, and the opportunities and threats your business will face.

By focusing on the key factors affecting your business, now and in the future, a SWOT analysis provides a clear basis for examining your business performance and prospects.