Your small business can flourish through business planning, continuous improvement and strategic advice.
Turning a business vision into reality requires entrepreneurs to navigate through a river called planning that is full of twists and turns, with rapids as well as areas of calm-moving water. Before launching a business, most entrepreneurs need to analyse their business idea and their appetite first, asking tough questions such as:
- Are you ready to take on the challenges of being an entrepreneur?
- Do you have the skills needed to run your business successfully?
- Is your business idea viable?
- Is there a market for your services or the products you intend to sell?
- Is it worth investing your time and money into it?
After the analysis, it is time to put your thoughts down into a very important piece of paper called the business plan. Do not dismiss this step because a business plan sets you up for success when you first start, and it goes on to help you adapt as your business grows. Yes, you read that right – a business plan is not just for fresh-faced entrepreneurs who are eager to launch a business, it is also for seasoned small business owners who want to expand and grow. In this article, our small business accountants at Tax Agility put together what we have learned from working with small business owners throughout London over the years into tips that can help you plan for your business.
- What is a business plan and why is it vital to both start-ups and also established businesses looking to grow?
- Business growth planning
- Exit strategy planning
- Business debt planning
- How our small business consultants can help in each of the above situations
Let’s talk about business plan
In our line of work, it is common to meet entrepreneurs who trust their gut feeling more than a business plan. There is nothing wrong with it if you know how to translate your gut feeling into a series of actionable items and manage to assemble a team and sell your vision based on your gut feeling alone. In most cases though, gut feeling isn’t enough and this is where a business plan can help:
- It helps to prioritise – By defining your business objectives, your business plan gives your business direction, maps out strategies to achieve your goals and helps you to manage possible challenges along the way. If you are already in business, use your business plan to recalibrate your objectives and set out plans to adapt to the changing market.
- It gives you control over your business – Your business plan requires you to study the business landscape and know your competitors and other factors that may affect your success. If you are already in business, it is time to take a step back and review because your business plan should evolve based on your experiences – both successes and failures. A good rule of thumb is to review your business plan once in every six months.
- It gets you funding – It is highly common for entrepreneurs to use their personal savings, liquidate their assets or even max out their credit cards to launch a business. But to sustain and grow the business, additional funding may be required and in this instance, your business plan is a tool that will help to convince investors why they should invest in your business. If you would like to know more about funding, “The complete guide to business funding” may make a good read.
What goes into your business plan?
A good business plan typically covers the following points:
- Your business objectives, both short and long-term objectives
- The products or services it will provide
- What is your pricing strategy?
- What is your budget?
- What are your risks?
- Who are your customers?
- How do you reach out to potential customers so they are aware of you and your business?
- Who are your competitors?
- What sets you apart from your competitors? In other words, why should your customers buy from you and not them?
It can further expand to cover:
- If your ideas or products are innovative, how do you protect them?
- How do you keep up with technology?
- At what point can you take on staff?
- What is your exit strategy?
As you can see, you can make it as comprehensive as possible. The most important lesson here is not to write it and put it aside because you are busy managing the day-to-day. Use it, review it, improve it – because your business plan will empower you to think, plan and stay ahead of the game.
Let’s plan for your future together
It is worth noting that having a robust business plan is one of the many steps required to launch or to improve a business if you have already set-up your company. Other types of knowledge needed to make your business successful include cash flow, compliances, debt, gross profit margin, net profit margin, to name but a few. As not everyone is an accounting expert who understands numbers and how they can affect your business, it is time to reign in small business consultants like us who can help you do number crunching and maximise your business success.
We do this by:
- Understanding your business and your objectives
- Focusing on your interests
- Analysing your numbers
- Reviewing the key trends in your business
- Forming tailored solutions for your needs
- Offering cost-effective services
- Providing honest and expert advice
At the end of the day, our small business consultants produce:
- Annual business plans, forecasts, and projections
- Management accounting complete with regular overview information
- Review of credit control and cash flow
- Attend important business meetings
- Strategic plans for business acquisitions and disposals
- Advice pertaining to capital structure and business valuations
If you would like to know how we can assist, give us a call on 020 8108 0090 today. In the next section, we will discuss specific planning pertaining to common issues faced by many small business owners today:
- Business growth
- Exit strategy
- Debt reduction
Business growth planning
Businesses exist to make money and grow either organically or inorganically.
Organic growth refers to utilising your current business structure to increase output and boost sales, thereby driving growth. The process takes time and effort, but it is sustainable, less risky, and most importantly, it adds value to your company.
On the other hand, inorganic growth means you gain instant market share and revenues boost by acquiring or merging with another company. While it is risky, the benefits of having a larger market share are indeed attractive.
Most small business owners prefer to grow organically but some prefer the acquisition route, particular those in the high-tech industry. The thing is, there isn’t a standard business growth recipe that can be applied systematically to every business. Growing your company relies on your business model, your general management, and above all, your financial numbers. If you are planning to grow your business this year, either organically or through acquisition, contact one of our small business consultants and we would be happy to review your numbers and help you formulate a realistic growth plan.
Exit strategy planning
At some point you may be thinking of selling your business to a third party or finding an internal succession, and this process of withdrawing yourself from the business you have created should ideally be a smooth transition.
As small business accountants in London, we often hear from various business owners about their plan to sell up and in most instances, turning this concept into reality requires thoughtful planning. For instance:
- How fast do you want to sell?
- What is the valuation process?
- Should you restructure the business to optimise the sale value?
- How to ensure that all relevant tax issues are managed?
- What is the due diligence process?
- How to identify and evaluate potential buyers?
- How to create a competitive bidding environment?
- How to negotiate?
- What are the strategies you can use to maximise the sale of the business?
The list goes on and touches on various elements, from addressing accounting and tax queries to a mountain of documents that spell out everything from confidentiality to terms of sale. If your plan is to exit the business, contact our small business consultants at Tax Agility today so we can help to kick-start the process and set the strategy in motion.
Business debt planning
Assuming you are in control of your cash flow, chances are, you should not need to borrow. Cash flow is really one of the biggest issues for small business owners and many people do not understand why they are suddenly short of cash when everything seems well. This is where our small business consultants can help – we are here to analyse your numbers and provide cash flow forecasts, as well as helping you to plan for multiple scenarios that will have an impact on your business.
In the event that your business is short of cash and you need to borrow, then these tips may be helpful to you:
- Know your ability to pay it back before you borrow
- Have a sensible repairmen plan, this will allow you to pay back the money and still have money to fund the operation
- Know when you can be debt free
- Plan how you can create extra income to pay off debt
- Review how you can cut expenses and save, as a pound saved is a pound earned
Cash flow is a subject that many small business owners find it fascinating and if you are interested to know more, this post “Five ways to improve your company’s cash flow” highlights practical steps you can use to control your cash flow.
Tax Agility is your trusted small business consultants
Every business owner needs some forms of help – it can be someone helping you to figure out what’s next, someone providing a valuable second opinion, someone introducing new clients to you, and someone working with you to improve profitability.
At Tax Agility, our dedicated small business consultants work cohesively with you to help build your business and take it to the next level. We use numbers and data to recommend changes, mitigate risk and improve profitability.
Give our small business consultants a call on 020 8108 0090 today because your business deserves the best opportunity to succeed.
If you liked this post, you might also like:
- The complete guide to buying a small business
- Five ideas for distributing a cash surplus
- Small business: 5 ways to get new customers
This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.