Sticking To A Business Plan
Sticking to plan!!
At the start of a New Year it is natural to have hopes and ideas for the year that lies ahead. That may involve the start of a new venture or to make changes.
It’s a simple fact if you need any financial support either as a start up or to expand an established business you will need to present the lender with a business plan and cashflow forecast.
This is generally met with groans because for some reason most people see this as a chore but know it’s a mean to an end so they comply, present to the bank with their application and then swiftly proceed to bury the plan in the bottom of a drawer.
Why? The plan should then become a working tool and blueprint for the next stage of your business and I suggest regardless of whether you require any finance a business plan should be drawn up anyway.
A business plan, in order to help you clarify your business objectives should ideally include:
- A business description and mission statement
- Management and people profiles to show your own strengths and of those you will be working with
- Financial forecasts – this will include projections of income, expected costs and potential profit together with cashflow forecast to highlight funding requirements
- Sales and marketing objectives including in depth market research and how you will bring your product or service to it
- An executive summary which is a concise overview of the essential points
- A regular review of where you are, and where you thought you would be, will either provide great comfort that you are on the right track or, more importantly, warn you if you are straying off course.
Key things to ask yourself when making comparisons to the original plan are:
- Why is it different?
- Can I control it?
- Do I need to reassess my business proposition?
- Was the plan not realistic? Do I need to prepare another?
- If the results are better than expected what specific elements have led to the additional success?
If the thought of preparing a business plan fills you with dread then seek assistance from your accountant. Their involvement will add value to the process as their experience may highlight additional opportunities or threats that you had not considered.
Most of the banks provide templates that could be used. This ensures you present the information to them in the way they wish to see it and with the right content. Alternatively there are loads of free templates on line.