Business Incorporation

When starting a business, having a good business plan is necessary. A big business usually have a more comprehensive business plan than a small business but all businesses need business plans. It is not safe to start a business unless you have a good plan.

There are many reasons for having a good business plan. Not only is it for the business owner to decide whether the business will be successful but it is also needed by lenders if you ever want to get a a loan for your business. The financial forecast part of the business plan is, by far, the most important one when you need to get a loan. The lender or bank will need you to prove to them that your business is going to be a successful business. They need to see for themselves how and when your business will profit so that you can repay the loan. For a business to profit, the plan has to show how it is going to make money when subtracting all the costs associated with starting the business as well as investment costs. It needs to spell out all the income and expenses of the business each and every year up to the time that all the loans will be paid off.

Many small businesses take a long time to write a business plan because it can be complicated to project all the aspects of the business upfront. Not only the business needs to be clear on what services and products the business will have but there are a substantial number of important analyses to be included in the business plan. The industry analysis is one that might take a long time but it can be done at the same time as market analysis. In each market, there are many competing businesses and they must be analyzed and part of the competitive analysis section of the business plan.

One other important section of a business plan is the sales and marketing strategy section. Each business must find ways to market its services and products to find as many customers as possible. These days, there are plenty of online marketing techniques as well as off line marketing techniques. It is necessary to use all the various marketing channels that can be used to help the business grow.

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If you seeing in your company one or more of the following signs, you will probably be in need of a business advisor:

1.    Lack of clear direction in the company – The company will experience symptoms such as individual role execution where it does not contribute to the success of the company, conflicting objectives over departments and divisions, and wastage of resources. Business advice will relate implementing an adequate vision, tactical strategy and operational execution disciplines.

2.Lack of formalised business plan – The business advisor will ensure that an adequate business plan is formulated for the company formalising the direction, resources required, abilities of the company and the future financial position of the company.

3.    Steady escalating costs – The business advisor will analyse the current and future operational and capital  epxenditure and present business advice as to the applicability of the costs and the benefits derived by the company incurring these costs.

4.    Service delays or late deliveries of products – The business advisor will assess the current defined accountabilities and the processes used for the delivery of services and products. Futhermore, the business advisor will investigate customer complaints and trace them to breakdown points. Business advice presented will include enhanced processes, accountabilities, service delivery standards.

5.    Lack of information about competition or market – Inadequate information can lead to incorrect or lagging market responses and outdated services and products. Companies are also constantly threatened by new entrants and current competitors changing services and products thus dramatically shifting the market segmentation.

6.    Frequent cash shortages – Profits do not always translate into cash. Cash shortages will severe disrupt the ability to increase the using of resources or sustaining current commitments. Business advice will include an analysis of working capital cycles, debt structures and price/volume sensitivity.

For business advice please contact Christo van Huyssteen on christo@bizrite.co.nz or 0800200500

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Business planning feels sometimes like visiting the dentist – you know you must do it, but you keep putting it off

Historically business plans were prepared to obtain finance and subsequently filed away. Larger corporations prepared business plans internally to justify operational and project budgets. These business plans were seldom revisit and the accuracy and completeness were always questionable.

Regardless of the size of your business, it is imperative to be incredibly focused within your business. In depth focus can only be achieved through proper planning. This can be achieved through the use of structured business plan, sound business advice and ongoing evaluation against the plans.

The structure of the business plan should include:

•    Current market situation – Understand your current market environment, including its size and the share you can realistically achieve. The size of the market will depend on market trends, target customers and competition.

•    Current target customers - Evaluate the characteristics of the target groups of customers that could buy from your business.

•    Competitor analysis – The level of competition and the strength of the competition will provide an indication of how difficult it will be for you to attract customers.

•    Marketing strategy – Detail the objectives and targets for the volume and share of the market you hope to achieve and when you want to achieve it by.

•    Marketing plan – Explain in detail how you going to achieve your marketing targets and objectives.

• Sales Goal and objectives – Details your sale forecasts in terms of different product types by volume and value.

• Operational requirements – Draft an outline for your business plans for premises, equipment, staff, suppliers, compliance and estimated costs.

•    Current financial requirements and financial forecasts – Includes a breakdown of your financial requirements, the sources of finance available and any shortfall that will require funding.

•    Management processes – Consider key skills, responsibilities, and management processes needed.

• Business risks – Lists the risks your business is exposed to and how you plan to mitigate it.
Closing remarks

No-one knows the pitfalls of planning and running a business better than persons who have done it. Rather than wait too late, contract business advice in if you do not have the necessary expertise. Experts can not only provide business advice for your business planning procedure but will become advocates for your business, cheering it on!

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