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BG003 The Business Plan

Taxco Business Guide


Starting a Business

Objective

The objective of this business guide is to give an overview of the business plan, some thought process and considerations in the compilation thereof and to explain how Taxco can assist with the Business Plan.

Introduction

Every business should have a business plan. It is key to the success in starting a business and a good management tool to guide and keep management focused on business objectives. If you need finance, a bank manager will only lend money if your business has a sensible plan. Your plan should provide a thorough examination of the way in which the business will commence and develop. It should describe the business, product or service, market, mode of operation, capital requirements and projected financial results. It is truly the key to success.

Why a Business Plan?

Preparing a business plan will help you to set clear objectives for your business and clarify your thinking. It will also help to set targets for future performance and monitor finances and profitability. It should help to provide early warning for when you might need to reconsider the plan.

Always bear in mind that anyone reading the plan will need to understand the essentials of your business quickly and easily.

What is in a Business Plan?

The business plan should cover the following areas.

Overview

An overview of your plans for the business and how you propose to put them into action. This is the section most likely to be read by people unfamiliar with your business so try to avoid technical jargon.

Description

A description of the business, your objectives for it and how you plan to achieve them. Include details of the background to your business for example, how the idea started, how long you have been developing the business idea and the work you have carried out to date, including contracts that have been negotiated or signed.

Contact details

All your contact, identity and residency details.

Business entity

The type of entity chosen and the reasons therefore. Include any  “Association” agreements, if any.

Personnel

Details of the qualifications and experience you possess and your key personnel and any external consultants. You should highlight the skills and expertise that these people have and outline how you intend to deal with any weaknesses. Discuss the recruitment of staff and training.

Location

Describe the proposed site/location and include any plans of the factory or offices, the equipment requirements, any special attributes and the reason why you have chosen the site. Include lease contracts.

Product and pricing

Details of your product or service and your unique selling point. This is exactly what its name suggests, something that the competition does not offer. You should also outline your pricing policy, mark-ups and discounts.

Marketing

Details of your target markets and your marketing plan. This may form the basis for a separate, more detailed, plan. You should also include an overview of your competitors and your likely market share together with details of the potential for growth. This is usually a very important part of the plan as it gives a good indication of the likely chance of success.

Practices

You will need to include information on your proposed operating practices, e.g. the method  of sales on cash or credit, and the terms thereof and production overview, purchasing, stockholding, order and delivery periods and how you will conform with legislation applicable on the business.

Financial forecasts

The plan should include at least a annual overview of your projected financial performance and the assumptions made in your projections. This part of the plan converts what you have already said about the business into numbers. It will include a monthly or annual cash flow forecast which shows how much money you expect to flow in and out of the business as well as profit and loss predictions and a balance sheet. Detailed financial forecasts will normally be included as an appendix to the plan. As financial advisers we are particularly well placed to help with this part of the plan, including details of the tax benefits and special deductions available for the venture.

Financial requirements

The cash flow forecast referred to above will show how much finance your business needs. The plan should state how much finance you want and in what form. In many cases a combination of bonds, loans, leases and hire purchase agreements are utilised. You should also say what the finance will be used for and show that you will have the resources to make the necessary repayments. You may also give details of any security you can offer to financiers, including equipment and debtors.

Template for a business plan

1. Title sheet

2. Contents page

The business plan has a clear table of contents so that readers can see at a glance what you have included in the plan. The table of contents also makes it easier for readers to find specific sections or information.

3. Executive summar

The executive summary is concise and contains the pertinent information you have addressed in the body of the business plan.

4. Business objectives

5. Business concept

6. The market

7. Infrastructure

8. Suppliers

9. Marketing

10. Business pre-opening checklist

11. Financial considerations

12. Appendices       

Appendices include the following:

* Curriculum vitae of each key manager 
* Pictures of products 
* Professional references 
* Marketing studies 
* Relevant published information 
* Magazines 
* References to books 
* Patents 
* Significant contracts 
* Leases 
* Sales contracts 
* Purchase contracts 
* Partnership/Ownership agreements 
* Share-option agreements 
* Employment/Compensation agreements 
* Insurance 
* Franchise agreement 
* Copy of first page of ID document 
* Marriage certificate, final decree of divorce order or ante nuptial contracts 
* Quotations for equipment to be financed 
* Audited financial statements 
* Monthly management accounts 
* Offer to Purchase or Agreement of Sale 
* Founding statement and amendments if a close corporation 
* Memorandum and articles of association, shareholders agreement, company resolutions if a company 
* Life assurance policy or policies 
* Any other relevant information 

Updated Business Plan

Putting together a business plan is often seen as a once-off exercise undertaken when a new business is starting up. However the plan should be updated on a regular basis. It can then be used as a tool against which performance can be monitored and measured as part of the corporate planning process. There is much merit in this as used properly it keeps the business focused on objectives and inspires a discipline to achieve them.

How can Taxco help?

Taxco looks forward with you to help you put together your best possible plan for the future.

Taxco  has many tears of corporate and consulting experience who can help you develop a clear, concise and compelling business plan. We have strong commercial acumen and a deep understanding of functioning of businesses and the market. Additionally we have strong expertise in financial modelling, cash flow forecasting and valuations. Our business plans are:

• Structured for banks and financing institutions
• Professional, Personalised
• Comprehensive and
• Affordable

For more details, Contact Us now to discuss how we can assist you to design, compile, update, review and assess your Business Plan.

This Guide is subject to the Terms and Conditions of Use of Taxco Services and their Website.

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