Key Steps To Developing A Quality Business Plan

There are many important steps to consider when developing a business plan for your company, but the first step is to fully understand the main uses of a business-plan.

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Do I Need A Business Plan

Not everyone who starts and runs a business begins with a business plan, but it certainly helps to have one. If you are seeking funding from a venture capitalist, you will certainly need a comprehensive business plan that is well thought out and demonstrates sound business reasoning.

If you are approaching a banker for a loan for a start-up, you will require a business plan. If you have an existing business and are approaching a bank for capital to expand the business, they often will not require a business plan, but they may look more favourably on your application if you have one.

Reasons for writing a business plan include:
- Support a loan application
- Raise equity funding
- Define objectives and describe programs to achieve those objectives
- Create a regular business review and course correction process
- Define a new business
- Define agreements between partners
- Set a value on a business for sale or legal purposes
- Evaluate a new product line, promotion, or expansion

Read the full article here: http://ukba.co.uk/index.php?option=com_content&task=view&id=45#bp2

Download a free business plan template - click here.

Source: Palo Alto Business Software
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A business plan to obtain funds takes much longer and depends on the company size and complexity

For example, if you are looking to apply for venture capital or business angel funding, the 8 points of interest to a potential investor are:

:: What is the business?
:: What is the product/service?
:: What is the market place?
:: What is the future potential of the business?
:: What are the forecast profit and turnover figures?
:: What is the investment required?
:: What are the prospects for the Investor?
:: What is the exit strategy?

Also the executive summary is very important - 90%+ of all angels will only read the executive summary and if it does not include the 8 things that interest them there is a very strong likelihood that they will give up and start on reading the next plan.

The executive summary should be no more than 2 pages in length.

Free Business Plan Template: click here to access
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Having a business plan, is key to ensuring that your business ends up being how you want it to be

Are you a small business struggling to complete a business plan in order to run your business or required by your bank as a condition of a loan?

Or maybe you are a larger, mature business looking for some help with some strategic business planning?

You wouldn’t try and climb a mountain without being prepared (map, compass, equipment, food drink, etc) so why would you start or run a business without knowing where you are going?
Whatever your planning need – you have come to the right place!

What does a business plan do?

* Gets the ideas from your head onto paper
* Gives you clarity and focus for your business
* Allows you to budget and manage your cash flow
* Helps you identify your products, services and the market

What’s in a business plan?

* Vision – your future aspirations
* Mission – what you do for your clients
* Objectives – defined targets for your business
* Strategies – how are you going to get there
* Plans & Actions – what you are going to do to successfully achieve it

A working business plan need not cost the earth or take weeks to develop. The UKBA™ can do this interactively with the business owner in less than a day at a cost of £600 or less! - This is less than you would pay for a plumber or for a garage to repair your car and is certainly more cost effective than your accountant!

Find out more about business planning: http://ukba.co.uk/index.php?option=com_content&task=view&id=25&Itemid=40

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Over 850 small businesses that failed in Q4/08 could have stayed afloat if they had sought expert advice

According to research by Tenon Recovery.

The research found that approximately one in eight small companies fail to carry out any business forecasting and one in three only carry out forecasting once a year.

It is estimated that a business has an average of 33 weeks to determine whether a series of turnaround initiatives will be enough to save the firm if entrepreneurs spot the warning signs early enough and act upon them.

"Identifying any potential issues for a business early enough can mean the difference between a turnaround, restructuring or insolvency. It is a case of a stitch in time can save an entrepreneur's dreams from unravelling," said Carl Jackson, national head of Tenon Recovery.

"Now is the time to take a proactive approach and do everything possible to protect a business. Without regular business health checks and forecasting many more entrepreneurs will find themselves adding to the insolvency statistics."

Make sure you have a business plan in place - click here for a free template.

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Business planning is more important than ever

Small businesses make up the vast majority of all businesses in the UK, yet fewer than half of these organisations have a plan in place should disaster strike. A number of high profile incidents, such as the recent extreme weather have brought sharply into focus the importance of business continuity plans for business of all sizes.

