What is a Business Plan?
A Business Plan is a document which states what you plan to do and how. Typically associated with start-ups a business plan is used by an entrepreneur looking for funds to help get a new business started perhaps by getting financial support from a bank. However they are also used by established businesses who may also be looking to secure new funds or attract investors in order to expand or develop a new product.
A Business Plan can be quite a lengthy document although there is no set layout or content requirement as this is usually determined by the purpose of the plan and the intended audience. Generally a Business Plan will include some or all of the following components:
- Description of the Business and Products and Services
- Competitors Analysis
- Design and Development
- Market Research
- Marketing Plans
- Operations and Management Details
- Borrowing Requirements
Budgeting and Projections
A budget is a projection of income and expenditure for a set period of time and is usually a key part of a Business Plan and accompanied by a Cash Flow Forecast. Normally prepared in advance of a new financial year a budget is a target and management tool for the coming year. We believe that all businesses should have a budget as it helps them set targets for the coming year and then manage performance and identify potential future investment requirements.
In conjunction with management accounts business owners and directors can compare actual results against budget and spot any problems early and take corrective action.
Cash Flow is the movement of cash into and out of a business. A Cash Flow Projection or Cash Flow Forecast details the flow of cash in and out of the business based on the Budget and enables it to plan its future cash requirements.
You may have heard saying such as “Cash is King” and “Cash is the lifeblood of business.” Both are very true and this is the reason why The Financial Management Centre recommends every business produces a Budget and Cash Flow Forecast. As we will get to know you and have a thorough understanding of your business we will be well placed to help you create and then monitor an accurate budget and cash flow projection.