Barclays Business Plan

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So, you’ve got a fantastic idea for a business? Itching to get it off the ground? Or maybe you’ve just set up? We know that there’s an awful lot to cover when you’re starting out on your own.

This easy-to-use guide has everything you need to know, from the moment you’ve hadthat flash of inspiration (but aren’t sure what to do next), right through to the basics ofsetting up and running your business… and making it a success. It’s all in one placefor you to dip in and out of whenever you need to.

Make your business dream a reality

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Part 1 Before you begin: making plansWhether you’ve just had that lightbulb moment or are

about to get started, here’s how to plan your business.

Part 2Getting started: all your business needsThe lowdown on the practical side of getting started

and running your business: from managing your cash

and marketing to getting great staff on board and

protecting your business data, we can guide you in the

right direction.

Part 3How we can help youWhatever stage you’re at, we have business banking

solutions designed to help you every step of the way.

Part 4Useful contactsWho they are, what they do and how they can help you.

Part 5Jargon busterBusiness-speak made crystal clear.

Index

Terms and Conditions

Notes

Contents

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Starting your own business is an exciting time. But going solo is a big decision, so youneed to be certain that it’s what you really want to do – and that you’ll be able to see itthrough. We’re here to help you do just that.

This section will help you plan how to start your own business. It’ll run through thesteps you need to take, from assessing your great idea to getting your business plansorted. It’ll also be a useful recap if you’ve just set up and are keen to know you’vecovered the basics.

Where to find what you need:

Strengths and weaknesses 7Looking at your business idea.

Nuts, bolts and business plans 9The first steps: research and planning.

What’s in a name? 12Tips on how to choose a great one for your business.

Home or away? Your business location 13Where to find the right place to set up your business.

Owning a business: The choices 14The ways you can buy and own a business.

Starting up: Help when you need it 16What you’ll get as a Barclays business customer.

Before you begin: making plans

At every stage, we’re here to give you the practical

advice and support you need for your business

to grow. For expert advice, and to make an

appointment with a Local Business Manager,

just call 0800 515 4621

or visit www.barclays.co.uk/localbusiness

There’s no business like yours

1: For terms and conditions, please turn to page 87.

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“I’ve got the idea, skills andenergy to start my own business. I just need a hand to put it all together”


Your passion and enthusiasm will go along way to making your business ideaflourish. Here are some other practicalsteps you can take before you start yourbusiness to develop your idea further.

Time for homeworkResearching your idea and potential competitors could

make all the difference when you launch and market

your business later. So think about:

• How many other businesses offer the same service

or product? A flick through your local directory will

give you a basic idea, or visit www.yell.com

• Is it practical to pursue your idea?

• Has your idea already been developed by

someone else?

• How is your idea original or better than existing

products or services?

Preliminary planning: do a SWOTNow it’s time to look at your idea in a bit more depth.

What might help you at this early stage is to create a

simple, clear snapshot of what you can deliver, and to

find out if others will be as enthusiastic about your idea

as you are. You can do this with a SWOT analysis.

What’s a SWOT analysis?A SWOT is a quick way of finding out how workable a

business idea is by analysing its internal strengths and

weaknesses (S and W) and matching these to its

external opportunities and threats (O and T). Putting

these facts and ideas into one place will let you see the

bigger picture at a glance. Here’s a step-by-step guide

how to do it:

1. Create a template on a page like the one above,

labelling each section: strengths, weaknesses,

opportunities and threats.

2. In the top left section, fill in all the strengths of your

idea, yourself or your workforce. Think about

questions like:

• What are you best at? For example, are you strong

on customer service?

• What’s unique about your idea?

• Is your product or service exclusive to you?

• Have you got access to a skilled and

innovative workforce?

Strengths and weaknesses

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Before you begin

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3. In the top right section, write down your

weaknesses, or areas where you think your business

may be exposed. Think about these types of issues:

• Will you or your workforce be adequately skilled

from day one?

• Are your resources sufficient? For example, people,

money and assets.

• Will you be able to provide strong leadership?

• Will your marketing make your product or service

stand out from the competition?

4. Next up is opportunities. These are the factors

that define how successful your business could be.

So, in the bottom left section, note your thoughts on

things like:

• Can you see an existing demand for your product

or service?

• What niches have you spotted that your competitors

have missed?

• Is there room for a new player?

5. And last of all, in the fourth section, list any threatsto the success of your business:

• Could new competitors come into your market?

• Is your product or service likely to become out

of date?

• Are you based in an area with a high concentration

of competitors?

• Is there a danger your customers could bypass

you and go direct to your suppliers?

The results of your SWOTNow you’ve got your SWOT profile, spend time thinking

about how to make the most of the positives and

mitigate your weak areas or threats (for instance,

training to improve your skills).

The next section on researching your competitors,

customers, and your product or service will help

prepare you for writing your business plan so you

can get stuck in to the practical side of setting up

your business.

Just think: you could be the proud owner of a

successful business all because you pursued your

great idea. And we’re here to help you. For business

advice and to make an appointment with a Local

Business Manager, simply call 0800 515 4621





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Before you begin

Starting your own business is exciting, and it’s tempting

to jump in and do it as soon as you can. But to maximise

your chance of success, it’s key to do your research and

have a solid business plan in place first. Approach an

accountant for advice so you know you’ve covered all

you need to.

Research: The lowdownResearch will form the basis of your business plan.

Once you know your product or service and your

competitors and customers inside out, you’ll be closer

to understanding how to make your business a success.

There are plenty of resources out there to get you the

information you need. Take a look at our tips below.

Why research?Research will get you to focus on:

• your product or service

• your price

• your market and your competitors

• your customers

• your location.

Research:Where to lookBarclays Business Opportunity ProfilesThese give you all the latest information on almost any

market you can think of. To get your free copies, just visit

www.barclays.co.uk/localbusiness or ask one of our

Local Business Managers.

