Entrepreneurs starting a business will find it extremely useful to create a business plan. However, if the business plan isn’t that good, it won’t be useful to the entrepreneur. Remember that the business plan is only as good as the information inside. This is why there are many sources of information and guidance when preparing to create a business plan.
In addition to the Business Link, there are two other government agencies that might be helpful:
- Regional Development Agencies, such as the North-West RDA. These agencies set priorities for their local areas, try to attract overseas investment, and provide advice and help for firms starting up. Just like with Business Link, entrepreneurs question how valuable their advice really is.
- BEER, the department for Business, Enterprise and Regulatory Reform. This department runs the Small Firms Loan Guarantee Scheme, which encourages high-street banks to lend high-risk small firms. If the firm collapses, the government guarantees to pick up the bill. Any firm using this way to borrow capital will have to pay an extra 2% interest per year on the loan. Up to £250,000 can be borrowed in this way.
For those that have no business knowledge, it may be helpful to get a cash flow and profit forecast from an accountant. The only aspect of a business start-up that an accountant would be invaluable for is advice on tax issues. Should the business buy a van or lease it? Should the business start as a limited company or sole trader? These are technical questions that an accountant will know more about than you ever will.
Small Business Advisers
The government service ‘Business Link’ usually put entrepreneurs in touch with small business advisers. Especially for a young person that can turn to someone when things go wrong (like a mentor). Say you open a phone shop in a High Street and a Carphone Warehouse opens next door within six weeks later – it would be ideal to talk about what to do with a more experienced businessperson. The problem with this is that good people will not come cheap.
The Prince’s Trust
The Prince’s Trust works with people unemployed or disadvantaged people up to the age of 30. It can lend up to £4000 towards a new business start-up, but more importantly is that the Trust insists that you regularly attend sessions with a (free) mentor. Due to royal connections of the Trust, these mentors are often quite high-powered business people whose advice is invaluable.
Even if there’s no point in having a business plan, it may still be valuable to have prepared one. For most, the plan is likely to gather dust after it has served its purpose of raising finance. That may well be right, because the key thing is preparing it, not having it. Putting the plan together forces the entrepreneur to think about every aspect of the business actually starts up. When the business starts, the figures in the plan will probably look silly being either way to high or low.