| ent"> | | | | equipment, information technology, suppliers, customers, |
| Running your own business can be very rewarding | | | | health and safety and stock control. Businesses that |
| however it is certainly challenging too. You’ll find | | | | have a unique product or service or a competitive |
| yourself working long hard hours and making difficult | | | | advantage are more likely to be successful in their |
| decisions day in day out, so it is definitely not an easy | | | | market. A breakdown of the strengths, weaknesses, |
| option. A heavy dose of realism and plenty of | | | | opportunities and threats to your business is also useful |
| research is a must before you take that first step and | | | | and is commonly called a SWOT Analysis. You will |
| approach your bank manager for finance. Writing your | | | | also need to provide a list of personal assets and |
| plan The importance of a good business plan can not | | | | liabilities, as well as income and expenditure. The plan |
| be overstated when you are starting up in business. | | | | should detail your stake in the business and the source |
| Although the initial objective of the document is to help | | | | of the contribution for example savings, redundancy, |
| you raise finance for the business, it will also help you | | | | re-mortgage, family loan or inheritance. The amount |
| understand what you wish to achieve from the | | | | you are looking to raise from the lender, repayment |
| business and is an essential document to review the | | | | term and available security should also been quoted. |
| performance against your projections and can alert | | | | Cashflow and profit forecasts are also vital elements |
| you to anything that is not going according to plan. The | | | | of the business plan. The ability to generate cash is |
| plan should demonstrate that you understand the | | | | critical to the success of any business. If the business |
| business opportunity and unsurprisingly, a bank will only | | | | cannot generate sufficient cash at the right time to |
| lend when it has a very good chance of being repaid. | | | | meet payments due then there will be potential |
| You may wish to seek professional advice in drafting | | | | problems. The profit and loss projection will show the |
| the plan although it is too important to be left to | | | | expected level of sales, the cost of these sales to the |
| someone else to write. Banks can supply a business | | | | business and the operating expenditure. |
| plan template to give you guidance as to what to | | | | Submit your plan for review A copy of the business |
| include in the document. Accountants and Business | | | | plan should be sent to the bank manager a few days |
| Link advisers can also provide valuable assistance in | | | | in advance of the scheduled meeting to give them the |
| producing a business plan. You must be able to | | | | opportunity to read the document before you meet. |
| confidently answer any questions raised by the bank | | | | Banks will generally expect a personal financial |
| manager about the business, your chosen market and | | | | commitment from you of between 30 and 50 per cent |
| the financial projections. The bank manager will want | | | | of the total set up costs including any working capital |
| to see a robust plan summarising the business | | | | requirement. In most cases security will be required to |
| opportunity however they won’t be interested a | | | | cover any loan or overdraft finance agreed. Treat it |
| lengthy document covering the operation of the | | | | as a working documentNo business plan is ever set in |
| business in minute detail. It’s always a good idea | | | | stone as objectives and forecasts can alter as you |
| to practice presenting your proposal before you | | | | gain a better understanding of your marketplace and |
| actually meet the bank manager. | | | | the business develops. The business plan is a working |
| What to include The essential elements of a plan will | | | | document and should be regularly referred to checking |
| include the past experience and skills of the business | | | | ongoing performance against the forecasts. It is likely |
| owner and key employees. A brief overview of the | | | | that the bank manager will check the account activity |
| business and the market is also important. The | | | | and compare it to the original projections, especially in |
| business operational issues should also be covered | | | | the early months of trading. If there are any major |
| including; premises, staffing, marketing, insurance, | | | | discrepancies expect to be questioned about them. |