Writing up a Business Plan - Is it really needed?

[Chris Ashdown]

Is all that blubber to hide the fact you just don’t know what you are talking about yet pertain to be an accountancy company

Having lost a company in the last real recession in the early eighty's due to Cash flow, I do understand the subject quite well and with that company which was over five years old and started by myself, we had increasing sales every month and the largest sales ever the month we stopped trading as other companies who had accounts with us went under and forced us under

I did learn by my mistake and the present company I own has no borrowing and accounts limited to strictly 30 days and in very limited numbers, this company has run very well since 2003

 

[Tax-UK]

Dear Chris,

I understand your point, which is based on your personal experience, but there is a big difference between a growing company and a startup who most of the times does not have any money to worry about cashflow projections.

In our experience when dealing with new businesses it is pointless to insist or even speak about cashflow, P&L's etc. because:

a) The majority find those terms quite technical and don't understand them.
b) They do not have the resources to keep financial statements updated on a monthly or even quarterly basis.
c) They couldn't care less about these things, preferring to concentrate on sales.

What we realised is that very easily startups compromise on their margins to gain new business and end up being slaves of their own businesses, making less money than someone working on a desk job. We have seen situations where while the business was receiving money on a regular basis, the margins equated to £80 a day before staff wages.

There is also a lot of pressure to reduce margins by the manufacturers in order to sell their products, also because of competition. These days retail businesses are advised to use mark-ups of 2.3 or less. Of course when you factor vat, rents & rates of almost half of your sales and staff wages you can see how so many businesses close their doors after a couple of years of trading (struggling would be a better word).

When we advise a client to concentrate on the margins, it is the right advice to give a startup, knowing that as the business develops they will have different needs. Of course there is a lot of advise we can give but to keep things practical we tell them to concentrate on margins and cost control (i.e. it is not ok for your landlord to increase the rent every year).

Regarding your business I am sorry to hear about the previous company, but if you allow this accountant to blubber a bit longer you may want to consider using proformas (very common these days) or at least 50% upfront payment. established clients will always take more than 30 days to pay, especially when they get into cashflow difficulties, which would defeat your strict 30 days policy.

Best of luck on your trade

Is all that blubber to hide the fact you just don’t know what you are talking about yet pertain to be an accountancy company

Having lost a company in the last real recession in the early eighty's due to Cash flow, I do understand the subject quite well and with that company which was over five years old and started by myself, we had increasing sales every month and the largest sales ever the month we stopped trading as other companies who had accounts with us went under and forced us under

I did learn by my mistake and the present company I own has no borrowing and accounts limited to strictly 30 days and in very limited numbers, this company has run very well since 2003

 

[Chris Ashdown]

Whilst I understand your simplistic approach to new start-ups I feel you are wrong in that anyone who contemplates starting a business must be aware of most causes of failure so they can avoid them, which is why all government advisers all banks and most accountants would suggest the start-ups undertake a full business plan including a cash flow forecast to try and avoid failure, but enough said

Regarding myself, we are mainly a card based company with over 97% of orders paid by card prior to dispatch, the remaining account customers are companies like schools, doctors, and government departments including Buckingham Palace, which are all pretty safe bets and if they do go over the 60 day in-house limit we close down their account facility, we have a tough attitude to credit and have lost only £36.94 since 2003 in non recovered debt, so think we do know what we are talking about.

 

[Tax-UK]

You are clearly an arrogant man, who is only interest in boasting your ego (I keep thinking about the mirror next to your PC).

I did not ask about your business and couldn't care less, but I did notice that you took great care in boasting about certain clients as if that was a guarantee of success. Like I said you just interested in impressing even if it is coated with bull**t ,

You come across as a nervous man who after losing everything (blame it on the recession, shall we?) cannot make a decision without asking permission to others.

With accountants, bankers and government advisers, everybody knows, except yourself and your books, that they are mostly interested in selling their products. The majority are not business people do not have business experience and hide behind people's perceptions in order to flog their products, that is why fools like you run out of money.

