How do you see 2003? Are you terrified at the march of the multiples into independent territory? Or itching to get at the challenges ahead?
There is not much individually that one can do to untie the red tape or to level the playing field, but there is one ace that every independent has up his or her sleeve. It may sound like stating the obvious to point out that you actually own a business and, to a large degree, are therefore in charge of your own destiny.
But bogged down under the daily pressures and possibly with fewer staff than you could afford before the minimum wage days it is very easy to lose sight of the bigger picture.
One way to keep it in your sights is to write a business plan. The textbooks say that you should produce annually at least a one-year plan and preferably a five-year plan as well. We all know that theory and practice are two very different worlds but without a business plan you really are flying by the seat of your pants all the time. Even if you are not attempting to persuade the bank manager to lend you money, a business plan will clarify your aims, give you targets, and get your brain round where you want your business to go.
A business plan should contain three forecasts - cashflow, profit and loss, and balance sheet. The first thing to say about forecasts is that they are likely to be wrong. At best they are guesstimates. Clearly cash and profit are not the same thing. A cashflow forecast will help you budget income and expenditure and for day-to-day trading may be the most important one you do. A company in profit can go bust if it runs out of cash.
A profit and loss account compares income with expenditure. It should show you what level of gross and net profit you expect your business to produce. A balance sheet will show what you owe and what you own on any particular day, and a forecast balance sheet will project this picture to the end of a given period.
If you are intending to make this the year that you expand and given the low interest rates there is no time like the present then the business plan will be required reading by your bank manager. If you are only looking for a small amount of money, then you may not need to include a forecast balance sheet. And if you do need one, your accountant should be able to help.
Finally, remember that a business plan isn't set in stone. Naturally, if a property developer puts up a new housing estate nearby or if Tesco decides to move around the corner to you, these pluses or minuses should be written in. But there may also be many smaller events adding light and shade to your trading patterns, which is why an annual rewrite is a good idea.
This is my final column for The Grocer so let me take this opportunity to wish you plain sailing and to thank you for reading.
{{INDEPENDENTS }}
There is not much individually that one can do to untie the red tape or to level the playing field, but there is one ace that every independent has up his or her sleeve. It may sound like stating the obvious to point out that you actually own a business and, to a large degree, are therefore in charge of your own destiny.
But bogged down under the daily pressures and possibly with fewer staff than you could afford before the minimum wage days it is very easy to lose sight of the bigger picture.
One way to keep it in your sights is to write a business plan. The textbooks say that you should produce annually at least a one-year plan and preferably a five-year plan as well. We all know that theory and practice are two very different worlds but without a business plan you really are flying by the seat of your pants all the time. Even if you are not attempting to persuade the bank manager to lend you money, a business plan will clarify your aims, give you targets, and get your brain round where you want your business to go.
A business plan should contain three forecasts - cashflow, profit and loss, and balance sheet. The first thing to say about forecasts is that they are likely to be wrong. At best they are guesstimates. Clearly cash and profit are not the same thing. A cashflow forecast will help you budget income and expenditure and for day-to-day trading may be the most important one you do. A company in profit can go bust if it runs out of cash.
A profit and loss account compares income with expenditure. It should show you what level of gross and net profit you expect your business to produce. A balance sheet will show what you owe and what you own on any particular day, and a forecast balance sheet will project this picture to the end of a given period.
If you are intending to make this the year that you expand and given the low interest rates there is no time like the present then the business plan will be required reading by your bank manager. If you are only looking for a small amount of money, then you may not need to include a forecast balance sheet. And if you do need one, your accountant should be able to help.
Finally, remember that a business plan isn't set in stone. Naturally, if a property developer puts up a new housing estate nearby or if Tesco decides to move around the corner to you, these pluses or minuses should be written in. But there may also be many smaller events adding light and shade to your trading patterns, which is why an annual rewrite is a good idea.
This is my final column for The Grocer so let me take this opportunity to wish you plain sailing and to thank you for reading.
{{INDEPENDENTS }}
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