Business Plans for numpties, ugh!!
Discussion
Hi all,
I'm currently faced with writing a business plan, it should be easy but I've never done one before and I don't appear to speak the same language that's used in all the sample plans I've looked at online
Basically I'm looking at buying into a franchise and I'm after a £30k loan hence the need to prostrate myself before various banking types and wow them with a business plan. I've already got some nice spreadsheets showing profit/loss and cashflow for the first two years so really the number side of things looks OK, I just need to figure out the language side of things!!
However my first stumbling block is VAT. I've been using NatWest's planning software to try and get some vague template together however it has no provision for dealing with VAT. So I'm putting in my sales costs excluding VAT so that the profit figure it churns out is realistic, however I should really include VAT in the start up costs otherwise the banks will wonder why I want so much. Of course doing that screws up the projections of course. Or should I include VAT on everything and stick in a 'All figures are inclusive of VAT' type blag?
The spreadsheets I have do contain all the VAT info and of course I will be including them but obviously don't want to display apparently differing data.
Good grief, this could be easier, having written all that I'm even more confused now
I'm not even sure what I'm asking you now!! 
Cheers,
Rob
I'm currently faced with writing a business plan, it should be easy but I've never done one before and I don't appear to speak the same language that's used in all the sample plans I've looked at online
Basically I'm looking at buying into a franchise and I'm after a £30k loan hence the need to prostrate myself before various banking types and wow them with a business plan. I've already got some nice spreadsheets showing profit/loss and cashflow for the first two years so really the number side of things looks OK, I just need to figure out the language side of things!!
However my first stumbling block is VAT. I've been using NatWest's planning software to try and get some vague template together however it has no provision for dealing with VAT. So I'm putting in my sales costs excluding VAT so that the profit figure it churns out is realistic, however I should really include VAT in the start up costs otherwise the banks will wonder why I want so much. Of course doing that screws up the projections of course. Or should I include VAT on everything and stick in a 'All figures are inclusive of VAT' type blag?
The spreadsheets I have do contain all the VAT info and of course I will be including them but obviously don't want to display apparently differing data.
Good grief, this could be easier, having written all that I'm even more confused now
I'm not even sure what I'm asking you now!! Cheers,
Rob
Have a chat to your local business link, they are normally really helpful & have all sorts of exciting templates & guidance on business plans. The act of completing the plan should in theory make you think of answers to many of the questions you will be asked when looking for a green light or finance. It may even tell you that your current plan isn't viable, conversely if you changed x or y it would be.. handy 
Now, you may not think that this at this stage is overly positive or helpful, but there is a serious reality with business plans for banks.
I have spoken to the business managers at Lloyds, Barclays, and HSBC and am yet to find one who has actually run a business. Further to that, I must also say that their understanding of what the figures in your plan actually *are* and how realistic they are is very limited.
The reason why they want to find out the headline figures is so they can put these 'simple' figures into their 'simple' equation and give them a figure which will either say yes or no.
If the answer is yes, I can say with 95% probability for that amount for money they will want to show that you are also investing some of your own money into the venture and they will want security for the rest. This will no doubt be a charge on your property.
If this would scupper your venture, or make it impossible I would really rethink things at this stage before credit checks and such have taken place.
My best recommendation at this stage, and what would make the most compelling argument to whether the bank should lend you money or if you should do it at all would be you must speak to other franchisees and ask them how much money they made in their first three years. That will give you the most realistic figures.
My other thought is what the £30k goes towards? Would it not be better to start your own business and get your own equipment or whatever it is? Now, if you do that the banks would more likely lend the money as the equipment itself could be taken as the security...
I have spoken to the business managers at Lloyds, Barclays, and HSBC and am yet to find one who has actually run a business. Further to that, I must also say that their understanding of what the figures in your plan actually *are* and how realistic they are is very limited.
The reason why they want to find out the headline figures is so they can put these 'simple' figures into their 'simple' equation and give them a figure which will either say yes or no.
If the answer is yes, I can say with 95% probability for that amount for money they will want to show that you are also investing some of your own money into the venture and they will want security for the rest. This will no doubt be a charge on your property.
If this would scupper your venture, or make it impossible I would really rethink things at this stage before credit checks and such have taken place.
