#GDP grew by 0.6% in Q2 2013, with all main sectors of the economy experiencing growth http://t.co/32NXw0vTr3
— ONS (@statisticsONS) July 25, 2013
Brealey Foster Chartered Accountants Hinckley. Here we blog money matters we find interesting. Find us at Edwards centre, The Horsefair, Hinckley, Leicestershire T: 01455 612000 e:brealeyfoster@gmail.com
Thursday 25 July 2013
At last!
Friday 19 July 2013
Business Planning
Business Planning
A fundamental part
of a successful business is a thorough and detailed plan. They are especially
important for start-ups as they offer the owners an opportunity to properly
structure their vision and analyse all the various aspects of running a
thriving business.
When starting up a business, the owners will
certainly at some stage encounter a bank manager when asking for a loan, or
when building up a long term relationship with a supplier or customer. This is
when a business plan will be invaluable as it helps to convey your business
strategy and sell your ideas to those that need to be convinced. Business Plans
are not only necessary for start-ups. Already functioning companies will also
benefit from a constantly updated plan as no aspect of running a business is
ever completely fixed, adjustments will have to be made to adapt to changes in
the environment. Constant evolving is what encourages businesses to grow.
Components of a Business Plan
1. Executive Summary
The first part of the plan should be the executive summary.
This is often described as the most important part of the plan as this is where
the business overview is judged.
Details about the idea of the business, as well as its background and ownership
structure should be included here, with particular emphasis on what experiences
you already have in this industry and competences that will help you to
achieve.
Clear Business objectives and a Vision statement are also needed to
sell why you will be a success. Specifics on why your products/services will be
popular in the location you are wishing to set up in, will back up the
objectives for the short term, medium term and long term. Describing how you
will promote your business through advertising and an online presence will also
go far to show that the company will be competitive and will complement the business development strategy. Having an opportunity in the market is needed
to prove that you can compete and meet the objectives you have set.
2. Financial Summary
Along with the
objectives, it is necessary to create short, medium and long term forecasts of
sales and cash flow. This needs to be supported by reasons for an increase in
sales, such as advertising or gradually increasing the amount of customers, who
were previously using a competitor. Attention to detail cannot be understated
here, as assumptions made are not sufficient, they need to be supported by some
form of evidence (see Market Research further down the page). If there is
projected growth, how and why is it going to grow? Funding requirements and
expected returns are also needed especially if convincing others to invest or
provide finance.
Reports in graph form
are needed to visualise the figures that are being suggested. These can be put
in the appendix or in the financial summary. The reports, showing data for the
next three years are:
-
Projected
Cash Flow
-
Projected
Profit and Loss
-
Projected
Balance Sheet
3. SWOT Analysis
Standing for Strengths, Weaknesses, Opportunities and
Threats, SWOT Analysis is a very
useful way to highlight strengths of the individuals in the business and the
business itself, as well as opportunities, such as a growing market, which can
be exploited to maximise the potential of the business.
The analysis can
also determine weaknesses which need to be addressed and can help with dealing
with unexpected issues in the future. When analysing threats it is important to
understand the competition to your company, and so to create an individuality
which help to put you ahead of your rivals, while improving anything needed so
to not be seen as inferior to the others. Knowing about their strengths and
weaknesses will act as a guide to direct you. Comparing sales and marketing
will also show what customers look for in that product.
4. Market Analysis
Market Analysis will complement what has
been written in the executive and financial summaries. Research must be
completed in order to do this, such as analysing the population of the local
area and the location in which your business will actually be. Research into
the industry and trends your business will be part of is advisable to support
reasons for why growth will occur. Analysis of competing products will also
help in the SWOT Analysis.
5. Exit Strategy
All companies need an
exit strategy in order to benefit the best interest of the company and the
individuals that run it. Often a Best
case strategy and a Worse case
strategy are used in business plans, so to be thorough in detail. A worse
case strategy could often mean ceasing after a year if profits are not close to
as projected, this would keep costs to a minimum. A best case strategy could
involve stepping back to give an experienced managing director the opportunity
to expand the business further, if you have taken it as far as you believe you
can.
6. List of Costs when
starting up
For business
start-ups it is important to include all direct
costs, overheads, fixed assets, loans and grants when producing a list of
the total costs for the initial start of the business. This can be compared
with any capital you already have and any investments you have already made.
This section is particularly necessary when applying for a loan.
