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


starting a business
exiting a business

T:01455 612000

What is 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, 4 July 2013

Welcome to Brealey Foster, Chartered Accountants,

Edwards Centre, the Horsefair, Hinckley, Leicestershire LE10 0AN
T: 01455 612000  F: 01455 613000 FIND US
Resources and download
Self Assessment:
Tax preparation:

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
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 us

T: 01455 615466
Edwards Centre, The Horsefair
Hinckley, Leicestershire LE10 0AN

Self Assessment
Accounts preparation