We are not just accountants, we are business owners. We understand the myriad of pressures on your time.

Our focus is your success through combining the latest technology with traditional values.

Schedule a Call

Growing Your Business and the Importance of the Business Plan

Written by Jon Cooper

Whether the business is a new start or looking to develop to the next level, seeking, securing and managing the finances is a crucial task.  The greatest aid for this is a coherent Business Plan.

It is all too easy to see the Business Plan as set in stone whereas it needs to be regarded as an evolving document that reflects the pitfalls and triumphs the business encounters on the journey from concept to reality.

The Business Plan provides the opportunity for the entrepreneur to highlight their vision and objectives both to third party investors and the key personnel of the company.

Whilst the Business Plan can be nuanced to suit a particular target audience, there are certain benchmarks that need to be included.

The Executive Summary is critical.  In essence, this is the chance to engage with potential investors or lenders.  As a result, it needs to convey the salient points in a crisp and concise manner without drilling into too much detail.

The remainder of the Business Plan is designed to inspire confidence that the venture is more than just a germ of an idea, it is a thought through and considered proposal.  For this the following should be included:

–          The Key Personnel detailing who they are, what their area of responsibility will be and their experience and expertise.

–          Market Analysis on the sector, the products or services provided and the competitors. 

–          The Client Base in terms of both the current order book and the potential pipeline.

–          A Marketing Plan on how sales volumes can be increased to existing clients and how new clients will be won.

–          For existing businesses, the last three years of Financial Data together with the key performance indicators.

–          Financial Forecasts for the next three to five years detailing the core assumptions.

–          Cash-Flow Analysis and Projections out for a minimum of two years detailing the amount of funding that will be required.  In the cases of new starts and recoveries, the Projections should go forward to the point where the business moves into profit.

–          A SWOT Analysis that focuses on the strengths, weaknesses, opportunities and threats to the business.

–          Asset Management that details the key assumptions on the control of capital expenditure, stock, debtors and creditors over the forecast period.

–          Investment Schedule that shows how much the owners have committed to the venture, the details of any existing third party investment and the new funding requirement.  Depending on the type of investment sort, attention should be drawn to potential tax reliefs for the lender (such as the Seed Enterprise Investment Scheme featured in our previous newsletter https://cooperfaure.co.uk/business-finance/) and how either the loan will be repaid or the shareholder will receive a return.

The absolute golden rule is to ensure that the Business Plan has a sufficient inbuilt margin to ensure that the proposal is fully funded.  There is no quicker way to lose an investor’s confidence than by having to revisit for additional funding for the current plan.

At CooperFaure, we have extensive knowledge of business planning and cash-flow forecasting.  If you would like to discuss your circumstances or have any questions, please contact welcome@cooperfaure.co.uk to arrange an initial free consultation.

Keep Reading…

Show More Articles