Nuts, bolts and business plans

Your competitionVisit your competitors’ shops and websites, or ring them

up (or get a friend to do it for you). Note their prices and

the service you receive, and check out whether they’re

prepared to offer you any deals in order to win your

business as a customer.

Trade publications, industry organisations and marketresearch companiesThese can help you find out the size of your market and

whether it’s growing or in decline. Your local library and

the Internet are also great places to look for current

information on your market.

The InternetYou can also use the Internet to find customer

comments on a specific product or service. Website

users often post reviews online about the service of a

particular business, which can give you a valuable insight

into what your potential customers like (and don’t like)

about your competitors.

Local business support organisationsFor instance, Business Link or Enterprise Agencies

can also give you lots of useful facts. See our list of

Useful contacts to find out how you can get in touch

with them.

Your customersBefore your business is up and running, ask your

potential customers what they think about your product

or service. And remember that your competitors will be

checking out what their customers think as well, so it’s

vital that you have your finger on the pulse.


Part 1

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Your business plan: an overviewYou might want to be a market leader or just earn

a good living doing what you enjoy. Writing a business

plan will get you to work out your goals and will be a

useful monitor to check your progress against on a

regular basis. Plus, it’s crucial to have one when you’re

talking to potential business advisors or backers,

especially if you’re looking to borrow money.

Why is a business plan essential?• It’ll help you to set out clear goals and how you

can achieve them.

• It’ll help you to live and breathe every detail of

your business idea and make sure you cover all

you need to get off to the best possible start.

Focus on your business planOnce you’ve done your research, take a look at the

business plan template we’ve included at the back of

this guide. The questions set out over the next two

pages will help prepare you to fill it out.

Insider knowledgeWhen you write your business plan:

• Be clear about your objectives – why are you writing

it and who are you writing it for?

• Keep it short and to the point, and use research to

back it up

• Get it checked – ask a family member, business

partner or business advisor to read it and point out

if anything’s unclear

• Write an action plan – prioritise what you have to do

to achieve your goals

• Be flexible – what you want to achieve might change,

so be prepared to adjust your plan as your business

idea develops.

Expanding on what you’ve covered in your SWOT

analysis, here are some questions to think about when

you write your business plan.

Making your product or service stand out• Do you stand out from your competitors?

• What makes your product or service better?

• Are you targeting consumers or other businesses?

Deciding your price• How much will you charge?

• Are you aiming to be the cheapest around?

• Are you looking to be more exclusive and expensive?

• What do your competitors charge? It’ll give you an

idea of what your customers are willing to pay.

• Can you compete with them on more than price

alone? Your customers will be looking for quality

as well as value.

Knowing your market and the competition• How much do you know about your market?

• How much competition will you face?

• Is this market growing or is demand declining?

• Have you researched your competitors, what they

offer and how much they charge?

• What do you think their weaknesses are?

• Have you called them up and checked out their

premises to see what their customers see and the

service they receive?


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Before you begin

PeopleWhether or not you need to employ people as soon as

you set up will depend on the size of your business and

what it does. Employing staff will increase your initial

costs but, on the other hand, the right people can make

all the difference to your success.

You’ll also need to be familiar with employment law

on areas like tax, equal opportunities and National

Insurance. You can find more information about these

in Getting started. Your Local Business Manager can

also put you in touch with local specialists, such as a

solicitor, who can advise you on the technical ins and

outs of employment law. Our Barclays Business

Essentials packages and Barclays Business Manager

software can help you, too. For more info, just turn

to page 68.

Did you know?With Barclays, you get access to free professional

advice with our Team of Experts, which includes

accountants, solicitors and marketing consultants.

They can get you up to speed on the issues you’ll

need to think about when you run your business.

Just ask a Local Business Manager for details.

Your customers• Who do you want to sell to?

• How many will you need to cover costs and make

a profit?

• How will you reach them?

• What do you know about them and their needs

(age, gender, what they earn, what they like,

their personality)?

What else do I need to think about?MoneyYou may need some cash to get your business off the

ground. We can help you to factor everything in (like

your existing financial commitments) to work out what

you’ll need. There are several options to fund your

business. These range from grants, loans or even

money from your friends and family. You can find

more about these on page 24.

Once you’re up and running, another vital aspect of

your business finances will be managing your cash flow.

Doing your sums will help you figure out what money is

coming into and going out of your business. You’ll find

more about cash flow on page 31. And remember: we’re

here to help you, too. If you need advice on the best

way to fund your business, we’re with you all the way.

If you need a hand filling out the business plan

template, just ask one of our Local Business Managers.

To make an appointment, call 0800 515 4621 or visit

www.barclays.co.uk/localbusiness




Part 1

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Coming up with a name makes startingyour own business feel real. The name youchoose will put across the kind of imageyou want your business to have, and itneeds to stick in your customers’ minds.

Here are some ideas to help you choose a name• Make sure that the name you choose is easy

to pronounce

• Be careful that it doesn’t already belong to another

business in your market. Look in the Yellow Pages or

Thomson Local, and type it into www.google.co.ukand see what comes up

• Try out the name(s) you’re weighing up on your

friends and family – think of them as your potential

customers. This should help guide your decision

• How does it look? Imagine it on your business cards,

signature and stationery – does it still work?

• Does it translate well in other countries? If you

eventually take your product or service to markets

outside of the UK, you don’t want to end up saying

something you really shouldn’t

• Make sure that the name you choose doesn’t restrict

any potential future growth. For example, if it only

reflects a specific product or service it might be difficult

to successfully introduce a new product or service to

your business

• Think about how it could work as a web address

(for information on how to set up a website, turn

to page 57).

