The right of Edward Blackwell to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988. The views expressed in this book are those of the author and are not necessarily the same as that of the author. that of Times Newspapers Ltd.
Clarity
Writing a business plan
Brevity
Logic
Truth
Designing the business plan
Deciding how much to write
Getting down to it
How to set about it
Tackling each section
Puff' phrases like 'This is the best tool grinder on the market and it will be the cheapest too' cut very little ice. Although your hopes and plans for financing your business will be set out in any cash flow projections and the like that you will attach as attachments, it will help if you give a brief summary of the important points now.
Simple cash flow forecasts
For first-timers, the prospect of preparing a cash flow forecast can be intimidating; but the banks will demand one when seeking a loan for even the smallest sole proprietorship. The cash flow forecast sets out, usually in monthly columns, the amounts you expect to receive by way of sales, business start-up allowance, etc., and compares this inflow of money with the payments you will make for inventory, materials, overheads, equipment, and the money you will have to take out of the business for living expenses.
Is a cash flow forecast of any real use?
Principles to observe when filling in a simple cash flow form
You will calculate in the same way for the second and third quarters, but the VAT of the fourth quarter will not be part of this cash flow forecast. Each bank has its own cash flow forecast form, and you will need to do the calculations according to the bank's method.
The break-even analysis
Your cash flow forecast is now ready to be put into your business plan and submitted to the bank. Why not just fill out the bank's cash flow form and explain everything else in an interview.
The very small business
Naturally, the manager is expected to focus on the highest paying customers: the larger ones. You don't have to write as much as you would if you were starting a larger concern such as the one described in the later chapters.
I'm sure with some extra energy I can increase this to at least £1,200 a month, which will involve less than 20 hours of actual work a week at work. My ambition is to get more work from builders and others who are themselves VAT registered, so that in the long term I will no longer rely on private clients.
He will not have to fill in the "money from debtors" line, nor will he pay any wages yet, so he can use this line for his drawings. Now, following the principles laid out in chapter 2, Alexander will have to fill in the blanks for some of the payments he will make.
Retail and catering
Furthermore, if he or she has lived in the area for more than a few months, the banker will likely know the location of the store in question and the pattern of trade. His decision was confirmed when he reflected that online his market would not be limited to those who could come to his shop or even to residents of the United Kingdom.
The company has taken an option on the first floor of the former Ourtown Co-operative Society emporium in Verges Street. Although this is a distance from the main shopping center, it is considered convenient for the purposes of the company. He will give all the help he can in setting up the new organization.
A brochure and a price list of the company's main lines and items have been designed and are being printed.
Catering
First the couple or four who are out to make an 'apartment' out of the meal. Furthermore, the design and furnishing of the place must be such that the feeling of apartment is preserved. A caterer's fixed costs are huge compared to the cost of the food and drink he or she provides and the daily variations'.
Osbert pointed out that the lunch business was somewhat different from that of the evening.
Manufacturing
We should be able to get at least 10 percent of the market as we are the first in this field with high quality designs and products. The need for working capital will be high in the first year, partly due to the limited capacity of the foundry. They have also agreed that their main goal in the first year will be to set up an efficient production system.
Note that, due to the heavy payments combined with the lack of invoices in the first month, Rosemary and Muriel will be able to claim a VAT refund for the first quarter.
Expanding a business
Make sure that the section or the business plan labeled 'strategy' or 'the longer term view' shows that your tactics and management are in harmony with the overall strategy. The company has considered the supply of diesel for the boats, but is not yet convinced of the profitability. The third example of the need for a thorough re-planning has the financial aspect only in the background.
McTaggart should be kicked out of office to do the job he was paid to do.
The market
That the size and availability of the market is of great importance to the young entrepreneur was emphasized in chapter 1. Indeed, their market was very large and suitable for the use of the Internet. The makers of left-handed snooker (Example 5.3, page 85) conducted a more elaborate market research program than any other program described in this book.
