Business planning; define, achieve, succeed.

It is important for every business owner to have a plan. Taking advice ahead of starting a new project, planning for the business to head in a different direction, or just starting off is so important to the success.

Taking advice will also ensure that the business owners are structuring things in the most tax efficient manner for both the business and themselves personally.

Very often in our work, we meet with individuals who have started a business but didn’t really understand what the obligations were of the type of entity chosen in advance and on many occasions, we need to change things fairly quickly. Although this can usually be sorted out without too many issues, it can take time to resolve. It can also cause confusion due to a lack of understanding, sometimes penalties arise where deadlines have been ignored, but it’s also likely the business owner will be incurring costs down the line that could have been saved if advice had been taken up front.

Planning for business

A business plan can be a detailed document, but can also be simply scribbled down on a piece of paper depending on the type of structure and size of your business and the reason for completing one – but every business owner should have one.

We know that when you start a business, it is much more exciting to get on and do, rather than write about it but you don’t want to be wasting time, energy and most importantly money further down the line because you didn’t take the time at the start to make a business plan.

By producing a business plan, you will have a clear picture of what you are going to need to have in place to achieve that goal.

Where lending is required, a more detailed document will be produced. It’s a plan of your business that is looking forward 3 to 5 years. It should consider what direction you would like the business to take, how you intend to increase the revenue of the business in the process, what key staff you may need to achieve this success, how you are going to pay for this growth (what are your funding needs). It is an ever-changing document that will record the business journey and will be vital to secure lending.

For a business goal to be achieved, it has to have realistic defined objectives as to what is needed to get there. Without this, it is likely that the business will not operate in a clear direction, which will slow down progress and create many issues along the way.

Key issues faced by your plan

Who are your key competitors – every business has them and it is really important to recognise this.

What are your biggest threats – is your business seasonal and therefore reliant on weather? Are you reliant on a particular supplier, what happens if their business is struggling or the product quality reduces or costs increase significantly. Will your business be affected by overseas issues?

Tax considerations – it is not just about Corporation Tax/Self Assessment tax although it is vital you know what tax you will be paying and when it is due. Are there ways that any tax liability can be reduced?

Is the business VAT registered – should it be? Is it on the best VAT scheme for the business type? Does it need to be VAT registered in a different country? Does it have all the relevant certificates and registrations in place?

Knowledge is key

It is important to focus on the team that you need with you. No business owner has all of the skills needed to take the business all the way. You will need to identify within yourself the gaps in your own knowledge and experience to be able to overcome them through your planning. It is only when you have a well-rounded team that your business will be ready to tackle the challenges ahead.

When starting a business, taking advice as early as possible is key. For example, do you know what the differences are between a sole trader, a partnership or a Limited company? How does the tax system work for each and when is any tax payable? How are you planning on funding the business? And what are the deadlines involved? What record keeping is required?

How can Haines Watts help?

We advise clients with a broad range of business planning matters throughout the South West region.

If you would like to have a conversation to understand the complexities of the above, please get in touch with your usual Haines Watts contact.