Preparation of the Business Plan

8/9/2019 Preparation of the Business Plan

1/31

1

Part 1


2/31

Health Audit

q Is your health good?

q Will it allow you to work for long hours, oftenunder stress?

q Poor health can prevent you from carrying out

the duties which are essential to the running

of a business

2


3/31

Time Audit

Do you have any commitments which are

time consuming such as:

q Aged parents

q Children

q Disabled relatives

q Other employment

3


4/31

Personal Finance Audit 1

Examine the following in detail:

q Your current assets

q Your current debts

q Current debts of dependents

q Your regular annual income (if any)

4


5/31


Examine the following in detail:

q Cash in bank

q Your regular financial obligations

q Other financial commitments which are

irregular

5


6/31


q Are you prepared to offer your house as

security for a bank loan?q Have you investigated the different financial

organizations which are likely to provide youwith financial backing

q

Which government sponsored organizations inyour region provide start up capital for newbusinesses?

6


7/31

Things to note

When used as a proposal for starting a new

business, the business plan is essentially astatement of your intentions

It should focus on your professionalknowledge and skills

It is essential to impress your target audience Presentation will create the first impression of

your professional competence

7


8/31

Things to note

Business plans take a lot of effort to research

and prepare They also contain a lot of confidential

information, so be careful to whom you showthem

Only show them to those people who aregoing to assist you. Operate on the Need toKnow Basis

8


9/31

Things to note

Lack of confidence is one of the main

obstacles that young designers have toovercome when setting out in business

Many competent people shy off because theydo not believe that they are capable ofsucceeding in business

An optimistic attitude is essential to succeedin business. It will help you through times ofadversity

9


10/31

Factors to beware of related to premises (a)

Long leases. Your circumstances could change overtime. You could find yourself liable for the total sum ofthe lease for the agreed period, if you wanted to vacate

your premises Frequent rent review clauses. If these are too frequent,

the landlord/landlady will have many opportunities toincrease your rent and you will have to comply

Break clauses. Be sure you understand the conditions

under which you can vacate or be vacated from yourpremises

10


11/31

Factors to beware of related to

premises (b)

Fully insured and repairing leases. Be sure youunderstand the conditions under which youlease. If in doubt, consult your solicitor. Be sureyou understand what you are signing. If indoubt, ask your solicitor

Remember, there is no such thing as astandard contract. Everything is negotiable, soif you think you can get a better deal thatinitially offered, try bargaining

11


12/31

Helpful things, which cost nothing

when making decisions about

premises

Obtain a free report detailing crime rates foreach building you have short listed

Obtain as much grant funding as possiblefrom United Kingdom and European Unionsources to help offset your initial costs

12


13/31

1. Title Page

Presentation must be of high quality

Provides the potential investor with a firstimpression of the design competence of thecreator of the plan

Financial investors tend to regard designers

who submit shoddy business plans as peoplelikely to have a shoddy attitude towardscustomers

13


14/31

2. Table of Contents

Must be included in a business plan

Should provide a clear indication of thelocation of each of the components that make

up the plan

Pages must be numbered to correspond to the

table of contents

14


15/31

3. Introduction

A paragraph or two stating why you intend

starting up in business

Also, it should briefly outline your plans for the

business in the immediate future

15


16/31

4. Name of Proposed Business What are you going to call your business?

Be sure not to use a name that is already

being used in your intended trading area Check the names of the local design

companies in the yellow pages

When registering your company in real life, apatent attorney or a solicitor would have asearch made to ensure that the name youintended using was not already in use

16


17/31

5. Kind of Design Service You IntendOffering

A brief description of the kind of design service you

intend to make available in the marketplace

Make sure there is sufficient demand for this

service/product

You should have a clear idea of the potential

market for your service/product in your intended

trading area

Also, you must have a good knowledge of your

direct and indirect competitors

17


18/31

18

Part 2


19/31

6. Direct and Indirect Competition Direct competitors are those who specialise in

providing a service or product in your intended

market, which is equivalent or similar to what youintend offering

Indirect competitors are those who offer suchservices or products as side lines in your intended

market

19


20/31

7. Premises

Type of premises you intend using for your proposed

business

Size, location and proximity to your intended market Rent or leasing costs, rates and any other

associated costs such as electricity, cleaning, etc

20


21/31

8. Furniture and Basic Equipment

Basic equipment you will need

Dont go for the cheapest, buy the best you

can afford

Go for quality that will last, provide comfort

and create the right impression with clients

21


22/31

9. Computer Equipment

What computer and ancillary equipment will

you need to compete effectively? It must incorporate industry standard software

Provide reasons for your choices in your plan

List the equipment and software and

summarize the cost Cost of additional training on equipment or

software?

22


23/31

10. Internet Charges

Costs associated with

Purchasing a domain name (www.etc) Creating a company website

Extending the website to offer the chance forpotential customers to buy online

Using suppliers websites to procure online

23
http://www.etc/http://www.etc/


24/31

11. Transport

What type of transport do you intend using?

Weigh up the advantages and disadvantagesof each alternative

Work out a mileage charge

Dont forget to charge for your time travelling

at your hourly cost rate

24


25/31

12. Insurance Costs (a)

q Employers liability insurance, if you are going to

employ peopleq Public liability insuranceq Product liability insuranceq Professional indemnity insuranceq Vehicle insuranceq Premises insurance

25


26/31

13. Insurance Costs (b)q Stock, fixtures and fittings

q Plant and machinery insurance if the business willhave plant and machinery

q Employment protection insurance (disputes withemployees)

q Consequential loss insurance (losses in revenue dueto fires, accidents, etc.)

q Personal health and life insurance

26


27/31

14. Hourly Cost Rate

Calculate the basic unit for charging design

jobs and preparing estimates for inclusion inquotations

Incorporate direct and indirect overheads,direct and indirect expenses and direct andindirect materials

Hourly cost rates should be reviewed every sixmonths, or at the longest, each year

27


28/31

15. Summary of Costs

Include all costs incurred in the running of

your business

This is the summary of the totals of all of the

sections

28


29/31

16. Startup Capital

How much capital do you intend investing in

your proposed business venture? How much do you intend borrowing?

Dont forget to include some reserve capital

to carry you over the flat spots in the first two

years of trading. This will enable you to gain

a foothold in the marketplace

29


30/31

17. Breakeven Point (a)

This is the point reached when a business is

doing enough trading to just cover itsoverheads. It is neither making nor losing

money

After this, the businesses could either

become profitable or become lossaccumulating

30


31/31

18. Breakeven Point (b)

The simplest way to estimate a breakeven

point is to plot total costs over a twenty fourmonth period, against total income over the

same period

The vertical to the x-axis from the

intersection of the two plotted lines willprovide the breakeven point

Preparation of the Business Plan

Documents

Transcript of Preparation of the Business Plan