Essay About Business Plan And Pic

Key Steps for Writing a Business Plan and Preparing a Budget
Essay Preview: Key Steps for Writing a Business Plan and Preparing a Budget
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EXERCISE WEEK 10ACCT 5906KEY STEPS FOR WRITING A BUSINESS PLAN AND PREPARING A BUDGET AIM: This introductory exercise aims to introduce participants to the key steps in business planning and budgeting and to work in groups to exchange ideas about the topics. REQUIREMENTS: GroupYour group will be required to present your budget in class in week 10.You will be given around 5 minutes to present.You are encouraged to use handouts and/or posters and/or role plays. You do not need to use power points. IndividualEach student must either prepare his/her own budget for the business (see step 3 below), and have this ready to hand in at the start of class, or your group may hand in a group budget and all students in the group will receive the same mark. TASKS Participants divide into groups of 5-6 persons.Each team member introduces themselves to the team. In the group, the participants discuss and agree on the key tasks needed in the business planning process. Steps in business planning process –‐ Develop an idea for your business–‐ Do your research (customers, competitors, legal requirements)–‐ Write a business plan (includes timetable, funding sources, marketing plan) –‐ Evaluate the business plan–‐ Register your company–‐ Start a bookkeeping system–‐ Obtain the relevant materials/supplies/products etc.–‐ Implement your marketing plan [pic 1][pic 2][pic 3][pic 4][pic 5][pic 6][pic 7][pic 8][pic 9][pic 10]–‐ Start the production/service–‐ Make an Annual Report and Annual Accounts–‐ Make an evaluation and plan future development In your groups, you must undertake the following in preparation for your presentation (note, your budget should be the main part of your presentation); 1. Develop an idea for your business and a brief profile of your business The business profile describes your business, including its name, location and purpose/vision. It often also includes information about the business owners, such as their expertise, experience and education, and the vision of the business which will underpin the successful operation of the business. Summarise in 200 words: ∙  What’s the name of your business? ∙  What does your business do? ∙  What is your vision? Examples of vision statements ∙  There will be a personal computer on every desk running Microsoft software. (Microsofts original vision statement) ∙  Our vision is to be earths most customer centric company; to build a place where people can come to find and discover anything they might want to buy online. (Amazon.com) ∙  To build a community of coffee lovers in Sydney, by serving the best coffee at the best possible prices. (local café) ∙  Our salon will change the way you think about a haircut, and leave you glowing both inside and out. (local hairdresser) [pic 11]2. Products or services and market analysis The product or service and market analysis identifies, describes and analyses the products and services you offer, your target market, your market share and your competitors. Use this analysis to make decisions about pricing products and services and the location of your business. You must provide a quantitative description of the size of the opportunity for your business You must answer the following questions: ∙  Who are your customers? ∙  Who are your competitors ∙  What is your point of differentiation? (what makes you better than your competitors?) ∙  What is the size of your revenue opportunity? / how much sales can you expect to generate? Eg. if you plan to launch a new mobile phone, your opportunity estimate could look like this: o There are around 30 million mobile phone subscribers in Australiao Customers in year 1: 0.5% x 30,000,000 = 150,000 customerso Pricepermobilesold:$390o Estimated revenue in year 1: $390 x 150,000 customers = $58,500,000 Note: You should use the sizing of your revenue opportunity to develop your budget (see 3 below). 3. Cash Budget Your cash flow is the money you have coming in from revenue and going out for expenses. Good cash flow management will ensure you always have money available to pay your expenses when they are due. Use this analysis to develop the planned total sale and the planned total expenses for the next 6- 12 months. Consider the following questions: ∙  What resources do you need to run your business (e.g. staff, material, marketing, production equipment) ∙  How much will the resources cost? ∙  How much equity will be invested into the business? ∙  Are you cash flow positive in all months? ∙  If not, how will you cover the short fall? Task: Use the following Cash Budget template to complete a Budget for a 6 or 12 months period [pic 12][pic 13]January $ [pic 14]February $ March $ [pic 15]April $ May $ June $ Cash Inflows [pic 16][pic 17][pic 18][pic 19]Share capital Sales receipts [pic 20][pic 21][pic 22][pic 23]Total Cash Inflows [pic 24][pic 25][pic 26][pic 27]Cash Outflows [pic 28][pic 29][pic 30][pic 31]Material [pic 32][pic 33][pic 34][pic 35]Wages [pic 36][pic 37][pic 38][pic 39][pic 40][pic 41]Tax Overhead [pic 42][pic 43]Non-current assets [pic 44][pic 45]Total Cash Outflows Net Cash Flow [pic 46][pic 47][pic 48][pic 49]Balance brought forward [pic 50][pic 51]Balance carried forward See Chapter 15 page 507, in Bazley and Hancock for an example.