Indeed, if you're checking up on an individual you already know, you can try filling in some of the information before sending (making sure your facts are correct, such as the individual's name and address).
Planning the borrowing
What remained to be discussed, although important, was simply the willingness of the bank to lend, the form of the loan and the repayment rate. The lenders of unsecured money must cover their losses on the failures from the profits they make on the winners. According to this, the government itself acts as guarantor for the bank for the majority of the money that the bank lends, and the loan can be made without requiring personal security.
The person, company or bank that lends you money is entitled to interest and repayment of the money within the specified period.
How not to write a business plan – or run
There is no need to specify in detail who will send out statements, make the tea or ensure the hallways are clean; but the reader of the business plan must do so. The figures used were in no way derived from anything in the rest of the 'plan'. Now the business plan writers seemed to believe that a further capital injection was the only thing.
There was no indication in the plan that the company had a marketing policy or that the plan's writers anticipated the need for one.
Maintaining the plan
It is quite easy, if you make it a rigid rule that all financial transactions are recorded in the books on the day they occur. With his experience in this field and his record of success, he was able, through his friends, to find a job as a wine buyer for one of the firms operating in this business. Arguably one of your most valuable assets in business is your time.
Besides, he wasn't interested in books, and he doesn't like to talk about going overboard.
Small business and the trade cycle
So how can you ensure that your business will be one of the surviving majority. All money to purchase plant and machinery and goodwill must be paid in the middle of the trading cycle. You will need working capital and 'tools of the trade' (which can mean plant and machinery), but do you need to buy premises.
One of the dangers for the person running a small business is the preoccupation with day-to-day problems.
Monitoring progress
He managed to overcome his problems, and by the end of the next month would be able to increase production to five statues per month. Unfortunately, under the terms of the lease, Ourtown Electrical Supplies Ltd had to bear the entire cost. The accountants prepared a new profit forecast and cash flow to the end of the year, including the actual results for the first five months (Table 12.4).
They assumed the company would return to monthly sales targets by the end of the year.
Postscript
In the preceding pages I have described some of the necessary things a man or woman needs if he or she sets out to run his or her own business. There would not only be a managing director, but also, in the nearby offices, a finance director, someone in charge of production and so on. For the sole owner of a small business, however, there is no one in the next office.
Unfortunately, there is a dearth of former managing directors and successful sole proprietors in the pool of available advisors.
Your accountant
But it's likely that advice suitable for your position will be hard to come by. This is not to denigrate their ability to counsel, once a sound diagnosis has been made; but it is a fact that marketing experts tend to see problems as sales problems, bankers see them in financial terms, etc. The person running a small business, more often than not, needs help asking the right questions before going to an expert for answers.
Where to go for further advice
Such specialized expertise may not be qualified to detect the real underlying problems or to take a balanced view of the business (see Chapter 9). Also, make sure that the company you choose does not leave you in the hands of an inexperienced beginner.
Locally available advice
The chamber of commerce
Your trade association
Your local authority
Your customers
Your suppliers
Appendices
Banks
British Overseas Trade Board
Chambers of commerce
Help for small businesses
Cooperative development agencies
County courts
Customs and Excise VAT offices
Department of Employment
Department of Trade and Industry
Development agencies (for Scotland, Wales and Northern Ireland)
Enterprise agencies
Highlands and Islands Enterprise
Industrial training boards
HM Revenue & Customs Inspectors of Taxes
Jobcentres
Learning and skills councils
Local authorities
Mid-Wales Development Board
Newspaper Publishers Association
Patent Office
Royal Mail
Tourist boards
Useful names, addresses and
Department for Environment, Food and Rural Affairs Nobel House, 17 Smith Square. for free building permit booklets see next entry). Loan Guarantee Scheme Design Works Unit 15 William Street, Felling Gateshead NE10 0JP Tel www.shell-livewire.org.
More useful websites
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