Thursday 18 July 2013
Crowd Funding for starting and exiting a business
Crowd Funding
Crowd funding is one
of the methods for businesses to raise finances in order to grow. It is a
non-bank lending system which means that companies can seek investment without
having to go through the time consuming procedures needed in order to
successfully receive a loan from the bank, and therefore avoid the attributed
costs of the banks services.
Instead, the company
can create an account with one of the many Crowd Funding companies online and
seek loans from individuals who offer their money up, with a set rate of
interest attached. It is done through a marketplace, with live auctions
constantly occurring. From this the business can pick the most desirable offers
to accept.
The individual
investors can choose from a large variety of companies on each website so if
they choose a specific company it is because they find it appealing to them, or
because they think it will be successful.
There are different
reasons for people raising money on the websites, whether it is to increase
finances into the company or to request for donations to charities and
non-profit organisations. Various models are also typical on these websites, in
order to encourage people to offer their money. These are:
-
Reward
Based – This is where an investor receives a form of reward for their
money. It can often be a product that is sold by the company.
-
Loan
Based – When an investor gets a return on the money put up, with varying
amounts of interest.
-
Equity
Based – When an investor expects to get the return on investment, as well
as receiving rewards or intangible benefits.
This industry is
supported by the UK Crowd Funding
Association (UKCFA), which was formed by leaders of companies in this
sector who wanted to act in the interest of all parties involved. They created
a code of conduct in order to regulate the industry better.
Funding Circle
An example of an
online company which provides an online marketplace for crowd funding, it is a
British company which was launched in 2010. As of today (16/07/13),
£125,386,760 has already been lent to businesses through this site, with just
fewer than 50,000 individuals in the U.K. who lend. Like other crowd
funding websites, it is supported and endorsed by Government, local councils
and universities.
The businesses
registered can set the amount they wish to borrow (between £5000 and
£1,000,000) as well as the length of time they wish to pay over. Funding circle
suggests that 77% of the businesses which use their website for funding would
sooner return to them for further finance before seeking out help from the
bank. Investors are on average, set to receive an average net return of 5.8%.
Benefits for
businesses using Crowd Funding
-
It is a fast way to receive finance. And cheaper
than a bank.
-
Allows the owner to maintain control of the
company, without having to give out shares.
-
Businesses have a choice in offers and can
accept the lowest interest rates, getting the best deal for them, at a price
which is acceptable to the investor.
-
It can benefit businesses of all sizes. UKCFA
described the industry as “democratic
finance”. SME’s will find it much easier gain finance using crowd funding
than going to a bank.
-
It is a great way to make contacts, if you link
your project with social media, the investors can become supporters, and then
in turn become customers. It can help increase the profile of the company and
the exposure it gets in the media.
-
You get immediate feedback on your business.
Investment suggests that people believe in your ideas, but the website can also
offer inspiration of how to improve the business, and how it appears online.
-
Allows you to keep in touch with supporters of
your cause. Investors can be contacted and thanked, which would improve the
relationship with a loyal fan base.
Opposing View
Useful websites
Thursday 11 July 2013
Thursday 4 July 2013
BrealeyFoster.co.uk
Welcome to Brealey Foster, Chartered Accountants, Edwards Centre, the Horsefair, Hinckley, Leicestershire LE10 0AN
T: 01455 612000 F: 01455 613000 FIND US
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Contact
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We serve 250 businesses with accounting and financial services and sound business advice
from our Hinckley Office meeting clients in London and Hinckley
In the UK there are 4.5million small and medium sized businesses that account for 99% of all enterprise.
employ 14 million people and together earn a turnover of £1.5trillion. Big ideas are important but so are the little incremental changes made in our businesses by employees. How do you instill an entrepreneural culture in your business whether public or private sector and make employees feel as passionate about what you are doing as you are?
kind regards
 |
| Speaking up for local business |
Ian Brealey BSc FCA
Principal
All clients have my mobile 07747 867899
We are always happy to talk to startup businesses. Phone for a free appointment to discuss your business plan or how to set up your records.
Team Brealey Foster 2013
Contact usT: 01455 615466
Edwards Centre, The Horsefair
Hinckley, Leicestershire LE10 0AN
Secretaries
jj.brealeyfoster@btinternet.com
Self Assessment
rw.brealeyfoster@btinternet.com
Accounts preparation
pw.brealeyfoster@btinternet.com
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