Business planning is like a road map. It sets out the direction of the business proposes to develop over the next year. With about 15,000 business failures annually in Ireland and a one in three chance of companies making it past 10 years in business, failure rates are exceptionally high. Businesses that fail to plan, are planning to fail!
Purpose of a business plan.
A business plan ideally has three main purposes:
- It is designed to help a business to make decisions. It analyses expected income and expenditure associated with decisions so that these can be quantified before the decision is made. Its main function is that of a decision making tool.
- It presents to your Bank/Financial Institution projections for the purpose of deciding your financial needs over the period of the plan. This helps both you and the Bank to structure your borrowings in the appropriate manner.
- It allows you to plot your actual performance against your projected performance and see where your variances arise so that you can make corrective decisions in a timely manner. With regard to Business Planning we have state of the art software to enable us to prepare cash flow projections, profit and loss projections, product margin projections, sensitivity analysis ,etc.
If you are starting a new business, or expanding an existing business, and want to raise finance we can offer some helpful advice and also help you with your loan applications. It is common for loan providers to request financial and cash flow projections particularly for longer term, higher value loans and especially where your business does not have a trading history.