The heart of a business plan will be the financial analysis. Even if you are not an accountant you can prepare the financial analysis providing you can use Excel and are methodical.
Before thinking about the numbers you need to set-up the spreadsheet.
Start with the Profit & Loss Account
It is easiest to work in sections so start with the details. On a clean worksheet start with all your sources of income. Use a separate line for each source of income with a total line at the bottom. Once you have all the rows you can set the columns to monthly, quarterly or half yearly. Monthly for the next year and quarterly or six-monthly for periods after 12 months are common.
If your business has direct costs of sales, for example a manufacturer, baker, plumber or electrician then you will need to set up a new sheet for all the direct “cost of sales”. As with income set a new line for all your direct costs and a total line at the bottom.
When developing the spreadsheet for a consultancy type businesses you may not have any direct costs (unless you have consultancy staff) so most of your costs will included in the overheads worksheet. The overheads worksheet should have a separate line for all the costs of the business, it will be easier in the long run if you collect the costs together in batches and sub-total each batch.
Property costs batch including: rent, rates, utilities, cleaning and insurance (plus other property costs you may have)
Other batches for sub-totalling might include:
Staff costs (wages, welfare, training, company national insurance)
Professional fees (accountancy fees, bookkeepping fees, legal fees)
Entertaining (staff, client or customer)
Advertising and marketing (advertising, website costs, marketing consultancy, public relations)
Telephone costs (landline, mobiles, broadband)
The front sheet for your Profit & Loss
Pulling together all these sections will calculate your EBITDA (Earnings before interest, tax depreciation and amortisation). You can see what these terms mean by checking our A-Z of accounting terms.
The front sheet will be a summary of all this data and should be linked through to each backing worksheet so once you start entering figures the totals will automatically feed through to the summary sheet.
At Clearways Accountants we have prepared business plans for clients and reviewed our client’s own business plans. If you need assistance with your business plan then contact us on 01737 244298.