01-16-2009 09:17 AM #1Contributing Member Array
- Join Date
- Nov 2008
The Final Section of a Business Plan
The skills of your team
Your business plan needs to set out your own background and skills and the structure and key skills of both your management team and your staff. It should identify the strengths in your team and your plans to deal with any obvious weaknesses.
If you're looking for external funding, your management team can be a decisive factor. Give relevant details about your teams` skills, background, positions and so on.
If you are looking for a loan or other investment, you need to demonstrate that your management team has the right balance of skills, drive and experience to enable your business to succeed. Key skills include sales, marketing and financial management as well as production, operational and market experience.
Your investors will also want to be convinced that you and your team are fully committed. Therefore it's a good idea to set out how much time and money each person will contribute to the business and the salaries and benefits you plan to draw.
Give details of your workforce in terms of total numbers and by department. Spell out what work you plan to do internally and if you plan to outsource any work. Other useful figures might be sales or profit per employee, average salaries, employee retention rates and productivity.
Your plan should also outline any recruitment or training plans, including time scales and costs.
It's vital to be realistic about the commitment and motivation of your people and spell out any plans to improve or maintain staff morale.
Your business plan also needs to outline your operational capabilities and any planned improvements. There are certain areas you should focus on.
* Do you have any business property?
* What are your long-term commitments to the property?
* Do you own or rent it?
* What are the advantages and disadvantages of your current location?
* Do you need your own production facilities or would it be cheaper to outsource any manufacturing processes?
* If you do have your own facilities, how modern are they?
* What is the capacity compared with existing and forecasted demand?
* Will any investment be needed?
* Have you got established procedures for stock control, management accounts and quality control?
* Can they cope with any proposed expansion?
Information technology (IT)
* IT is a key factor in most businesses, so include your strengths and weaknesses in this area.
* Outline the reliability and the planned development of your systems.
As part of your plan you will need to provide a set of financial projections which translate what you've said about your business into numbers.
You will need to look carefully at:
* how much capital you need if you are seeking external funding
* the security you can offer lenders
* how you plan to repay any borrowings
* sources of revenue and income
You may also want to include your personal finances as part of the plan at this stage.
Your forecasts should run for the next three (or even five) years and their level of sophistication should reflect the sophistication of your business. However, the first 12 months' forecasts should have the most detail associated with them.
Include the assumptions behind your projection with your figures, both in terms of costs and revenues so investors can clearly see the thinking behind the numbers.
What your forecasts should include
Cashflow statements - There are two types of cash flow documents that need comprising on a monthly basis. Your cash balance and monthly cashflow patterns for at least the first 12 to 18 months. The forecast is your estimate of your cash income and expenditure over a period of time: usually twelve monthly forecasts per year. The aim is to show that your business will have enough working capital to survive so make sure you have considered the key factors such as the timing of sales and salaries.
Profit and loss forecast - a statement of the trading position of the business: the level of profit you expect to make, given your projected sales and the costs of providing goods and services and your overheads.
Sales forecast - the amount of money you expect to raise from sales.
Your forecasts should cover a range of scenarios. Be careful not to be too optimistic with your sales figures, they are usually too high for many new busineses.
Alongside your financial forecasts it is good practice to show that you have reviewed the risks your business could be faced with, and that you have looked at contingencies and insurance to cover these. Risks can include:
* competitor action
* commercial issues - sales, prices, deliveries
* operations - IT, technology or production failure
* staff - skills, availability and costs
* acts of God - fire or flood
Presenting your business plan
To make sure your business plan has maximum impact, there are a number of points to observe.
Keep the plan short - no one wants to wade through your version of War and Peace.
Tips for presenting your plan
* a contents page is very handy
* start with the executive summary
* your plan should be legible
* use email-friendly formatting if that the choice of conveying your plan
* ask someone else if it all makes sense
* show the plan to expert advisers - such as your accountant to get their feedback
* an appendix at the back is where market research or balance data should go.
Make sure your plan is realistic. Once you've prepared your plan, use it. If you update it regularly, it will help you keep track of your business' development.
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