Naming a limited companyIf you run your business as a limited company, there are

certain restrictions on the business name you can use:

• You can’t register the same name as another

company, so check the index of company names

held at Companies House or search on their website

(www.companieshouse.gov.uk) for existing

company names. Using certain words is restricted,

and you can’t use a name that might cause offence

• You must display the company name outside all

premises so that it can be easily seen and read.

It also needs to be printed on all company

publications, including business letters, cheques,

invoices and notices. The company’s place of

registration and registered number must also be

displayed on business letters and order forms. The

company’s directors and secretary could be fined

if the business name is displayed incorrectly

• The letters ‘ltd’ or the word ‘limited’ must be

displayed after the company name. If your business

is a company limited by guarantee, you can choose

not to include ‘limited’ in its name, but you’ll need to

state that it’s a limited company on business letters

and order forms. Welsh companies can use the

Welsh equivalents

• Any business can use a trading name that is different

to its registered name, but the registered name must

be disclosed on company stationery such as

letterheads and invoices.

Turn to page 15 for more information on setting up a

limited company.

What’s in a name?


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Before you begin

Working awayHere are some tips for when you’re checking out

potential locations:

• Make sure it suits the purpose of your business

(for instance, that it has enough space for displaying

your wares or enough customer parking)

• Choose a location that customers, suppliers and

staff can get to easily

• Work out what your running costs will be each

month (rent or mortgage, phone, electricity, etc)

• Look out for competition in the area

• Check whether any grants are available for the area

you’re looking in. For more on grants, turn to page 25

• If you’re going to buy premises, read Property and

your business, our free guide to buying a business

property. To get a copy, just ask one of our Local

Business Managers

• Get legal advice before you enter into any agreement

to rent or buy premises.

Home or away?Your business location

Once you’ve got the ‘what’ of yourbusiness, you need to think about the ‘where’.

Working from homeStarting your business at home could be the easiest and

least expensive option, but you’ll need to make sure that

it’ll work for you. You may need willpower to resist

distractions. Also, remember you’ll need to find out from

your mortgage lender, home insurance provider, landlord

or local authority if there are any restrictions on running

a business from your home.

Insider knowledgeIf you’re working from home, set yourself goals every

day and reward yourself if you complete them – say, pay

yourself a bonus or take an afternoon off at the end of

each month. It’ll keep you motivated and help you to

work more efficiently.

Did you know? Once you’ve got your premises sorted, we can give

you the insurance cover you need to protect it. Just

ask one of our Local Business Managers for details.

We’ve linked up with professionals in lots of different

areas so we can help you get the know-how and

skills you need to make your business a success.

For instance, we run seminars where you can get

practical advice from the experts. Turn to page 66

to find out more, or go to

www.barclays.co.uk/seminars

Did you know?


Part 1

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What kind of business will yours be:completely new or based on one thatalready exists? How will you run it – as asole trader or through shared ownership?In this section we’ll go through the keyfacts, pros and cons of the different waysyou can own a business. For more adviceon what’s best for your business, talk toan accountant.

Starting from scratchBuilding your own business from the ground up can be

incredibly satisfying. But while you’ll have the freedom

to do exactly what you want, the downside is that you

might not have other people around to bounce ideas off

of. Plus, there will be more work for you to do at the

outset than if you buy an already established business.

Buying an existing businessThe attraction of buying a business that’s already set up

is clear: the structure will already be in place, you’ll know

how it was run in the past and it’ll have an established

customer base. You might need more money upfront to

buy it, but a lot of the legwork will have been done for

you. However, when you buy a business, you buy its

existing reputation – good or bad. So, make sure you

know what people think of the business before you buy

(survey existing customers, for example) so you

understand the best way to approach your marketing.

Buying a franchiseBecoming a franchisee is an increasingly popular way

of going into business. You have the support and

reputation of an established company behind you, and

to some degree you’re your own boss. The downside

is that often you won’t have the freedom to change

the product or service. And bad publicity surrounding

any other franchise will have a knock-on effect to

your business.

Owning a business: the choices

You can find more information on how to buy a

franchise in our free guide Franchising and your

business. To get a copy, just speak to one of our

Local Business Managers.

Did you know?


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Before you begin

Choosing how to own your businessSole traderPut simply, this is a business owned, developed and

managed by one person. You might employ other

people, but the business is yours and doesn’t exist as a

separate entity (like a limited company does; see right).

Some of the advantages of being a sole trader are that

you don’t have to register your business at Companies

House, which saves time and money, and all the profits

made by your business will be yours. The disadvantages

are that you’ll be personally responsible for any debt you

incur, and you’ll also need to tell the income tax and

social security authorities that you’ll be working for

yourself – you’ll be taxed on your annual profits. If you’re

going to work on your own, becoming a sole trader

could be your best option.

PartnershipIf there are other people involved in your business idea,

you might look into setting up as a partnership. It’s

similar to being a sole trader, except that all of the

costs and profits are shared between the partners.

A partnership can also mean that the work and

responsibility are equally shared, which can take some

of the pressure off you. It’s a smart move to draw up a

partnership agreement, though, so that you protect

your own interests as an individual. A solicitor can help

you do this (see page 54 for tips on finding a solicitor).

Limited companyAs a director of a limited company, you won’t be

personally responsible for your business debts, as a

company is a separate entity from its owners. This

means that your personal assets won’t be at risk if

you can’t pay back the debt. Plus, you can also take

advantage of tax breaks, and you’ll pay yourself a salary

just like any other employee. You might need to ask an

accountant to help you.

On the downside, it’ll cost more to set up at the start,

as you’ll need to register as a company with Companies

House and submit regular financial statements (see

www.companieshouse.gov.uk for details).

Steps to set up a limited companyUsually when you set up a limited company you’ll go

to a specialist, such as an accountant or incorporation

agency, to help you. But if you want to do it yourself,

here are some of the steps you’ll need to take:

1. Download the documents you need to fill out

(Memorandum of association, Articles of association,

Form 10 and Form 12) from the Companies House

website (www.companieshouse.gov.uk).

