Business Plan and Balance Sheets

Business Plan Usually created to gather funding for a venture Not just the finance but includes –The market and it's state –The business concept

Business Plan components A synopsis, the concept of the business, the market forecasts (revenue) and costs, the logistics i.e. the operations, the finance i.e. –the source of funds (sales) and the costs of sales –the operational costs, –the finance is usually expressed in terms of a profit and loss account and cash-flow.

Six stages of Business plan stage 1 - Planning ahead stage 2 - Have you got what it takes? stage 3 - Who can you turn to? stage 4 - What sort of business are you? stage 5 - What are you forecasting? stage 6 - The money

Planning Ahead Objectives for yourself and your business Your service or product The market including competitors and how your service/product is different Pricing what are you going to charge? Work out your expenses. What do you need to earn to break even? Promoting your service/product- look at the options available and cost these too Selling, you need to be clear about who your target customers are before you devise the right sales approach.

Have you the skill, knowledge and luck to make it?

Stage 3 - who can you turn to? 1.Business Links 2.Training and Enterprise Councils 3.British Franchise Association 4.Enterprise Agencies 5.Chambers of Commerce 6.Trade Associations 7.The Princes Youth Business Trust

Step 4 - What sort of business are you? Sole Trader Partnership Private Limited Company Franchise

Sole Trader The most common form of ownership. Advantages –People have the freedom to choose how to do things –business is relatively simple to manage. Disadvantages –However there is unlimited liability.

Partnership Typically 2 to 20 people. The following must be considered and agreed –Who has put what into the business? –Who does what work? –How profits are shared. –What would happen if the partnership were wound up. Get it agreed and in writing

Private Limited Company PLC A limited company is separate from its owners. Consequently owners are not liable for its debts. The company must be registered and submit properly prepared statutory financial statements.

Franchise A franchisee is granted the right by the franchiser to run a business using an agreed format. The franchiser typically provides: –an established trade name, product or service –plus the management skills and back up for successful operation. Examples are Subway and McDonald's

Step 5 - What are you forecasting? Cash Flow –Forecasts changes in the cash flow into and out of the business. –Cash flows predict when cash might have to be borrowed or when it could be invested. Profit and Loss Account –This is a projection of the profit or loss the firm thinks it will achieve.

12 steps necessary for a business plan 1.The concept 2.Personnel 3.The Product/Service 4.The Market 5.Market Research 6.The Marketing Mix 7.Sales Forecasts 8.Operations 9.Profit and Loss 10.Cash Flow Forecast 11.Extras 12.Reality Check

Step 6 The money 4 sources are: –Venture Capitalists –Business Angels –Bankers –Friends and Family