New Road to Liberty

If you’re looking for information on business plans, then the chances are you have spoken to a bank or financial institute about a business idea and they have asked you to go away and write a business plan for them. I’m also sure they will have given you no advice as to what key facts they will be looking for in your plan. For most people writing a business plan will be a daunting task. Unfortunately, this can, and does, put many people off starting up their own business and commits them to a life of working for someone else. I intend to show you why you shouldn’t be running away from writing your own business plan and even better, how to get around writing one at all.

Like most things in life, experience is key to success. I can’t over emphasise how important it is to get your business plan right first time, as banks are not impressed by return visits with second attempts. Although I said you shouldn’t run away from the plan, I didn’t actually say it has to be all your own work. Some banks will give you packs which set out a basic business plan for you and all you do is fill in the blanks. This can work for a lot of people, as their business plan may be quite simple and low risk for the banks. If you want to be more certain of gaining the funding you require to start your business, then you will need a business plan that goes into greater detail.

Writing your own business plan from scratch can be hard work, so you need to go about this in the correct manner. Do not try to write the plan from first page to last page, as many areas are likely to change over the weeks leaving some of your early information outdated before it’s complete.

Start by writing down exactly what the business is about, what you are trying to achieve and over what time period. What your business is going to be about is completely down to you, but it will be advantage if it’s in an industry or service that you personally have experience within. You can always pay for that experience, but this always puts great pressure on your finances from day one.

Next you need to look at the basic finances of the business to get a rough idea of whether it can be profitable. This information is made up of 5 main areas:

Start-up cost for the business (manufacturing equipment, computer equipment etc) Annual indirect costs (rent, rates, electricity, wages etc) Individual survival budget (your personal income needed to live) Annual direct costs (cost of sales) Income (from sales)

If you have an accurate plan which includes all of the 5 point above, then you will be able to find out how profitable the business plan really is. This will also give you an idea of how much (if at all) you will need to borrow from the bank to realise your new business. Research is imperative to a successful plan, otherwise your business will have unforeseen problems once you start trading. Remember that putting false data into a business plan might fool an unsuspecting bank manager, but the outcome is likely to backfire on you in the future.

Once you have your basic finances and structure in place, you need to set about writing the plan in a format which any finance company will find easy to understand. The layout of the plan can be as important as the contents. It’s no good having well researched and detailed information, if the investors or bank managers are unable to understand what you have written. Make sure you have a clear contents page and that all your referrals to appendixes are correctly labelled and are relevant.

Finally, present your new business plan in a professional folder or wallet and make several copies for the different financial institutes you’re going to see. Make sure you know your plan well and can go to a particular page quickly should you be asked a question about an area of the business.