In this post we discuss the role of a financial adviser in creating a business plan. This is a must read for anyone considering starting a business.
The whole point of a business plan is to present your proposed business in the most attractive light to whoever reads it. Good financial advice is therefore vital, since you do not want to give anyone a reason to dismiss it out of hand.
What Is a Business Plan?
A business plan is a vital document that sets out the scope of your proposed business, how you intend to approach key areas of its operation and, arguably most importantly, information about its profitability over time. For this reason, consultation with a financial adviser is critical, since you will need to consider various eventualities concerning your business, your assets and the effects of success or failure on you personally.
The components of a business plan
There are several sections you should include in your business plan. You need to describe the opportunity that you hope your business will be able to profit from. You will need to list the facilities you need to achieve this – buildings and services, equipment such as computers, machinery and so on. You need to think about your marketing, and the problems posed by competitors already operating in this area. And, of course, you need to think about what each of these things means in terms of money. This is where financial advice becomes so important.
Financial advice for budget and projections
If you need some guidance on the contents of your business plan, you can find plenty of help online (the government’s Business Link website has templates to download, as well as other information – see http://www.businesslink.gov.uk). The section of your plan that relates to money should be approached particularly carefully, since this is the part which investors will scrutinise most thoroughly. If your business requires any level of funding then you should speak to an accountant or financial adviser to discuss what this could mean for you.
The section dealing with projections has great significance when it comes to accessing funds to get your business off the ground, usually requiring some degree of financial advice. It has to be as detailed and accurate as possible – whilst, at the same time, remaining as succinct as you can make it. You need to think about the investment you will have to make to start the business, early profit/loss forecasts, and a risk assessment that addresses the implications of various circumstances (unforeseen competition, supply problems, market changes) that could undermine your odds of success. If you need to take out a loan to satisfy your capital requirements, your financial adviser will be able to discuss collateral with you, as well as advising you on how you will be able to pay it back.
The probability of you securing funding from one source or another relies heavily on the ability of this section to convince potential investors. This is why financial advice should be sought: this part of your business plan has to be watertight if you are going to convince others to part with their money.
The executive summary
The executive summary, which will introduce the business plan, is the most key section. Its purpose is to give an overview of everything else in the document, in order to provide an at-a-glance version for potential backers and other interested parties to access quickly. This is the part you need to spend most time over, since it is all that many people will read. It has to be as concise as you can make it, but also as informative as possible. The summary should include the figures that you arrived at with your financial adviser, since these will be of most interest to investors. Make sure that your business plan as a whole, but particularly the summary, are well-crafted and thoroughly checked for spelling and grammatical errors and are properly laid out. Clear headings and a sensible font size are key: you want this document to be as easy to read as possible, and to ensure that deficiencies of presentation do not put people off the substance of what’s inside.