What classifies as a disaster for one company can be very different to another. If a small accountancy firm fails to back up its data, and has no plans for keeping that data secure in the event of a fire, it could be taken to court for failure to comply with data storage regulations affecting financial organisations.

Recent research carried out by the Confederation of British Industry (CBI) shows that, despite the fact that 60% of medium-sized firms currently use the internet in their supply chains, less than half of these have no security to cope with online attacks and no backup plans.

Read more here: http://www.newbusiness.co.uk/articles/business-continuity/business-planning-more-important-ever


Free Business Plan Template - click here.

Recession Insights - Top 10 Critical Business Priorities

1 Provide excellent customer service. We can’t survive without customers, so don’t forget them. Listen and respond to their needs, demonstrate the value you place in them. Review customer and client feedback formally – this will be the litmus test of what you are delivering (and how) and will help to inform positive changes where necessary. Always go the extra mile for your most profitable and loyal customers.

2 Innovate. Develop new unique products and services to distinguish you from the competition. Focus on those that add tangible value or reduce costs for your customers and clients.

3 Invest in people. Offer customer-focused training and reward high performers. The most talented and valuable members of your workforce are those most able to move on during a slowdown. Introduce simple, cost-effective recognition programmes and allow them the flexibility to work where or when they need to.

4 Maintain quality. If you trade on quality, do not cut costs that are visible to the customer in the short term, compromising your reputation in the long term.

5 Reduce debt and manage cashflow. Tighten internal financial procedures immediately and look to secure longer term contracts where possible. The single biggest regret of struggling businesses was that they did this too late, or not at all, which speaks volumes.

6 Respond to the market quickly. Be flexible. Ccapitalise on your size and ability to change direction quickly. Carry out detailed risk assessments on all areas of your business and customer base – identify ‘safe’ areas to focus on.

7 Prioritise marketing. Do not cut budgets or stop advertising as a knee-jerk reaction to challenging trading conditions. The most successful businesses use slowdowns as an opportunity to grow, share and broadcast their message louder than the competition. Crucially, you need to remind your customers that you’re still in business and instil confidence in your existing clients. Slowdowns also offer greater scope for canny businesses to negotiate for favourable deals.

8 Forecasting accurately and plan realistically. Super SMEs tended to have a ‘slowdown plan’ in place. If you haven’t written one, start now. Encourage open and honest communication with your teams on what is realistic. Revisit old order-books to ensure no opportunities are being missed.

9 Know your market. Increase market knowledge and insight. Be seen as the thought-leader in your field and enable your workforce to become experts through sharing information. Use readily available free research online to boost your expertise.

10 Invest in technologies to help your people. The need to work more efficiently has never been higher up the agenda. Invest wisely in IT solutions focused on optimising your workforce productivity, reducing wastage and enabling smarter (not necessarily harder or longer) working.


Extract from: A Guide To Plain Sailing Through The Recession - Plantronic
s - www.plantronics.com.

The full guide can be downloaded here: http://www.sme-guide.co.uk/

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Recession Insights - Planning & Strategy

The message is clear. Businesses that review their business plans monthly are most likely to be riding the economic storm. According to our research, they are 42% more likely to be unaffected or booming during the slowdown. Businesses who are confident about the future are also three times more likely to have had a strategy in place for a worsened economic climate than those who fear for their survival.

One in twenty SMEs admitted that they don’t really have a business plan of any description (never mind a revised strategy for a global slowdown) while 17% said that their business plan only gets reviewed and revised once a year. At the root of this problem is the fact that 62% of all SMEs have never had to face a slowdown before. They never really needed a plan when times were good, and never anticipated that they would need one for the future. Six out of ten SMEs did not have a plan or strategy in place for a worsened economic climate.

