CHEPSTOW SMALL BUSINESS ACCOUNTANTS 

  

Tel: 01291 _ 630133

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Does Your New Business Need A Business Plan

It’s never a good idea to begin a new business without having some kind of business plan. After all, having no business plan is like driving to an unknown city without a map. It’s not a good idea.

 

Businesses without a well-thought out plan typically fail within the first couple of years. This can end any would-be entrepreneur’s dreams.

 

The Strongest Part Of A Business Plan

A business plan’s strongest part is the thought that goes into the plan and not just the plan itself.  People wanting to create a plan should look at it like a road map with a clear route to follow.

What Should Be In A Business Plan

If you’re an impresario, what should your business plan entail? What can you do to ensure your business succeeds where others have failed?

 

1. It should have details of how your business will begin.

2. It should have a short synopsis of the business with the following sections outlined:

Sales and Marketing, Operations/Production, Purchasing, Personnel and Finance.

The financial section should include detailed forecasts which you and any investor can understand.

  

The short synopsis should briefly describe the main area of the business whilst also outlining the part each section plays in achieving the overall plan.

Sales and Marketing Section

The sales and marketing section needs to show an analysis of forecast sales and the marketing budget required to achieve those sales. It also needs to look at the strengths and weaknesses of the competition and to derive a strategy to be able to compete with them effectively.  The sales part of the business plan needs to explicitly note the sales volume for every product over the first year and at what price these products will be sold for. It should also take into consideration unexpected events which could have a negative effect on sales and profits and a worst case financial forecast should be prepared.

Operations/Production Section

This section will depend on the kind of business you will have and the variable on how the business will work. Does it provide services? Is it a retail business? Is it geared toward manufacturing?  The production section should detail the process that’s going to be used to produce the products you are going to sell.

Purchasing Section

The purchasing section should include an examination of how products are going to be sourced. Volumes must be stated and supply sources identified. It should also have real cost of all major items noted…nothing should be estimated.

Personnel Section

Your personnel section needs to include all the names of persons involved and a summary of their skills; it should also include their qualifications and previous experience. It should also lay out who it is you’ll need to recruit and the work they’ll perform in order for the business to succeed.

Financial Section

This part of the business plan should have the following financial forecasts -  profit and loss account, balance sheet and cash flow broken down by month for the first 2 or 3 years.   

 

The purchasing and sales and production numbers including the prices and volume need to be reflected in the financial report. Every serious assumption in the plan should be exposed to financial sensitivity examination and take into account the possible risks for price and volume levels.

 

There are so many benefits in having a detailed, well thought out business plan. If the business is thoroughly researched before it’s begun, there’s a significantly higher chance of it succeeding.

 

Chepstow Small Business Accountants are experts in producing Business Plans and Financial Forecasts so if you need any help please contact us. 

 

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