2. Complete the documents – a solicitor or accountant

can help you.

3. Send them in to Companies House with the fee

(currently £20). Or, if you’re registering a new

company, complete and submit them online; the

company will be set up within 24 hours, whereas it

can take five or six days using paper forms.

4. Once the documents have been checked (including

that none of the prospective directors are on the

Disqualified Directors Register), the Registrar of

Companies will issue a Certificate of Incorporation

and your company can start trading.


Part 1

16

Now it’s time to put everything togetherand get your business up and running.We’re here to make the whole job ofgetting your business started easier for youfrom the day you set out, and we can keephelping you for as long as you need it.

Our comprehensive range of businessbanking and support packages isdesigned to give your business a solidfoundation. To find out more, turn to theHow we can help you section.

Business Start-up packageWith our Business Start-up package you’ll get the

support and flexibility you need to run your business

the way you want:

Support dedicated to your businessYou’ll get your own Local Business Manager. Based

locally, they know the area and marketplace, as well

as the ins, outs, ups and downs of starting a business.

A helping handOur Local Business Managers are backed up by our

dedicated Local Business Support team outside working

hours and if your Manager is with a customer.

Flexible business banking Bank exactly how and when you want to – in a branch,

online or by phone.

Starting up: help when you need it

Comprehensive productsAccess a wide range of competitive products to help

you get started, as well as for your everyday business

banking needs. Plus, you can get up to 12 months’ free

day-to-day banking transactions2 and business loans

(subject to application and status) to give your business

a funding boost.

Even more advice and support• Free 45-minute marketing consultation with an

Enterprise Agency advisor

• Free 45-minute consultation with

an accountant

• Free 30-minute consultation with a local solicitor

who specialises in business law

• Access to our nationwide series of exclusive

seminars and events

• Free 24-hour legal and tax helpline3

• Helpful market information through our free

Business Opportunity Profiles and Business

Information Factsheets.

2, 6: For terms and conditions, please turn to page 87.


17

Before you begin

We’ve linked up with thousands of professionals

in the community who can give you practical

advice and support to help get your business off

to the best start. For details, talk to one of our

Local Business Managers, call 0800 515 4621



Barclays Business Essentials PlusBarclays Business Essentials Plus is a business banking

and services package that offers you even more benefits

to help you develop your business and skills, giving you

the best chance of success.

The package includes tools worth more than £1,2004,

as well as free everyday banking transactions for up

to 18 months2.

What you’ll get• All the benefits of our Barclays Business

Start-up package

• Free banking extended to 18 months2

• Business Planning software

• Marketing Planning software

• Business and software skills courses

and videos

• QuickBooks Pro book-keeping software

• Free face-to-face software training.

Barclays Business Essentials Based on the tools and services that successful

businesses use, our Barclays Business Essentials

package can help you lay down the best possible

foundation for your new business.

You’ll enjoy all the benefits of our Business Start-up

package, with free everyday banking transactions

extended to 18 months2 and more than £700 worth

of essential business software and services4 that will

make running your business easier and more efficient.


Start-up package


• QuickBooks SimpleStart or Sage Instant

accounts software




and videos.

1, 2, 4: For terms and conditions, please turn to page 87.


Part 1

18

Barclays Business ManagerBarclays Business Manager software combines all the

benefits of our Barclays Business Start-up package to

give you an all-in-one business banking solution. With

more than £2,0005

worth of essential business software

and services, it’s designed to give your business the very

best support and boost its performance.


Start-up package





and videos

• QuickBooks Pro or Sage Line 50

book-keeping software

• Employment and Health & Safety compliance service

• Free face-to-face software training.

Come and talk to usWe want to work with you to see your business as you see it, and to make sure it reaches itspotential. A Local Business Manager will meet with you to talk about what you want from yourbusiness so that we can understand what’simportant to you and give you the right support.

You’ll discuss:• how you want to do your banking and what

your financial needs are (to find the right loan,

savings accounts and insurance, for example)

• how you want to make business purchases

and receive payments

• how you want to keep track of your

business finances

• what advice you expect to get, and when you

expect to be able to get it

• how you want help with marketing; to win

customers; to get the best deals from your

suppliers; to keep track of stock; and to attract

and hire top-quality staff.

Insider knowledgeWhen you come in to open a new bank account,

remember to bring in the necessary ID and paperwork

so we can check who you are. What you’ll have to bring

depends on the type of business you own – turn to

page 73, go to www.barclays.co.uk/localbusinessfor details or call 0800 515 4621.

If you’re an owner of a limited company, involved in

a limited liability partnership or a company registered

outside the EU, contact Barclays to find out what you’ll

need to produce by calling 0800 515 4621.

1, 2, 5: For terms and conditions, please turn to page 87.


““

19

Before you begin

Real-life storyAfter 27 years as a florist, Lila McKnight decided she

wanted a change and opened her own patisserie. She

found the help of her Local Business Manager invaluable.

She says: “I talked to friends in the restaurant business

and got some great advice from them, but Andy

Robson, my Local Business Manager in the Southwark

branch, has been wonderful. He helped me find book-

keeping services, as well as the money I needed to

make it happen. It’s taken about two years to set up my

new business, and without Andy it would have been so

much harder to achieve. I believe in talking to my bank

manager face-to-face, and that’s what I got from him.

He’s always available when I need to see him or speak

to him. Even now, if I have a financial question or

problem, he takes care of it.”

Lila McKnight, winner of the Business Plan Awards 2005

and Barclays business customer, Southwark.