My best recommendation at this stage, and what would make the most compelling argument to whether the bank should lend you money or if you should do it at all would be you must speak to other franchisees and ask them how much money they made in their first three years. That will give you the most realistic figures.
My other thought is what the £30k goes towards? Would it not be better to start your own business and get your own equipment or whatever it is? Now, if you do that the banks would more likely lend the money as the equipment itself could be taken as the security...
Hi,
I've been looking over the Business Link website, unfortunately their nearest place to me is down at Hatfield apparently and I'm up near Peterborough so quick visits aren't too convenient.
I understand what you're saying about the banks just looking for a nice big number in the projections so they can get the computer to do the rest, but I've been specifically asked to provide a business plan as well as profit/loss/cashflow projections, so I figure I'd better do one! I also understand the apparent benefits for doing on personally so I can get my ideas down in writing, it's just that I know what I want and where I want to be in a year, 2 years etc. and that doesn't need 5000 words to say it
In terms of money, I'll be putting in £14-15k on top of the banks contribution. There is definiely money to be made - all being well - but as with everything it's always possible to screw up!
Cheers,
Rob
I've been looking over the Business Link website, unfortunately their nearest place to me is down at Hatfield apparently and I'm up near Peterborough so quick visits aren't too convenient.
I understand what you're saying about the banks just looking for a nice big number in the projections so they can get the computer to do the rest, but I've been specifically asked to provide a business plan as well as profit/loss/cashflow projections, so I figure I'd better do one! I also understand the apparent benefits for doing on personally so I can get my ideas down in writing, it's just that I know what I want and where I want to be in a year, 2 years etc. and that doesn't need 5000 words to say it
In terms of money, I'll be putting in £14-15k on top of the banks contribution. There is definiely money to be made - all being well - but as with everything it's always possible to screw up!
Cheers,
Rob
Cash flows and projections for start up businesses when looking to a bank for finance are really a waste of time and I hate the way banks rely on them.
The only real use if for you to see if you feel the business is realistically viable.
I wonder how many cash flows they receive showing losses for several months beofre the business closing and the owner looking for a job!!
The only real use if for you to see if you feel the business is realistically viable.
I wonder how many cash flows they receive showing losses for several months beofre the business closing and the owner looking for a job!!
Don't say that!!!!!!!!!!!!!!!!!!!!! smartie said:
Cash flows and projections for start up businesses when looking to a bank for finance are really a waste of time and I hate the way banks rely on them.
The only real use if for you to see if you feel the business is realistically viable.
I wonder how many cash flows they receive showing losses for several months beofre the business closing and the owner looking for a job!!
Exactly.The only real use if for you to see if you feel the business is realistically viable.
I wonder how many cash flows they receive showing losses for several months beofre the business closing and the owner looking for a job!!
My real point over the business plan for the bank is to make it look good and tick all the main boxes. To be frank, realism is not the priority here as if most potential business owners actually knew what was going to happen and were honest about it they would never be lent the money!
As you say, it is much more likely that some businesses do not get paid work until 2, 3, 4 or more months down the line and not actually receive payment until some time after that!
The best way of finding real figures must be to contact other franchise owners to see if the franchise is as lucrative as promised. Even if your business plan is basic, if you can walk in with the figures of what 3 other franchise holders turned over and profited in the first and second years this will be a lot closer to reality than a best guess. This will prove the concept to them and you.
JustinP1 said:
smartie said:
Cash flows and projections for start up businesses when looking to a bank for finance are really a waste of time and I hate the way banks rely on them.
The only real use if for you to see if you feel the business is realistically viable.
I wonder how many cash flows they receive showing losses for several months beofre the business closing and the owner looking for a job!!
Exactly.The only real use if for you to see if you feel the business is realistically viable.
I wonder how many cash flows they receive showing losses for several months beofre the business closing and the owner looking for a job!!
My real point over the business plan for the bank is to make it look good and tick all the main boxes. To be frank, realism is not the priority here as if most potential business owners actually knew what was going to happen and were honest about it they would never be lent the money!
As you say, it is much more likely that some businesses do not get paid work until 2, 3, 4 or more months down the line and not actually receive payment until some time after that!
