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Enterprise & Freelancing: Business Plans and Finance

a guide to starting your own business or setting up on your own

Enterprise & Freelancing

Business Plans and Finance

Making your case to investors and spending their money wisely

Embrace the Chaos

Much of the writing about setting up a business is based on the idea that it is a progessive and predictable process. There are specific stages that you go through, and you can create strategies and plans to eliminate any future uncertainty or change.

In reality, starting a business is not a linear process. Change is sudden and unpredictable. Plans need constant revision and a different mindset is required. In this world:

  • It is about harnessing what is around you, rather than trying to control it
  • Develop a flexible organisational structure, where information can be shared freely in all directions
  • Use your vision to build a set of core values that people can buy into
  • Empower people to make decisions, experiment and make mistakes

Success cannot be guaranteed, but this could allow you to maintain the energy and resources to adapt quickly to changing circumstances

Crowdfunding

A new way to raise funds using your existing networks to leverage the crowd. There is generally a limited time frame, and a minimum amount to be specified.

Business Planning

A business plan can help you clarify your ideas as well as set your goals and objectives for the business. It may also be important for securing funding. Your plan should call on the market research you have undertaken and create a coherent sense of direction. At the same time, it needs to be flexible so that it can grow and develop with your business.

The biggest mistake people make when writing a business plan is to make it too long. According to the Entrepreneur's Book of Checklists, good business plans are:

  • concise - to the point and focused
  • emotional - you want this bad, so tell the reader why
  • logical - it must give you, and your reader, confidence
  • factual - demonstrate your understanding
  • realistic - don't commit yourself too much

Finance

You don't have to be rich to start your own business. It would certainly help, but people do start businesses with little or no money of their own. However, it is important to know exactly what your financial position is. Look at your monthly budget and assess your personal assets. Start keeping records of everything. Think about applying for your credit report. Now you need to get your head around the key financial tasks involved in setting up a business:

  • Work out your start-up costs - will you be home-based or require a premises? What equipment will you need? What about additional costs, such as stationery, marketing, internet/telephone connections, packaging/manufacturing costs? You should keep costs to an absolute minimum, so be creative and willing to compromise in order to achieve this
  • Forecast your sales - part of this will involve getting your prices right. Do your market research and work out your breakeven figure. You are looking to work out an optimum price which will maximise profits after your costs have been paid
  • Startup funding - once you know how much money you need to launch your business, you can work out if you can fund it yourself or if you need to find money from elsewhere. This could involve friends/family, bank loans or searching for grants
  • Cashflow - this is key to your survival and success. Keeping costs down and making sales is important, but so is making sure you get paid. Effective credit control is really important

The Startup Donut has some great resources for Financing a Business

Peer-to-Peer Borrowing

A new way to fund your business which allows you to borrow from individuals rather than the bank. Lending rates might be lower, too, as services allow individuals to bid on your loan. You will need a good credit rating to get a decent loan, and this will be checked as part of your application.

Business Plan Resources

Finding Funding