Becki Train, managing director of event and conference

management company Events Northern, and category

winner of the Handbag.com and Barclays Business Plan

Awards, gives her top 10 tips for starting a business:

1 Think long and hard before taking the plunge

2 Consider working two jobs while you become

established, to help solve money worries

3 Spend time researching the market, your

competitors, potential clients and customers, etc

4 Write a thorough business plan – and try to update

it regularly

5 Get professional advice from Business Link and other

business support agencies, as well as accountants,

solicitors, etc

6 Talk to people about your ideas and plans – never

miss an opportunity to network

7 Set up a website and email address straight away –

many people will rely on the Internet to find you and

it looks more professional

8 Try and secure as much press coverage and interest

locally through a marketing push to announce that

you’re in business

9 Stay positive and enthusiastic – what could be better

than being your own boss and doing something that

you enjoy?

10 However busy you are, always remember to take

some time out – take a weekend off from it all or

even just have a bath and chill out at the end of

the day!

We’re here to make sure that your business stays

on the path you want it to. Call 0800 515 4621

or visit www.barclays.co.uk/localbusiness to

make an appointment with one of our Local

Business Managers.




20


21

By now, you’ve got a taste of what’s in store for you when you set up your ownbusiness, and it’s time to put your plans into action. Or perhaps you’ve already set up and you want to help your business start to grow. Either way, we can help.

In this section, you’ll find the practical information you need to make your business a success. From taking care of the financial side of running your business and making the most of networking to being aware of your tax and legal obligations, it’s all here to help you when you need it.

Getting started: all your business needs

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Part 2

22

Where to find what you need:

FinanceMoney 24To get your business going

Books 29Keeping the paperwork in order

Doing the sums part one 31Planning and managing your cash flow

Doing the sums part two 35Forecasting profit and loss

Stock 36Taking control

PeopleMarketing 38Go on, be a show-off

Customers 40How to keep them coming back

Suppliers 42Setting up great relationships

Finding the right staff 43All together now

Networking 45It’s all about who you know

AdminTax 48Prepare for what’s ahead

Insurance 51Keep your business safe and sound

Staying legal 53Rules and red tape

Trading licences 55Will you need any?

Trademarks and copyright 56Keep it unique

Technology 57Getting up to cyber speed

The futureBusiness health checks 60Keep an eye on success

With Barclays, you get the help of a Local

Business Manager at every step. Just call

0800 515 4621 to make an appointment





Finance


Part 2

24

When you start and run your ownbusiness, you’ll be thinking about money.It’s the lifeblood of any business, andwe’re here to help you take control.

How much will you need?Firstly, figure out how much money it’ll take to get your

business off the ground and to keep it running. Ask

yourself the following questions.

Your business costs• How much of your own money do you have to

invest in the business?

• What equipment do you need to buy and how much

will it cost?

• Will you run your business at or away from home?

Remember, if you run it from home your house

expenses, like electricity and phone, will go up, so

work out the cost of your monthly overheads.

• Do you need to employ people? How much will it

cost you each month?

• Do you need a vehicle to run your business?

Remember to factor in the monthly cost of servicing,

insurance and tax, as well as the cost of petrol.

• Are your annual sales going to be over the VAT

threshold? If they are, you’ll need to be VAT

registered and put money aside each month to cover

the cost of the bill. Turn to page 49 for more on VAT.

• How are you going to manage your books? If you

opt for a book-keeping software package or an

accountant, make sure you budget for fees.

• Are there any other costs you’ll have to cover straight

away, like solicitor’s fees, company registration and

marketing costs? How much will they be? Will they

be ongoing?

• What tax will you need to pay? Just how much will

depend on your business status (ie whether you’re a

sole trader, limited company, etc). You can find out

more about this on page 48.

Sources of fundingWhen you’ve worked out how much you need, you then

need to work out the best way to get funding. Some of

the main sources of funding are:

1. personal savings

2. grants and awards

3. borrowing.

In this section, you’ll find an outline of each and their

pros and cons, as well as a summary of some of the

other options available. If you’re not sure what some

of the words and phrases mean, our Jargon bustercan help you.

Money:to get your business going

You can find more about how to get the right

funding for your business in Finance and your

business, one of the free guides in our Efficient

Business series. To get a copy, just ask your Local

Business Manager.

Did you know?


25

Getting started

2.Grants and awardsGrants are usually one-off payments which are provided

to fund specific costs, like marketing. Awards recognise

achievement and can often give you publicity as well as

financial support.

Grants and awards are more often available to you if:

• you’re just starting your business

• you’re a younger entrepreneur

• your business is in an industrial area with

above-average unemployment

• your business is in a rural area.

What’s available?• Local support – Local Enterprise Agencies (LEAs) run

a range of schemes that usually includes financial

support as well as business planning and training.

• Regional support – Regional Development Agencies

(RDAs) give grants for regeneration in rural areas

throughout England.

• Government support – The Department of Trade

and Industry (DTI) offers support if you’re starting

a business or are involved in technology, research,

development and international trade.

• The Prince’s Trust – provides support if you’re

starting a business, are aged 18-30, and are either

unemployed or want to fulfil your potential.

You can find contact details of all these organisations in

the Useful contacts section at the back of this guide.

1. Personal savingsYou can use your own money, from savings or

investments for example, to invest in your business.

It can be a useful way to get your business going in the

early days. Plus, investing some of your own cash will

show people that you’re committed to your business.

You should also think about whether you need to invest

all your money or keep some in your savings. Having

spare cash on hand can sometimes be a real help if

things get tough.

What’s available?It’s up to you.

The pros and cons Personal savings

Pros• It’s there, waiting to be used, which will save

you the hassle of looking for other investors

• If you’ve got enough of your own cash to start

your business, you won’t be in debt to anyone

and your business will be in the black from

the outset

• The size of your loan might be smaller if you

do need to borrow more cash to get your

business going.

Cons• You might lose your money if your business

doesn’t do as well as you expect.


Part 2

26

The pros and cons Grants and awards

Pros• Grants and awards don’t normally need to

be repaid

• They can give you the cash you need when

other sources aren’t available.

