4 steps to make your business a success | moneyfacts.co.uk

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Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 22/12/2020

Step 1: write a business plan

Every business, no matter what its size or age, should create a business plan. Your business plan shows lenders, investors and your employees (if you have these) your vision, strategy, objectives and tactics to grow your business. A business plan will include an executive summary, that needs to be easy to read, and highlights the significant points in your business plan. You will also need to cover:

Your financial position

  • You should include in your business plan both a historical and forecast view of the financial position of your business. If you have them, you should include the last three years of trading and audited accounts and your forecasts for the next three to five years.
  • You should also include your key sales and financial targets, including if you need debt finance or are looking for investors to grow the business. You should show the size of any business loan or commercial mortgage, and the interest rate costs, and you will need to evidence how your business will meet the interest payments and repay the capital borrowed. If you are looking for investors, you should state any form of tax relief they might benefit from and any existing investment you have already attracted. You should also show contingency planning for any potential downsides in your plan, such as sales targets not being met or costs being greater than expected.

Highlight your key people and skills

  • Your people and their skills and experiences add huge value to your business and can increase the confidence of investors and/or lenders that your business will succeed.
  • An overview of your products
  • You will need to include an overview of your products and/or services, those that are already live and those in development. You should include the product and service use cases and their points of differentiation. You can also state which clients are using the products, their price points and levels of margin.

A marketing strategy

  • You need to demonstrate a detailed understanding of your market, its current size, future growth opportunities, and your direct and indirect competitors. You should outline who your target customers are and how your products and services meet their needs. Show how you will develop your brand, and attract new - and retain existing - customers. This should include your marketing budget and the return you expect to generate from this investment.
  • Find out more about marketing software and ecommerce services.

Step two: manage your cash

Cashflow is the lifeblood of any business. A weekly cash flow shows all the ins and outs of cash across your business. This helps you to understand how much cash your business generates and what is paid out. You also need to understand your working capital to operate the business. This includes reviewing stock levels, so any excess is removed, and prompt issuance of sales invoices and managing payments to minimise late-payers. Any capital expenditure also needs to be reviewed to make sure it is achievable without damaging your cashflow. More businesses are using automated payments to help improve the speed of payments.

Step three: refresh the business plan

Over time things change and it is a sensible idea to revisit and update your business plan. This will allow you to maximise any new opportunities that have arisen and make sure you can adjust your plan if things such as budgets or sales have over or underperformed. If you decide you want to find a business investor, this may not only provide the capital you are looking for, but could also bring additional business contacts and experience to give your business a further boost.

Step four: focus on great customer service

Whether you are a manufacturer or in the services industry, providing an excellent customer experience is essential to increase the reach of your business through recommendations and referrals, and to increase your repeat revenue from existing clients. It’s important that driving great customer service is part of your business culture; you can do this by making sure your product information is clear and easy to understand, and by training your staff in not only how your product or service works, but also in conflict management and developing empathy. You should also encourage feedback about your products and services from customers; not only can these form great reviews, but they also help you to improve your current offering and develop new product/service ideas.

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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