You keep insisting on doing things even if they are not always practical, which is a sign of a man that is afraid of his own shadow. Maybe that is the reason why you failed first time.

I was trying to build bridges, but I now recognise that you are just a sad and petty man that probably spends his evenings alone, talking to himself thinking that he has great company.

Whilst I understand your simplistic approach to new start-ups I feel you are wrong in that anyone who contemplates starting a business must be aware of most causes of failure so they can avoid them, which is why all government advisers all banks and most accountants would suggest the start-ups undertake a full business plan including a cash flow forecast to try and avoid failure, but enough said

Regarding myself, we are mainly a card based company with over 97% of orders paid by card prior to dispatch, the remaining account customers are companies like schools, doctors, and government departments including Buckingham Palace, which are all pretty safe bets and if they do go over the 60 day in-house limit we close down their account facility, we have a tough attitude to credit and have lost only £36.94 since 2003 in non recovered debt, so think we do know what we are talking about.

 

[mhall]

and we all lived happily ever after....

 

[Chris Ashdown]

Blubber on o wise one, you have never met me, know virtually nothing about me, yet feel the need to make these stupid remarks to hide your short commings.

I notice your web site does not mention any names or professional qualifications is that an oversite

Hopefully the readers can make up their own opinions and get the right directions to start up

Enough I'm Out

 

[MorrisChesterfield]

I have never done a business plan, I sometimes think if it would be a good thing, but then I struggle keeping upto date with paperwork as I'm on the road all the time on jobs.

Ben

 

[Strontium Dog]

I have never done a business plan, I sometimes think if it would be a good thing, but then I struggle keeping upto date with paperwork as I'm on the road all the time on jobs.

Ben

Had you ever thought that the two might be connected ?

 

[MorrisChesterfield]

Invoicing has to be done to get the money in, if things are going ok you put other tasks off and put then on back burner. Until something goes wrong and then you say ' I should have done that '

Obv if you need a loan etc a bus plan is needed before they let you sit down.

Ben

 

[Chris Ashdown]

Once you are up and running , Monthly accounts give you more and better information on how you are doing and plans get far easier to look to the future

The business plan really just comes down to research into what you want to do, and should be written for yourself to prove it should work

Other versions are made to satisfy others, so they can understand the workings of the company and normally judge on lending or not

If a start-up needs a loan they need the full plan to prove the company and also yourself it will work

 

[James Copperwaite]

Hi all

Has everyone on this forum who runs a successful small business sat down and completed a full business plan? I have seen these business plans and there is a lot of detail to consider.

I wondered if anyone achieved the same success with just dealing with the top level stuff in a bullet point way i.e. knowing there is a market, pricing structure, knowing target audience and how to advertise.

I understand of course, that you would need to have a detailed plan put together if you required funding from certain sources, but if you didnt - did you sit down and go through the whole document?

I'm conscious that I may be coming across lazy and potentially naive, but I feel that I just want to get on with it, rather than spending so much time completing a bit of paper....

Hi - Try and make the executive summary summarise the entire Business Plan. This is generally what the investor will base their decision on.

 

But, Mousie, thou art no thy lane [you aren't alone]
In proving foresight may be vain:
The best laid schemes o' mice an' men
Gang aft a-gley, [often go awry]
An' lea'e us nought but grief an' pain,
For promised joy.

I once wrote a plan on a fag packet ,but unfortunately I threw it away.

It said "remember to make some money"

constant research and developement is my only plan,mostly kept between me ears.

Earl

 

[James Copperwaite]

But, Mousie, thou art no thy lane [you aren't alone]
In proving foresight may be vain:
The best laid schemes o' mice an' men
Gang aft a-gley, [often go awry]
An' lea'e us nought but grief an' pain,
For promised joy.

I once wrote a plan on a fag packet ,but unfortunately I threw it away.

It said "remember to make some money"

constant research and developement is my only plan,mostly kept between me ears.

Earl

Well we learn from our mistakes!