A worrying trend for the wider economy, and indeed the future, is that the ‘young guns’ who have thrived for the past decade or more through good economic conditions were least likely to have put a strategy in place for bleaker times. Two thirds did not have a plan ready for harsher times, compared to 40% of 55 year olds, who by virtue of their age and experience, have seen something similar (if even vaguely) before. The younger working nation have much to learn from mentors of previous slowdowns and recession.


Extract from: A Guide To Plain Sailing Through The Recession - Plantronics - www.plantronics.com.

The full guide can be downloaded here: http://www.sme-guide.co.uk/

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Survive the Downturn - Plan Ahead

Extract from ICAEW report: 8 Ways To Survive The Downturn

Find out how taking a long-term view can help your business survive the downturn.

It is all too easy to focus on quick remedies at the expense of the long-term view.

As well as concentrating on the immediate challenges you face, revisit your growth plans and strategy: are your assumptions still valid?


Prepare contingency plans

Consider a number of different scenarios:

* What are your options to take advantage of any strategic opportunities that arise?
* What steps do you need to take now to ensure you are well positioned to take advantage of the economic recovery when it comes?

Ensure that you have contingency plans in place in each case.


Review new and existing markets

Now is also a good time to review new as well as existing markets. Where are your key markets and customers, now and in the future?

Be prepared to examine these critically. Are you reliant on a major company or market? Are any of these at risk?

You may be unable to do anything in the short term but an over reliance on a major customer can threaten the viability of the business. Regularly obtain credit reports and get feedback from staff in contact with them.

Consider international and global markets which may present new opportunities.


Think about your competitors

Also, think about how your competitors are faring: how are they likely to respond to the current crisis? Does this present an opportunity for you?

Collect information about your competitors from staff, suppliers and customers: it might help to identify potential opportunities.

Source ICAEW - full report can be downloaded by clicking here.

Cashflow forecasts

A cashflow forecast is an essential management tool. You need to know what monies are owed to you at any one time and when payment is likely to be received. You then need to know what bills you have to pay and when – and reconcile the two to make sure you have enough cash to meet your outgoings.

“What we often find is that businesses come in asking to extend their overdraft facility because they are not being paid on time or they have suffered a bad debt. Often they leave this until the last minute – when they need the money rather than arranging an adequate facility well in advance. The reason why they are in this situation is usually because they don’t have an adequate cashflow forecast – or any at all. If you cannot prepare one of these yourself, ask your business advisor.”
Mike Ford, Senior Business Manager, North Staffordshire Business Centre.

Calculate the worst case scenario in terms of cashflow – and that is the facility you should be trying to arrange.

Also look at ways of reducing your need to borrow such as:

• Reviewing who you are extending credit to – and how much credit you are extending to each customer
• Reviewing how long you are allowing your customers to pay you – and seeing if this can be shortened
• Negotiating longer payment terms yourself – so you have longer to pay


Financing cashflow: the options

• Overdrafts: Ideal for day-to-day cashflow needs – but you may need to consider other options if you are near your limit, cannot arrange a larger facility, or want to reduce the monthly cost or free up your facility for working capital.

• Loans: These spread the cost of borrowing over a longer period – consider putting the element of your overdraft that is “solid debt” into a loan to free up your working capital.

• Invoice discounting: This will release cashflow more quickly. Invoice Finance can give you up to 90% of the invoice value when it’s issued, and the rest (less fees) when it is paid. It can provide bad debt protection too as the invoice discounter can assess your customers and set credit limits for each of them. If a customer becomes formally insolvent, you will be paid 100% of what is owed provided you trade within these limits.

• Asset financing/leasing: This can release cashflow tied up in depreciating assets such as company cars, computers and machinery and equipment. The finance is secured on the asset itself, freeing up your other security (often your property) to secure and raise other forms of finance. Installation, maintenance, servicing and insurance can all be included, making your life easier.

For free business planning software - click here.

For a free business plan template, click here.

For a free cash flow template, click here.


[Extract from Trading Through The Economic Downturn - published by NatWest - full Guide available by clicking here]

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