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Business Banking – Top 10 Tips on Writing Your Business
Plan
by Alistair Leckie
More Business Skills articles
Published on this site: February 16th, 2009 - See
more articles from this month
For any business, having a strong, and realistic business plan
is essential to success. Whether you are a new start up or an
established company, a business plan will enable you to analyse
your business, plan your goals, and assess what your current
position is. The core of your business plan should be the
financial aspects of what you want to achieve, and Steve
Jennings, Director of Business Banking at Alliance & Leicester
Commercial Bank, has the following top 10 tips on how to get
this crucial part of your plan right:
- You need to ensure that your business plan is structured in
a way to make it, clear and concise. In effect, a business plan
should work to sell both you and your company, so make sure that
the most important information is highlighted. Add supporting
commentary to back up any forecasts and projections. This area
is very important when it comes to any financial data that is
included, as the bank will use this information as the basis for
making a decision on any lending.
- Include basic information about you, your business and what
you are selling. Details about potential staff, equipment and
premises that are already in place or planned as a result of
investment should also be part of the business plan.
- Make any forecasts over a period of three to five years,
although you should concentrate on making the most detailed
breakdown for the first year. In business banking, the correct
financial information is essential. Double and triple check all
of the figures to ensure that they are 100% accurate, as the
majority of your business plan will hinge on your historical and
forecasted figures.
- Look at your business objectively and perform a SWOT
(Strengths, Weaknesses, Opportunities and Threats) analysis
about how you fit into the local or national retail sector. You
should pay attention to any weaknesses and threats, and analyze
them fully. A bank will perform this research as part of their
decision making process, and by providing this information, you
demonstrate that you have an understanding of potential pitfalls
and planning your approach to addressing them, both financially
and otherwise.
- Success is also important, and you need to show how you are
prepared for success and fast expansion. Things to consider
include the impact of additional staff in terms of the cost of
recruitment, training, and management.
- For a retail business cash is its lifeblood, so a
comprehensive cash flow analysis is vital. You will need to
include cash balance and monthly cash flow patterns over a
period of one to two years. This should include key factors like
sales and salaries. Your bank will use this to understand
exactly how much operating capital you need. Many small
businesses make the mistake of asking for too little financial
support, and this can leave a shortfall that could prove
disastrous. By managing your finances through a business current
account, you can keep on top of payments and income more easily.
- Make a month-by-month sales forecast. If you have already
been in business for a year, review the sales over the past 12
months in order to give figures to forecast expected sales for
the coming year. A new business will have to use judgement and
extensive market research to provide this information. It is
important to be realistic, and bear in mind that it might take a
while for sales to build-up at first, so consider building a
quieter period into the initial few months, and provide your
bank with information about how you plan to cover your outgoings
in the event of this happening.
- You should provide a full profit and loss forecast, as this
will enable you to evaluate the level of profit you expect to
make from sales against any costs. Costs should include
operational costs as well as key calendar dates for tax. Include
information about costs that you cannot control including tax
levels and wages. You can use a special business deposit account
to store any surplus funds, as these will provide you with a
cushion under tougher trading conditions.
- It is important to keep a close eye on your competitors, as
well as any potential changes in your local retail market and
make the necessary adjustments. Remember that as your business
grows and develops, your competitors will need to react and grow
too, so keep on top of any changes in the market.
- Your business plan needs to be revisited as your
circumstances change. Revisit it each year to take into account
your growth, staffing requirements and other factors such as new
product lines.
Alistair Leckie: Provides expert information
about
https://www.alliance-leicestercommercialbank.co.uk/content/HP000001.asp
business banking particularly if looking to open a
https://www.alliance-leicestercommercialbank.co.uk/content/SB010002.asp
business current account or a
https://www.alliance-leicestercommercialbank.co.uk/content/SB020002.asp
business deposit account.
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