To get ahead - get a good business plan
Starting your own business is a major step which can be very daunting. But with careful financial planning and common sense, ACCA (the Association of Chartered Certified Accountants) says that what seems like a long and winding road can become a short, straightforward path.
Professor Robin Jarvis, ACCA Head of Small Business, said: "More and more people are seeing self-employment as an attractive option with recent figures showing a 13% increase in start ups since 1988 to 453,000 per annum.
"For some the motivation to set up in business is the potential to earn more money, whilst for others 'quality of life' is the primary driver, combining work with enhanced leisure and family activities. For whichever reason, the starting point for any budding entrepreneur should be a sound, well thought out and realistic business plan, incorporating a financial budget. This will indicate how much funding will be needed to start up the business and support it during the first year's trading."
Kemi Laniyan, an entrepreneur who recently launched her new business - Caf� Camouflage - which focuses on providing food for people with food allergies or intolerances - found her business plan essential to raising finance. It also won her a national award and she was recently presented with the ACCA Award for the Best Financial Plan at the 2005 handbag.com Barclays Business Plan Awards.
She said: "It was important that the financial element of my business plan was broken down into clear sections and - as well as winning this prestigious award - it also helped me to secure a grant from the London Development Agency. My business plan will be my bible for the next year as I start trading."
As one of the award judges, Professor Robin Jarvis said that Kemi's plan stood out against stiff competition because it demonstrated that she had carried out detailed research and identified the structure for overseeing the financial management of the caf�.
He said: "All the relevant financial statements had been embodied into the plan - most importantly the start up investment, cash flow forecasts for three years and details of employment costs and pricing. All these were also supported by a sound discussion about the assumptions underpinning the plan and other supporting information."
Whilst a business plan is essential in securing finance to fund a new venture it should go further than just a sheet of numbers. It should include:
* Summary - an introduction to you, your business, product or service and financial overview.
* Management - details of you (and partners) and business experience.
* Product / Service - detail the key points
* Marketing - estimated present and future sales capability, competitors and customer profile
* Sales - your unique selling points and prices, and advertising
* Operational - business location, equipment, stock and staff
* Financial - profit and loss account, balance sheet and cash flow forecast
* ObjectivesProfessor Robin Jarvis concluded: "Obviously anybody thinking of embarking on a new business should consider seeking help from the outset. All potential new businesses need a friendly helping hand - almost an unofficial partner - to unravel all the jargon and regulations. Therefore, once you have decided whether or not you have what it takes to run a business, the next step should be to find a qualified accountant who will act as your business adviser."