Cons• Grants, awards or support packages aren’t

available to everyone and can be hard to get

• They could be limited to projects that back

up the aims of the organisation giving the

grant or award.

3. BorrowingThere are several ways to borrow money to start

and grow your business. These are some of the

main options:

• Business overdrafts

• Loans

• Borrowing from family or friends

Business overdraftsBanks offer business overdrafts as a form of short-term

finance through a business current account. They’re a

good way of covering any fluctuations of money coming

into and going out of your business.

A business overdraft is best for when you need to get

some working capital into your business each month.

The pros and cons Business overdrafts

Pros• They’re flexible – you only pay interest on the

money you use

• They’re useful for your daily business needs, like

buying stock.

Cons• You usually pay higher interest rates than

on loans

• They aren’t really suitable for funding bigger

purchases, like equipment or vehicles, or

for longer-term borrowing.

LoansLoans are designed to help you buy equipment and

supplies for your business. They are best if you need to

buy fixed assets, such as machinery or office equipment,

where the amount you need isn’t going to change.

Your Local Business Manager can guide you on

the best way to get finance for your business or

arrange the actual finance itself.

To make an appointment, just call 0800 515 4621

or go to www.barclays.co.uk/localbusiness




27

Getting started

The pros and cons Loans

Pros• You might be able to set a fixed amount to

repay each month at the outset, which makes

budgeting simpler

• You can sometimes take advantage of repayment

holidays, which means you can use your purchase

before you have to make repayments on the loan.

Cons• You might need to provide security for

larger loans

• You could have to pay an early repayment charge

on some loans if you repay before the end of the

agreed term.

Insider knowledge Keep your cash-flow projections and business plan up

to date so they’re available when you need to apply for a

loan – it should make the whole process faster and easier.

Info you’ll need to provide when youborrow moneyDepending on how long you’ve been in business, and

whether you already bank with Barclays, you’ll normally

need to show us:

• your business plan, which sets out your

business goals

• three years’ trading accounts (less if it’s a new

business), with profit and loss and balance

sheets included

• a personal budget planner showing your personal

assets and liabilities

• what you expect your business to make and spend

over the next year

• your personal bank statements for the last six months,

if you don’t already bank with Barclays.

Monthly loan ready reckonerUse the table below to calculate roughly how much

a typical loan might cost you each month:

1. Choose the relevant term and interest rate from

the table and find the amount that meets between

the two.

2. Multiply this amount by the amount you want

to borrow.

3. Divide this by 1,000.

So, if you were to borrow £15,000 over five years at an

interest rate of 8%, your monthly repayments would be

about: £20.28 x £15,000 / £1,000 = £304.20 a month.

Term 1 year 3 years 5 years 7 years 10 years

Rate

5.00% £85.61 £29.97 £18.87 £14.13 £10.61

6.00% £86.07 £30.42 £19.33 £14.61 £11.10

7.00% £86.53 £30.88 £19.80 £15.09 £11.61

8.00% £86.99 £31.34 £20.28 £15.59 £12.13

9.00% £87.45 £31.80 £20.76 £16.09 £12.67

10.00% £87.92 £32.27 £21.25 £16.60 £13.22

11.00% £88.41 £32.77 £21.77 £17.15 £12.81

12.00% £88.88 £33.25 £22.28 £17.69 £14.39

13.00% £89.35 £33.73 £22.79 £18.23 £14.98

14.00% £89.83 £34.22 £23.31 £18.79 £15.58

15.00% £90.31 £34.71 £23.84 £19.35 £16.19

Please note: • This table is for information purposes only and shouldn’t be seen

as advice or commitment of any lender to provide funding. Anyfigures are not a quotation; they provide an illustration of thepossible repayments.

• The figure provided shows capital and interest loan repayments inmonthly instalments with interest applied to the loan each month.

• No fees are included in the calculation.

Monthly loan ready reckonerThis is how much you’ll roughly pay each month for

every £1,000 you borrow.


Part 2

28

Other optionsHere’s a rundown of some of the ways you could get

finance into your business after it’s been running for a

while. You can also talk to your Local Business Manager

about what could be available for your business.

Sales ledger financingSales ledger financing companies (also known as

factoring companies) give you cash by paying you in

advance any amount your customers owe you. They

then charge you interest on this amount, and collect the

outstanding money from your debtors so they can be

repaid what they’ve funded.

Leasing or hire purchaseHere you make regular payments, for a fixed period

of time, to use something like a property, a vehicle or

equipment. The difference between the two is that with

leasing, you never actually own the asset, while with a

hire purchase, your business owns the asset once you’ve

made all the payments.

Retained earningsRetained earnings are the money made by your business

after all its expenses have been paid. Instead of being

given out to the shareholders, they’re kept within the

business to give it extra working capital, or to buy

equipment or assets.

Equity or shareholder fundingThis is money that’s put into your business by you

or external investors (for example, private investors,

business angels, venture capitalists or corporate

investors). If your business is a limited company,

the money is exchanged for shares and is called

‘shareholder capital’. It’s best suited to you if your

business is growing or if you’re planning to grow

it quickly. We want to help you find the right finance so your

business can prosper. Turn to page 64 for details

on how we can help make your business a success.

You can also call 0800 515 4621 to make an

appointment with a Local Business Manager,



Borrowing from family or friendsA loan from a friend or family member can be a great

way to get both short- and long-term finance for your

business. If you do go for this option, it’s a good idea

to get everything down in writing to avoid any

misunderstanding later on.

This is a useful option for any business, especially if

you’re just starting, as it could provide the boost your

business needs to give you more flexibility.

The pros and consBorrowing from family or friends

Pros• They’re less likely to need security to guarantee

that you repay the loan

• Any profits your business makes will stay within

your family or friends.

