A business plan helps business owners to focus on the necessary steps to implement their business ideas. It can also be used to identify short and long-term business objectives and how the business will be able to achieve these.
What to do before writing your business plan
Before you start your business plan you need to consider who the reader is and what purpose you want it to have. Many business owners use their business plan to pitch to potential lenders and raise money for their business. If this is your intention for your business plan at some point, then you need to make sure that there is a strong financial plan and clear goals outlined in the plan. This is so that lenders can assess the profitability and risk of their potential investment in your business.
If you need help with your financial planning as part of your business plan, you can book a no-obligation meeting with one of our financial advisers online or by calling 0117 973 0500.
Other benefits of having a business plan in place
Even if you are not looking to use your business plan to obtain funding, there are still many benefits to having a business plan in place.
If you are looking to take on additional business partners, then your business plan will clarify to them what you are looking to achieve and how you will achieve it.
A business plan will enable you to make big decisions with confidence, for example, you can use the cash flow forecast to determine the best time to hire new staff and invest in new equipment as you can clearly see when you will have money available.
Clarify your business aims and objectives
A business plan is a good place to record both your short and long term business objectives. It is important to understand that these could change over time but having it in writing will make it clear what you are trying to achieve and how.
Stay on track
A business plan can provide direction for your business and help you to stay on track. It can help you to identify next steps and actions that need to be taken.
Using a business plan to manage your business finances
A business plan typically includes three financial statements, these are the cash flow statement, balance sheet and income statement.
A cash flow statement shows money coming into the business, usually from investments or sales. It also shows all the money going out for wages, inventory and equipment.
Reviewing your cash flow statement regularly will help you to identify potential challenges to your cash flow early. This will give you time to address the issues and make sure that your business can pay all of its bills.
The cash flow statement will be able to work out how much profit is remaining in a business after all the expenses are paid. Most investors like to see a 2-year profit forecast when they are looking to decide whether to invest in your business.
Get financial advice to help with your business plan and finances
If you would like help with managing your business finances or if you want to make sure that your business is utilising all of the tax relief and allowances that it is entitled to, a financial adviser at Four Wealth Management can help you. Book in a no-obligation meeting today or phone 0117 973 0500.
The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is dependent on individual circumstances.
