The Necessity For A Business Plan
Topics: Business account, business plan, account manager, business bank account
A necessity when starting a business in the modern world is to create a business plan. Without one your company will float aimlessly like driftwood with no sense of direction. It is also a must if you plan to open a business account as account managers will view it as a matter of course to see a valid business plan.
When creating a business plan it is essential to go through the process logically. You must account for all aspects of the business; this includes detailed lists of outgoings as well as income. If you as a manager cannot define the current state of the business in a detailed way there is no way you can brief an account manager at a bank on how you think your business will perform in the future.
The undertaking of auditing all expenditure is a vital exercise that must be carried out by all companies, from high street shops to multi-million pound empires. The amounts paid for property leasing, staff wages, heating and lighting bills as well as tax must all be taken account of in a logical and thorough manner. Without a list of expenditure no banks or investors will wish to financially support your company.
The next phase of a business plan is to suggest the course of your company’s profits and growth over an extended period of time. This may sound simple but an easy mistake to make in this phase is to predict rapid growth and profits that will keep the account manager smiling. Targets however should be realistic; there is little use in predicting things that will not happen. As the bank will want to see development as set out in the business plan, setting astronomically high targets is a foolish path to follow. To use an old adage you will be ‘making a rod for your own back’ if you follow this course of action.
Deluding yourself into thinking your business will be making millions in a matter of years is foolhardy. There are not many bank account managers who will be duped into believing figures that have no grasp on reality. At this stage of your business planning it is important to be honest with those who do your banking; as they are often the major financial support for your business, you, as a client must keep them ‘on side’. This includes answering questions truthfully and openly, after all, the bank is your financial crutch; without it your business will crumple.
Once the bank’s account manager has accepted your plan and agreed funding or account managing services this is not the end. In fact this is just the beginning as success in business depends upon sticking to a business plan and ensuring targets are met. What must be remembered however is that the bank are there to help; if things do begin to go wrong, the ‘head in the sand’ mentality must be avoided at all costs. Ignoring the bank’s correspondence is bad practise and will only lead to rack and ruin.
Nobody ever said that succeeding in business is an easy task. Many businesses fall into obscurity daily, while success stories are rare. Success comes through determination and a belief in your business; without these characteristics failure is almost certain. A good business plan that takes into account all aspects of operation is a prerequisite to achievement. A logical methodology is an essential precursor to accomplishment.
Financial expert Shaun Parker advises on how to get the best service from your business account holder. To find out more please visit www.lloydstsbbusiness.com
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