Cons• If there’s a misunderstanding or you don’t pay

back the money on time, you could put pressure

on your relationships

• Your family or friends could lose the money if

your business doesn’t do as well as you expect

• Family members or friends who help you out

with a loan might expect to have more hands-on

involvement in your business than you’d like.



29

Getting started

Book-keeping helps you manage yoursales, profits and cash: the three essentialareas that determine whether yourbusiness is going to succeed.

Introducing book-keepingJust as they say business and pleasure don’t mix, the

same goes for your business and personal financial

records. If you keep them separate, you’ll know where

your business finances stand, and it’ll make it easier to

complete your income tax returns.

The ‘books’ you need to keep include:

• cash books

• balance sheets

• wages book (if you employ people)

• sales records

• purchase records.

Of course, you’ll also want to know when your business

is (or isn’t) making a profit. You can do this using a

profit and loss forecast. See the insert at the back of

this guide for more help on how to do this.

Introducing cash booksYour cash book is the place where you record receipts

(money you’ve been paid) and payments (money you’ve

paid) each day. It shows you how each of these are

settled (for example, by cash or cheque). Your cash

book should also match your bank statement.

Introducing balance sheetsYour balance sheet is a snapshot that shows how much

your business is worth at any one time. It details what

assets your business owns and deducts what your

business owes (known as ‘liabilities’). It also gives you

a good idea of how solvent your business is and how

it’s financed.

Introducing wages booksIf you employ staff you’ll need to record what you pay

them, as well as their National Insurance Contributions

(NICs). HM Revenue & Customs (HMRC) requires all

employers to calculate NICs either monthly or quarterly.

Did you know?There are different ways you can manage your books,

from manual paper-based systems, to getting a

specialist to do the slog for you. One cost-effective

and simple method is to use an automated software

product, such as Barclays Business Manager. It’ll

make your tax returns easy to complete and save you

time. Turn to page 68 to find out more, or take a look

at https://bbm.clearlybusiness.com/businessmanager/demos to see how easy it can be.

Books: keeping the paperwork in order


Part 2

30

Insider knowledgeIf your business is a limited company or partnership

whose members are a limited company, you’ll need

to submit balance sheets to Companies House

(www.companieshouse.gov.uk), HMRC

(www.hmrc.gov.uk) and any shareholders. Check out

these websites for more info or get in touch with a

solicitor for advice.

Introducing sales recordsIt’s important to record all your sales to customers month by month, and to split them into ‘sales unpaid’ and ‘sales

paid’. This way, you can see easily what’s owed to you and how quickly you were paid. Number your invoices in

sequence so that each one is easy to identify. Here’s an example:

Own Date of Supplier’s Invoice Net VAT (if Gross DateReference purchase name number total charged) total purchase paid

156 2.8.05 Company E LB143 160.00 160.00 26.8.05

163 3.8.05 Company F H1267 100.00 17.50 117.50 26.8.05

172 11.8.05 Company G 131-05 25.60 4.48 30.08 11.8.05

176 15.8.05 Company H 145-63 373.35 65.34 438.69 15.8.05

Introducing purchase recordsYour purchase records should have separate files for paid and unpaid invoices. This means you’ll be able to see what

you owe. Always remember to ask for an invoice or a receipt for your records. Here’s an example:

Date of Customer’s Invoice Net VAT (if Gross Sales Salesinvoice name number total charged) total paid unpaid

5.8.05 Company A 1563 560.00 98.00 658.00 8.8.05

9.8.05 Company B 1564 421.00 73.67 494.67 9.8.05

10.8.05 Company C 1565 1089.95 190.74 1280.69 Unpaid

17.8.05 Company D 1566 200.00 35.00 235.00 25.8.05


31

Getting started

““For you to stay afloat, the money flowing into your

business needs to be the same as – and ideally more

than – the money flowing out. This is called cash flow,

and you can keep track of it by monitoring your ‘receipts’

and ‘payments’:

• Receipts include money you make from selling your

product or service, bank loans, money you’ve put into

the business yourself (for example, savings), money

you’ve made from selling assets (like a company van),

and cash used to buy a share in your business.

• Payments include cash paid for buying supplies and

covering expenses, repayments for loans, the purchase

of assets (such as a computer), as well as VAT, PAYE,

National Insurance Contributions and wages.

If the money coming into your business is less than the

money leaving it, your business will fail in the long term.

In the short term, you need to have enough cash on

hand to pay bills.

Doing the sums part one:planning and managing your cash flow

Real-life story Finisterre is a growing business which provides apparel

for surfers. Based in St Agnes, Cornwall, it needed help

to manage its finances, accounting and cash flow easily

and efficiently.

Tom Kay, founder and Managing Director of Finisterre,

says: “We’ve been in business for a little under three

years and as we’ve grown, so has the complexity and

importance of financial planning and the administration

that we have to undertake. We use the Barclays

Business Manager package on a weekly basis to help

control our cash flow, stock levels, and manage our

customer and supplier relationships. The financial

reporting facility for a wide variety of scenarios is an

excellent tool for ongoing financial analysis, and one

we use more and more.”

Tom Kay, Barclays business customer, St Agnes.


Part 2

32

How to manage your cash flowThe example cash flow forecast sheet at the back of this

guide will help get the ball rolling. Take a look at it before

starting to fill in the template yourself. And of course,

your Local Business Manager is ready to help you every

step of the way.

Step 1: Before you start, complete the expected

columns in the cash flow forecast for each month.

The research you’ve already done will help you to do this

(see the insert at the back of this guide).

Step 2: Once you’re up and running, complete the actual

sales you’ve achieved and payments made each month.

If this doesn’t match what you expected, analyse why

this is and factor it in to what you expect in the following

months. There’s an example of how to do this on the

cash flow forecast sheet we’ve provided.