The best way of finding real figures must be to contact other franchise owners to see if the franchise is as lucrative as promised. Even if your business plan is basic, if you can walk in with the figures of what 3 other franchise holders turned over and profited in the first and second years this will be a lot closer to reality than a best guess. This will prove the concept to them and you.
As the chances of the paper tallying up with the reality in the first 3 years are pretty much nil I reckon.
Goals are fine, plans helpful,advisable even (if kept general) but cashflow forecasting is pie in the sky.
Plotloss said:
I've often thought that the sole purpose of the business plan/cashflow forecast is to scare you into not starting up.
Goals are fine, plans helpful,advisable even (if kept general) but cashflow forecasting is pie in the sky.
I have run my business, which started from my bedroom 11 years ago and now has a 7 figure T/O (and a margin of over 44%) without a business plan ever being written.Goals are fine, plans helpful,advisable even (if kept general) but cashflow forecasting is pie in the sky.
I probably couldn't do one and wouldn't know where to start and I have always used the old school 'gut feel' for making day to day decisions.
It doesn't work for everyone, but neither does a business plan.
little pre edit - I do have advice from other quarters re employment law for example as that is a area you can't afford to get wrong
B19GRR said:
Hi,
I've been looking over the Business Link website, unfortunately their nearest place to me is down at Hatfield apparently and I'm up near Peterborough so quick visits aren't too convenient.
There was one on the Huntingdon ring road a couple of years ago, right next to the bus station. I've been looking over the Business Link website, unfortunately their nearest place to me is down at Hatfield apparently and I'm up near Peterborough so quick visits aren't too convenient.
ETA - St. Marys St
Huntingdon, PE29 3PE
0845 609 7979
Edited by tonyvid on Tuesday 5th February 12:06
B19GRR, you want a £30k loan + the £15k you are putting in? Are you in a job just now? If you are then I would suggest just getting a personal loan. Any bank loans made to new businesses are made at a much higher interest rate and they will probably want it secured on something....bugger that!
Then all you need to do is make sure you are happy with your plan/figures and away you go Just make sure you talk to some people who have experience of starting a business as they will probably give you lots of valuable advice.
Then all you need to do is make sure you are happy with your plan/figures and away you go
Just make sure you talk to some people who have experience of starting a business as they will probably give you lots of valuable advice.Hi Andrew,
I'm already self-employed at the mo' (multimedia software developer, ugh!), currently working on a contract but of course that's variable, and the amount of work I'm getting is going in the wrong direction hence the desire to move on. I also already have a personal loan (no where near £30k though), spoke with my financial adviser yesterday as I was concerned that as I have personal debt things might not look too bright in terms of getting a business loan. His take was that if I was coping with my debt (I am) and have a good credit history (I do - luckily!) then it's not something that should stand in the way of things as long as the projections are good.
I'm seeing an adviser the local enterprise agency on Friday to have them check over my figures and business plan before sending them off to the bank, so hopefully they'll give me an idea as to how viable things are.
Cheers,
Rob
I'm already self-employed at the mo' (multimedia software developer, ugh!), currently working on a contract but of course that's variable, and the amount of work I'm getting is going in the wrong direction hence the desire to move on. I also already have a personal loan (no where near £30k though), spoke with my financial adviser yesterday as I was concerned that as I have personal debt things might not look too bright in terms of getting a business loan. His take was that if I was coping with my debt (I am) and have a good credit history (I do - luckily!) then it's not something that should stand in the way of things as long as the projections are good.
I'm seeing an adviser the local enterprise agency on Friday to have them check over my figures and business plan before sending them off to the bank, so hopefully they'll give me an idea as to how viable things are.
Cheers,
Rob
Interesting. My wife is in a similar position of needing a business loan and has a meeting with her HSBC business manager next week about it and obviously needs to do a business plan.
As a Limited Company I just assumed that a personal loan wouldn't be appropriate for her. Sole Trader, yes - it's all your money - but with a Limited Company it is a separate legal entity and surely you can't just use a personal loan for business borrowing?
As a Limited Company I just assumed that a personal loan wouldn't be appropriate for her. Sole Trader, yes - it's all your money - but with a Limited Company it is a separate legal entity and surely you can't just use a personal loan for business borrowing?
Gassing Station | Business | Top of Page | What's New | My Stuff