In 1492 Christopher Columbus, an experienced and skilled mariner sailed off to the new world. He had no idea where it was, had no route to follow, didn’t know where he was when he arrived and didn’t know where he’d been when he returned.
Some 500 years later, directors of SMEs take the same approach when running their own businesses, as they have no business plan. As a consequence they are unable to attract investment when required, satisfy existing investors that their money is safe, demonstrate how they will continue to grow profitably, communicate their company’s short and long-term strategy to employees and often have difficulties with their bank.
Therefore it’s perhaps not too surprising that 25,000 businesses fail every year, with over a third of those failing in their first year of operation.
Whilst many company directors agree that having a business plan would resolve a number of issues, they don’t have the time to produce one. Or they’ve been put off by the perception that once it’s been produced, it’s out of date and only acts as a large and expensive paperweight.
ibd advisers are skilled in the production of working business plans; plans that are concise easily understood and provide a practical tool to run the business efficiently and effectively. They also understand the style and format favoured by banks and other finance providers. This, in combination with the professional relationship many have with local and regional business bank managers, can be of great assistance to a business owner who would otherwise be raising funds on his or her own.
Here are some typical activities and benefits companies can realise from engaging in business planning:
- Provide a clear statement regarding the organisation’s vision, strategy and objectives.
- Identify the individual directors past experiences and how these will combine to provide a strong management board.
- Produce a business plan that can be used to attract additional finance to fund further growth.
- Provide a significant proportion of the documentation required for a grant application.
- Provide a clear and easily communicable strategy to stakeholders and employees.
- Identify and quantify potential risks and resolution strategies.
- Help the directors demonstrate that they have the appropriate contingency plans in place regarding statutory business disaster recovery.
- Maximise the value of the company in preparation for an exit sale.
ibd advisers regularly draft business plans that are tailored to the owners’ requirements for investment, business sale, investor updates and other purposes. They have the experience and by working with the management board can ensure that these plans become living documents for the business. This can be for a start-up, those looking to diversify, an existing business needing additional finance, etc.
The approach taken by ibd advisers is to offer and undertake a variety of services, including those shown below, to ensure your business plan provides practical assistance in the achievement of company objectives:
- For spin out or start-ups ensure that the aspects of intellectual property, trademarks etc, are covered
- That new business names comply with existing legislation and that the associated domain names are available
- Make sure potential competitor actions are understood and mitigated against
- Review of legal documents such as property leases, supply and purchase contracts
- Aid the directors in satisfying the requirements of the bank regarding loans and or overdraft facilities
- Demonstrate that risks have been understood and strategies in place to mitigate against them
- Demonstrate that cash flow and financial forecasts are understood, managed and planned
- Establish that the market is really ready for a new introduction
- Prove that the product or service is ready for the market
- Identify opportunities and areas for employee development
- Show that ‘what if’ scenario planning has taken place
- Provide a timetable for future profitable growth and the investments required to achieve it
We want to make it straightforward and simple to engage with ibd advisers:
- The first step is for you to create a brief for a prospective adviser, whether it is a one-off project or a longer-term relationship that is required.
- Via ibd head office, you then make contact with an individual or number of prospective advisers with whom you’d like to open discussions.
The timeline for creating a shortlist and taking a decision is dependant on your own company processes. You may want to invite an adviser to your offices so they can get a feel for your business and meet any additional members of our management team.
Need to know more?
If you would like to know more about this specific subject area, please contact the ibd head office on 01223 597845 or email us at email@example.com