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Business Plans for SME Start-ups

If you’re considering starting a new business in 2017 then you probably have quite3 a lot on your mind right now.  Starting a small business is not easy and not for everyone but, here in the UK, we’re a nation of small business owners.  The definition of an SME (small and medium sized enterprise) is any business with fewer than 250 emp0loyees, as opposed to micro businesses which have fewer than 10 employees.  Did you know that in 2014 more than 99% of all UK businesses were SMEs?  This means that the UK economy is heavily dependent upon these small businesses, they are the backbone of UK trading.  If you’d like to do your bit for Britain (and yourself and your family) by starting up a business, then you’re going to need a business plan.

Basically, a business plan is a document that describes what your business does and how it sees its future.  Business plans have three different sections:

·         Business concept

·         Marketplace

·         Financial

Any new business owner will need a business plan to map the progress to profitability.  You’ll need some sales forecasts with detailed information on how you intend to find and attract your customers/clients.  Then you’ll need to list your resources (money, equipment, and people) which will be needed to achieve your sales forecast with a realistic timescale for each significant milestone along the way.  All this information will be combined in order to prepare your financial forecasts (cash flow forecast, profit and loss account, balance sheet) and the business plan will then provide you with the data you need to monitor the performance of your business right from the word Go.

Once you’ve opened your business your first business plan will be useful when preparing annual budgets and updating financial forecasts for the year ahead.  If you need to raise finance, then you may be looking for a loan.  Finance providers will need you to provide information to support your loan application – this will include financial forecasts, historic annual accounts and management accounts.  Your business plan should include a vision of your business’s future growth, why the finance is required and how you intend to pay it back. 

 

As a company owner, your business plan will give you an overall view of the road ahead for your business which enables you to put the day to day management into a long term context.  The skills you learn and the insights you gain from preparing your business plan will help you with growing your business in the future, especially if you need to raise finance at some point.  A steady cash flow is a key element in running a business without falling into debt and becoming bankrupt.  The skills you learn will also help you if you need to deal with non-payments from creditors too.  At some point in the future you may feel that you’d like to sell the business as a successful going concern, so keeping your business plans and finances healthy are essential right from the start.