Writing a Successful UK Business Plan
Introduction
Most people think of a business plan solely as something they have to do to impress others like the bank or a potential investor but it means a lot more than that.
It is also the document that sums up all of those ideas which persuaded you to set up in business in the first place. This alone makes it an important document for you as well as for the others. Your first business plan is the equivalent of chapter one your personal 'How to Succeed in Business' text book.
Everything matters in your business plan but when it comes to presenting it to the bank or potential investors the profits and cashflow forecasts are going to be the key components.
Until now the deterrent here has been the fact that building and subsequently revising accurate financial forecasts has been a time consuming and expensive business and time and money are your two most precious resources. Figurewizard however is designed to quickly and easily come up with all of the answers when it comes to the all important financial forecasts.
There are five elements to any business plan which will cover:
People
Products
Marketing
Operating Resources
Financial Forecasts
They are all important but if the Financial Forecasts fail to stack up, the first four will mean nothing, no matter how well thought out and plausible they are perceived to be.
People
You start this part of the plan with yourself. Outline the qualities you know you possess which will enable you to get your business running and keep it that way. Don't be shy.
As to those people you intend to recruit as things develop, make it absolutely clear what you will be looking for in terms of expertise and experience. The cost of staff, key staff in particular is a big overhead and you will be expected to show what that cost will be and that you can afford it.
You will impress nobody if you intend to start off with a large team, no matter how well qualified they are, until the business has demonstrated that its finances can cope, especially where cashflow is concerned.
Products
Products are whatever you will be selling; they can be goods or services. What this part of your business plan boils down to is that you should be able to show decisively why people would be expected to buy what you have to offer in preference to what is already available to them.
The key here is in explaining what the benefits of your products are versus those that are already established in the market. In order to know this you need to research that market and, if it’s the bank you are seeking to convince for example, to demonstrate the results of that research. In short you will be expected to show that you know as much about all of your would-be competitors’ products as you do about your own.
When presenting this information the principle of something known as ‘Occam’s Razor’ is the key. Occam’s razor is a principle that says in so many words; ‘The more conditions there are to an argument, the less likely it is to be true.’ Conditions usually start with the words; ‘if’ ‘provided that’ or ‘so long as;’ and such terms should never need to be used when talking to a bank manager or potential investor about your business plan. When it comes to price, presentation, quality and innovation your products should be capable of being viewed as obvious winners.
Price alone is an erratic benefit however: If your business strategy is simply to be 10% cheaper than anyone else your plan must also show how you will be able to respond, without losing money when someone comes back at you with 15% cheaper (as they surely will). This makes the other features of your products against those of the competition crucial to the integrity of your plan.
Marketing
Marketing is the sum of the tactics you intend to employ to generate a demand for your products. This part of your business plan will demonstrate how creative your approach to your business will be.
Depending on whether you are direct selling or distributing this will include such issues as direct representation, e-commerce, PR, advertising, in-store display modules, trade fairs, promotional offers, samples, packaging and presentation. You will find all of these costs grouped in your Figurewizard reports as ‘selling expenses’.
No matter how original and effective your plans are here though, they will come to nothing unless your products have already passed scrutiny and that the effectiveness of your ideas are both fully researched and costed.
Operating Resources
So far your business plan will have demonstrated that your products are excellent and your marketing is well thought out but you must also show that your physical resources for managing the business are going to be up to the job. These will be those parts of your business plan which refer to such matters as administration, financial controls, logistics and goods handling. Figurewizard reports these costs separately within the grouping ‘operating expenses’.
As with everything else the approach of your plan will be to show that you can undertake these tasks at the minimum of cost. Getting carried away with grandiose and expensive schemes based on untested assumptions of projected sales and margins will not go down well.
The part you intend to play in these and other functions will be closely scrutinised.
When it comes to both marketing and operating overheads, less will be perceived as more. You are the one who will be expected to take the strain until you know exactly what you need from other people and crucially what you can realistically afford. Starting off by delegating to expensive new staff before your venture has proved itself will simply eat into your capital. Your business plan will be far better received if it can demonstrate that you will initially be keeping such costs down.
Financial Forecasts
This is where the business plan comes to the crunch. Get this wrong and you might just as well have not bothered to write it in the first place. This is also however where Figurewizard comes in with the Interactive Chart planners being your top priority.
How Figurewizard works for you
Figurewizard is best described as ‘The supercharged version of the back of an envelope’. All you are asked to do at each stage to select a figure from a list that most closely approximates to your idea of costs or revenues.
At first the best approach when faced with the choice of one of two figures (say between £250 and £500) it is prudent to pick the higher figure for costs and the lower one for revenue. You will be able to amend these figures and therefore the reports whenever you choose, once our system has created them. You can create up to ten separate sets of reports, each one in minutes, all of which can be amended if you so wish.
Figurewizard automatically calculates your VAT and Corporation Tax as you enter your figures. It is vital for a properly costed business plan to have this, especially where accurate cashflow forecasts are concerned.
You have the option of selecting ‘Financing by Factoring / Invoice discounting’. If your business plan involves selling goods or services on credit this is well worth investigating.
Another feature is the option to select ‘Buying by Letter of Credit’. This is especially important if you intend to import goods, especially from the Far East and South Asia. Letters of Credit can have a major impact on your business plan where cashflow is concerned.
Interactive Chart Planners
The Interactive Chart Planners are the key elements to revising your plan. You should revisit them regularly as your business develops and check the effects on the forecasts of your original business plan, most especially on cashflow.
Like anyone else in business you will constantly have ideas about developing it. Until now though the most important 'What If?' questions have been out of reach without expensive and hugely time consuming efforts on the part of yourself and others.
What the Chart Planners do for you is to allow you to address that 'What If?' question to any of your reports and instantly learn all of the effects of your ideas on profits and cashflow in the most minute detail. All it takes to achieve a complete revision of your business plan to include the consequences of an idea is one click of a drop down box.
The two charts, one for Profitability and one for Liquidity respond as soon as you make the change. If they show that your amendments are pushing you into the red (especially in the case of Cashflow), then you need to think again.
You can if you wish also edit any part, or indeed all of your report by selecting the 'edit' button alongside the title of that report in 'My Account'.
The Reports
As you amend your figures on the Chart Planners all of the other reports are amended too. these are:
Profit & Loss accounts
Balance Sheets
Analysis of Overheads
Analysis of Assets and Liabilities
Statement of Assets’ Net Book Value and Depreciation
Statement of how your Corporation Tax has been calculated
Detailed month by month Cashflow and Liquidity Forecasts
Business Ratios – Performance
Business Ratios – Efficiency
Business Ratios – Solvency
Remember all of these are all automatically calculated and reported for you by our systems: Figurewizard does all of the work. They are all printable. All you have to do is to select your figures for Capital and Financing; Sales; Overheads and the purchase and sale of Fixed Assets to get every possible report needed to support your business plan. We do all of the work for you; online in an instant.
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