Business Plans and Forecasts are prepared for any number of reasons, but they generally revolve around a perceived need for finance in one form or another. You may require more working capital for your business, or you may be investigating a specific growth project. You may even be thinking of selling your business to an outside investor. Whatever the purpose, you will need to be able to demonstrate that you have a sustainable business that will be able to meet its repayment schedule, together with appropriate commercial management and a good track record. And this is best achieved through the preparation of a detailed Business Plan.

Studies have shown that people who have written down their goals are generally more successful than those who haven’t. So it makes sense to set yourself realistic but demanding targets. Business Planning helps you understand what might be achievable and what might not be, and how this might change over time. A “Single Page Business Plan”, described in more detail at the foot of this page, is an ideal way to keep track of the most important elements of your business life on an ongoing basis.

The Business Plan

A business plan isn’t just about the numbers. It sets out the strategy of the business, linking its history to its plans for the future. It explains what it’s doing now, where it wants to get to, and how it’s going to get there. Moreover, a professionally produced business plan will increase your credibility with potential finance providers, addressing the key questions that they will ask, be they banks, investors or grant providers.

In order to help you prepare your business plan, we will start off by discussing exactly what you need it for, and the potential audience. The structure, level of detail, even the basic content, will be different depending on what message you want to get across, and to whom.

You will then be guided through a structured process that will ensure that all the appropriate information is incorporated into the business plan. This would normally include background information, details about the market in which you operate, your staffing and management structure, your marketing and operational plans, and your financial forecasts.

If this is your first experience of business planning, a Business Strategy Session may be invaluable to help clarify your thoughts.

Financial Forecasts

The financial forecasts will show how much finance you require and will demonstrate your ability to repay it.

We start the process by collecting together financial information from your business for current and previous years, to identify where you are now, and any trends in your business.

The next stage is to discuss your plans with you, and your expectations for the business. You will be familiar with the market place you are operating in and will have your own predictions of what is likely to happen in the next twelve months.

The data collected so far will enable us to prepare forecasts which deal with what is likely to happen in your business. They are not prepared on the basis of "take last year’s figures and add a bit" or to a generic formula.

Trying to predict the future is always a difficult task. To help, we will prepare forecasts based on several different scenarios, showing what might happen if you don’t quite meet your targets.

What will the forecasts cover?

Cash Flow Forecast – showing the money expected to flow in and out of the business on a monthly basis.

Profit and Loss Forecast – showing the expected profit of the business again on a month by month basis.

Balance Sheet Forecast – a snap shot of the business at the end of each month, showing its assets, liabilities and reserves.

A Single Page Business Plan

Sometimes, particularly for smaller businesses wanting to prepare regular overviews for internal purposes, a shorter final product is more appropriate. The aim is to condense your thinking into just one page of A4 paper, covering the following topics:

·  Vision Statement – the dream

·  Mission Statement – why the business exists

·  Goals – definitions of success

·  Strategies – how to grow and manage the business

·  Plans – specific actions

Clearly there is some overlap between each of the headings, and the work we do together will highlight these. It’s a shorter process than a full-scale business plan, but the need to set out only the key points usually leads to debates as to the relative importance and interdependence of the various aspects of the business.

Ideally this is an exercise that should be revisited and fine-tuned on a regular basis. Comparing this year’s end-product with one prepared a few years ago can be most enlightening!