A business plan and financial forecasts are an essential tool for any business – and research shows that businesses with a business plan double their chances of increasing profits and revenues and attracting new clients.
By outlining your business strategy and going through the business planning process you will review options that will determine your success, and identify the best opportunities and how to make the most of them. Your plan includes forecasting your sales and working out your cash flow and funding requirements.
More people are starting
businesses than ever before. It’s a big decision to start your own
business, and to maximise the chances of business success it requires
careful planning, research and preparation.
Many new business owners see writing a business plan as a daunting task and dread the prospect of having to keep accounts and all the associated paperwork. Writing a business plan is a crucial part of developing your business and a good business plan is a requirement for acquiring most forms of funding.
funding pitch is your chance to make your business attractive to potential
investors. To maximise your chances of success you need to prepare well.
Often you don’t get long to deliver your funding pitches, so you need to be clear about what your audience will want to know and the unique selling point of your business, and importantly, the impact the funding will have on the development of your business idea and the growth of your business.
Managing your business’s finances is important to both grow your business and to provide you with your essential income. Getting financial management right from the start sets your business on a strong foundation for the future.
You don’t really need to be a genius at maths to successfully manage your business finances; But you do need to be organised and disciplined to keep them updated. Good financial discipline and a basic understanding of finance and bookkeeping will allow you to manage your business and to make informed business decisions to support business sustainability and growth.
If you run a business, at some stage you will almost certainly have to pay taxes. Which taxes you pay to HMRC will depend on the legal status of the business, whether you employ staff, and your level of turnover. It is therefore important to ensure you think about tax planning when you decide which legal structure is right for your business.
Within a business we often have movements in stock levels, debtors, and creditors; and we may purchase equipment; and therefore whilst you might be profitable it does not always equate to cash. Every business needs sufficient working capital to cover its day to day operations.
Cash Flow can be the biggest problem for a new start up business, particularly where credit needs to be extended to customers but will not be allowed by suppliers. It is therefore important that a business is properly financed and cash flow monitored and controlled. Most businesses forecast cash flow for at least the next year, broken down on a monthly basis. Businesses where cash flow is critical will probably need to forecast on a weekly basis.