Business Planning

Welcome to the second edition of the newsletter for Start-ups and SME's -?The SME Snapshot.?We are here to help with concise, easy-to-digest tips and advice on how best to look after your business - from the experts at AFP Services. To find out more about AFP and what we do, click?here. To make sure you don't miss next month's edition - subscribe!

This month, we are looking at the beginning of the journey, the all-important business plan. What needs to be included? How do you format it? Here's our view.

Writing a business plan is essential for starting a business. It describes your company, what your business aims to achieve and looks at how to achieve it. It needs to be clear, show problems realistically, set goals, and set measurements for progress.

So, how exactly do you go about making one, or improving what you already have? Don't fall down the common pitfalls, follow our guide below.

1. Make a clear "Title" page, outlining the company name and trading name if applicable.

2. After the title page, you'll need to have an "Executive Summary". Though it sits at the front of the plan, it's actually better to write this part last, as it needs to gain attention by creating a summary of the following information.

3. Begin your "Business" section by looking at your company's product/services, then go further into detail about aims and objectives. Explain its history, ownership, structure and overview of the market. Address any areas of weakness - being honest and open from the outset will help investors see you are aware of the risks and how to address them.

4. Next is the "Market Analysis". This section covers market research, your target audience, a summary of competitors, any existing customers and sales, and your marketing strategy and goals. It's key to focus on likely sales, growth, profit margins and costs. Get into the detail, and push your passion!

5. Now it's time for how your business will function operationally. Think about the background, experience and training of your management team, and make sure to cover overall staff costs and company benefits. Then move on to the company's need for capital; this could be from equipment to facilities and extra personnel. Finally, remember to cover the logistical details of the business. How will sales, finance, administration, stock control etc. be handled? You will need to describe the systems, procedures and controls in place in all aspects, following the customer journey from purchase to delivery, including information about suppliers.

6. Now come the numbers. Crucially, financial forecasting is where you translate the aims and objectives of the business mentioned earlier into measurable, quantifiable data. Think about: estimated costs of starting, and running the business; sales forecasts; profit and loss forecasting for 3 years ahead; cash flow forecasts; budgets, and pricing. Any assumptions will be questioned- so be ready with justifications. #TeamAFP creates financial forecasts for our clients every single day- our Accounting Services department knows exactly how to translate your vision into the data stakeholders need. So, if you want a hand from the experts, we're here to help.

7. What are the risks to the business? Consider the risks and legal obligations around insurances, licenses, and even health and safety in any premises you may need. Think in detail about how you would react to any issues that may arise. This helps minimise risk, and showing you have thought it through can help potential investors gain more confidence in the business.

8. Lastly, the appendix. Ensure copies of all essential supporting documents such as contracts, credit history, cash flow plans, market research results, bank statements, reports and tax returns are included.

Remember - A business plan is highly confidential, so tailor your appendix to the correct recipient.

Finally, Make sure it's clear, concise and realistic. - having high hopes is admirable, but without evidence, may not be taken seriously.

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The SME Snapshot is published monthly, focusing on topics that are important to Start-ups, SME's and growing businesses. Thought of something you think should be covered? Tell us in the comments below ??

Looking for support in growing your business? Contact us at [email protected]. To find out more about how we help businesses grow the smart way, visit our website here.

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