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Write a plan that's the business!
Page 37
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Index Start with a cover and then a contents page—remember, first impressions count.
Intrix The introduction should state the objective of the business plan and include an executive summary—a brief synopsis of the plan. Indicate the amount of finance required, why it is needed and an outline of the planned repayment period. Try to give the impression that the lender has a special opportunity here.
Background: This should set out in brief form where the company has come from to give an idea of growth experienced to date. Talk about past successes, strategies and core values. (If you have not been in business on your own before, seek advice from your bank.) Management personnek It is important to include details about the management of the company but avoid educational details. The main objective is to illustrate the experience/expertise/ability of management within the business including details of achievements or successful track records of running a business or borrowing and repaying debts on time.
It is usually best to give details in reverse chronological order starting with the present day.
The current business: Give full details of services/products supplied with information on individual volumes/margins. List your main customers and other relevant customer information. Outline your operational costs and major suppliers and list main equipment and trucks in use and how they are financed. Talk briefly about how you staff the business and industrial relations. Talk about the industry in general, current trading environment and relevant information en competitors.
Also include key financial information from recent years. like sales, gross profit and net profit. Provide details of past loans and evidence of them being paid back on time. The future: Provide details of future plans and, where appropriate, Indicate the timescale involved. Describe any changes to the services you provide, and any changes to operating costs including plans for cost savings, use of new suppliers, use of new technology/equipment. You must list any planned staffing changes including redundancy or recruitment plans.
You should also list any potential risks/pitfalls (diesel price rises, for instance) and describe how you will deal with them.
The most important elements of this section are the financial forecasts— presented by means of the balance sheets and the statements of cashflow and income. If these are to be credible, they must be consistent not only with the company's past performance (and the data presented in other sections of the plan), but also with each other in terms of sales, inventories, and sales costs. Finally, you need to consider the likely payback for the investor, ideally shown under various scenarios—best case, expected case, worse case—with figures to back up each scenario.
Financial reporting and IT systems: Brief details should be given of proposed systems to ensure accurate financial reporting and to enable appropriate information to be provided by management to the lender.
Consultants and professional advisors: Details of professional advisors and consultants should be given. If a consultant has notable experience/achievements in the industry, this should be explained in more detail.
kppendlces—detalled financial analysts: Detailed figures to support the above would be shown here, including historical profit and loss accounts of the existing business and forecast profit and loss accounts of the new business (again under various scenarios).
Contacts: Most banks have small business packs with plan ideas. There is also a huge amount of information on the web.
Macintyre Hudson: 01604 624011 or at www.macintyrehudsen.co.uk, Defoitte Touche: www.dttus.com/growth/guidebooks/busplan.htni.