Sometimes even the best ideas don’t get funding at first….
But if you have the right strategy you can still succeed, that’s why a business plan is really important
Approximately a third of all SME’s in the UK don’t have a Business Plan, that’s about 1.5m businesses, so if you don’t have one, here are some reasons why you should prepare one….
Research by Exact Software shows that SME’s with Business Plans make 20% more profit
Having a business plan doubles your chances of increasing profits, increasing revenue, attracting new clients
A well-researched business plan which includes the right figures and realistic forecasts will reassure potential investors you are a sensible investment opportunity
A Business Plan will help you set out and achieve your goals
It will help you set goals for your managers and staff
The Business Plan will help you plan your cash flow and forecast Capital Expenditure
A Business Plan will help you secure Business Finance and Loans
You can plan your succession strategy or prepare the business for sale
A Business Plan tests the feasibility of your business idea
It will help you plan for the recruitment of Staff
The New Enterprise Allowance can provide money and support to help people start their own business if they get certain benefits and have a business idea that could work.
The scheme has resulted in:
around 460 new businesses being set up each week – around 53,000 in total
12,360 businesses being started by people aged 50 or over
people over 18 who are claiming Jobseeker’s Allowance
lone parents on Income Support
people on Employment and Support Allowance in the work-related activity group
People on the scheme get expert help and advice from a business mentor who will help them to develop their business idea and write a business plan. If the business plan is approved, they are eligible for financial support payable through a weekly allowance over 26 weeks up to a total of £1,274.
A business plan is a written document that describes your business. It covers objectives, strategies, sales, marketing and financial forecasts.
A business plan helps you to:
clarify your business idea
spot potential problems
set out your goals
measure your progress
Approximately a third of all SME’s in the UK don’t have a Business Plan, that’s about 1.5m businesses, so if you don’t have one, here are some reasons why you should prepare one….
Research by Exact Software shows that SME’s with Business Plans make 20% more profit
Having a business plan doubles your chances of increasing profits, increasing revenue, attracting new clients
A well-researched business plan which includes the right figures and realistic forecasts will reassure potential investors you are a sensible investment opportunity
A Business Plan will help you set out and achieve your goals
It will help you set goals for your managers and staff
The Business Plan will help you plan your cash flow and forecast Capital Expenditure
A Business Plan will help you secure Business Finance and Loans
You can plan your succession strategy or prepare the business for sale
A Business Plan tests the feasibility of your business idea
It will help you plan for the recruitment of Staff
Starting a new business is always a challenge but there are some common financial mistakes that all start ups should avoid.
Lack of Planning – Businesses normally start with a great idea but you need to have business model that works and to at least have a basic business plan and cash flow.
Over Trading – this happens when a business expands too quickly for its working capital, when you start a new business its tempting to accept every order without considering whether you can have the resources and the cash to deliver.
Wasted Marketing and Advertising – new businesses are an easy target for marketing companies but its important to stick to the essentials to start with, having a website, e mail and business cards are essential, magazine advertising and other things can be done as the business grows, in the early stages you are experimenting and finding your market so if you spend too much too soon you might promote the wrong things at the wrong price.
Wrong Business Structure – Before you start your business get some advice from your accountant, its important to choose the right structure not just for tax reasons but also for investment and ownership.
Wrong Staff – Choosing the right team is critical for business success, choose staff that have the right skills, the right attitude and are dedicated to the success of the business.
Over Ambitious – All too often businesses plans are over ambitious with sales growing rapidly, often they prove to be unrealistic, when preparing a sales forecast start with your order book and be cautious in your assumptions.
Overheads – Many businesses over spend on overheads for example renting premises too early, work from home, if you can, to minimise costs.
Stock Problems – Buying the wrong stock, under or over stocking are also issues for start ups, try to adopt a ‘just in time’ stock policy.
Getting Paid – A sale is only a sale if you get paid, any one can give things away, make sure you manage your clients and get paid on time.
Competition – Keep an eye on your competitors, they will be watching you and responding to maintain their market share.
There were an estimated 4.8 million businesses in the UK which employed 23.9 million people, and had a combined turnover of £3,100 billion
SMEs accounted for 99.9 per cent of of all private sector businesses in the UK, 59.1 per cent of private sector employment and 48.8 per cent of private sector turnover
SMEs employed 14.1 million people and had a combined turnover of £1,500 billion
Small businesses alone accounted for 47 per cent of private sector employment and 34.4 per cent of turnover
Of all businesses, 62.7 per cent (three million) were sole proprietorships, 28 per cent (1.3 million) were companies and 9.3 per cent (448,000) partnerships
There were 907,000 businesses operating in the construction sector – nearly a fifth of all businesses