What else you can think of as a rewarding experience when you are running your own business? Statistics says, the new businesses starting up in the UK every year is approximately half a million. For these bunch of first-time entrepreneurs and most of them without any previous business knowledge or experience , crucial decisions taken in such a short age can be the most difficult aned most important . Particularly in this age, the impulse is to start sharing a product or service with the world in the lowest possible time when you have a good idea like that. Moreover, one in three new businesses ceases to trade within just 3 years and only one in five is still in business after 10 years in the UK according to statistics – that is what we should talk about.

Preparation is a must

Going to start up new business on your own? You must have a very good preparation for that. This preparation includes the market research and test of your product or service.  Our previous article covered market research and focused on getting feedback on business idea and strategies. It also gave a clear idea on where the retailer premises should be located.

You need to focus on the major factors. You need to fix a reasonable price and decide how much you will finance for that. According to research, the most common cause of business failure is the lack of finance. So a perfect business plan should be concentrated on with robust flow of cash and overviews of profit.

If you have to take preparation for a formal business plan and together with that , if you plan to raise your fund from either bank or any other private source , for the first 2 years you should put all forecasts of trading together. Surprisingly, most of the entrepreneurs never count the huge amount of time, money and effort they gave to start up a business and continue it. Usually it gives a very common view that they start on a shoestring and have to struggle to get finance for expenditure.

What is the contribution of cash and profit forecast to your overall business plan? Only this cash and spend forecast can give overview how much scope there is for reserve of the finance and slippage. Once you can prepare the forecasts, these can be very essential tools to keep the records of the business progress. If you can achieve your business targets, surely you can say to have a good management. These will work as testimonials which will demonstrate that you are trustworthy with orders and credit to customers and suppliers.

Spreadsheets or specific software can play a vital role to give you the forecasts of Profit and cash flow. Those who are not quite familiar with creating records of all financial information can seek assistance of the professional chartered accountants.

Provocative but credible Business plans

Being provocative and credible is not enough, business plans must have a clear evidence of the benefits of the customer and of growth and prospects for the future .An executive summary can be very vital having a clear statement of your financial objectives, the business plans and forecasts of profit.

Executive summary can be enough only in the cases of the banks. But if you plan for outside investment, besides executive summary, you will have to think about these following:

  • Company’s background & history
  • Current and upcoming products and/or services (including patents)
  • Sales and delivery channels
  • Ways of production
  • Planning about the operation of business
  • Planning to succeed
  • Brief description of the market and sector , details of the marketing strategy , ins and outs of sales and distribution process
  • Full details of the management team
  • Financial information (including debt finance already in place)
  • A risk analysis.

Still confused to have a business plan? To be straightforward, if you have already made a well-organized business plan, it is going to work as a very vital pillar of your success in your business in the coming days and from time to time, may be the professional advices of a skilled chartered accountant may seem invaluable .It will work as your assistant to set your realistic financial targets, budget establishment, plan ahead and compare forecast figures with the real results. And if you are yet to make your own business plan and you are planning to secure bank finance or monitor your business performance against your own benchmarks for the next few years, you are going to need a well-organized business plan for sure. Once you have yours, it will surely lead your business to your desired milestones.