Insider knowledgeWhen you do your cash flow forecast:

• Be realistic. You don’t want to over-commit too early

but grow surely and steadily. The research you’ve

done will help you to figure out the sales levels it’s

reasonable to expect for your product or service

• Include all your expenses. You might have some

expenses that aren’t included here, so just add

them in

• Budget for seasonality. Factor in your busy and slow

periods so that you have enough cash to pay your

suppliers all year round

• Ask for help. If you have any questions one of our

Local Business Managers will be happy to help you.

How do I make and receive payments?There are many ways to pay the bills and keep on top of

the cash flowing into your business:

Online bankingBank when it suits you, day and night, rather than when

the bank is open. It’s a hassle-free way to check your

balance, transfer money, manage your Standing Orders

and Direct Debits, and even apply for business

overdrafts and loans. You can reconcile your books

online with your Barclays business account, too.

Telephone bankingAnother option for making payments if you don’t have

time to go to the bank. Available 24 hours a day, you can

use an automated service to check your bank balance,

transfer funds and pay bills in minutes.

Card paymentsUsing a business credit or debit card to make payments

for most purchases is easy and efficient. For example,

you could use a Barclaycard Business Card (subject to

application and status) for purchases, or the services

of a card acceptance company, such as Barclaycard

Business, to enable you accept card payments as an

alternative to cash and cheque. They can speed up

purchases and improve your cash flow. Credit cards are

more secure than cash and more reliable than cheques.

For more info, visit www.barclaycardbusiness.co.uk

Direct DebitWhen you sign a Direct Debit, you give consent to a

supplier to take outstanding payments directly from

your account, which can save you time and money.

Direct CreditMake safe, secure and reliable one-off payments by

electronic transfer directly into another bank or building

society account, to pay wages or suppliers, for example.

Standing OrdersThese enable you to pay regular fixed amounts – for

example, a payment to a supplier of £500 could be set up

to leave your business account automatically at the same

time each month.

CashIs quick, convenient and guaranteed, but it also carries

a risk, whether through loss, theft or fraud. It’s best for

smaller transactions, especially retail.

ChequesA traditional way to pay bills and receive payments from

your customers, but can be time-consuming: it takes a

few working days for a cheque to clear.

For more information on ways to make and receive

payments, ask your Local Business Manager.


33

Getting started

Managing payments from your customersWhen customers owe you money they’re known as

your debtors. If you want to build a good relationship

with good customers, it can be a good idea to offer

them a period of time to pay. Talk to an accountant

about how to do this.

Here are some tips on what to think aboutwhen deciding on your credit policy:• How much time can you afford to give your

customers so that you have enough money coming

in to pay your bills, make purchases, etc? Take into

account credit terms you have from your own

suppliers. For example, if you have two weeks to pay

your suppliers, but you let your customers have four

weeks, you could have problems with your cash flow.

• How much will your customers be able to pay?

Factor in whether changes in their market will affect

this (or whether they can pay at all).

• What credit terms are your competitors offering? It

could sway your customers when deciding who to

buy a product or service from.

• Do you want to take out invoice insurance to cover

cash lost if your debtors don’t pay? Ask your Local

Business Manager for information on how you can

get this cover.

Expert guidance from a Local Business ManagerIf you’re having problems with your cash flow, try

these easy ways to help you take control:

1. Use online or telephone banking to monitor your

day-to-day business finances. It’ll enable you to

settle your books automatically.

2. Use book-keeping software included in

packages such as Barclays Business Manager to

tackle two or three problem areas at a time – it

can really help you to run your business better.

3. Talk to your Local Business Manager or

accountant as soon as you notice any problems.

They’ll be able to help solve them as quickly

as possible.

Late paymentsIt’s inevitable: some people just won’t pay when you

ask them. But if you have a plan in place to chase late

payments, it’ll make the process faster and easier (and

less embarrassing) to deal with, because it’ll stay strictly

professional. Sending out a series of letters at set

intervals is a good way to deal with these situations.

You could also back up each letter with a phone call –

after all, they’ll be harder to ignore than a letter. But

don’t be too forceful too early: you want to come across

as reasonable as well as businesslike, serious and firm.

Insider knowledgeSearch out credit references on a customer if you’re

thinking of giving credit for a larger amount. You can

get these from their bank or other suppliers, or a credit

reference agency (you can find these by searching on the

Internet). If your customer’s credit history isn’t perfect, or

they don’t have a track record, you might decide to limit

how much credit you give them.


Part 2

34

Your working capitalYour working capital keeps your business going. It’s

made up of debtors, creditors, stock and cash. One of

the reasons that businesses fail is because they run out

of working capital, so we’ve put together a list of what

you should look out for.

Warning signs• You have customers that can’t pay you – this

will restrict the flow of money coming into

your business.

• You have customers that don’t pay you on time –

make sure you set out clear terms of trading in a

contract, right from the start. If you’re unsure, get

it checked out with your solicitor.

• You don’t know the timing of invoices and

payments – using a book-keeping package can help

you to send invoices promptly and to know when

payments are due.

• You’re relying too heavily on your business overdraft

facility – they can be a useful way to get by, but your

account should be in credit most of the time.

• You’ve bought too much stock – holding stock can

eat into the cash you have available and increase the

risk of having to sell off at a discount, or even loss.

• You don’t have a collection process in place – make

sure that you invoice the right person at the right

address so you get paid swiftly.

• You haven’t got a plan in place for quiet periods –

seasonality affects some businesses more than

others, but always remember that you’ll still have to

pay your fixed costs, like rent and heating, no matter

how many sales you make.

Insider knowledgeKeep records of all correspondence and

conversations that relate to your business finance.

It’ll help you to avoid any miscommunication and

protect your payments.

Did you know?We want you to use your money on the things

you really need for your business in the early days

it’s up and running. That’s why we’ll give you a

period of free business banking when you open

a business account. Just ask a Local Business

Manager for details.


35

Getting started

How to chart your successThere’s no magic to it: the basic calculation to work out

how much you’re making (or your profit margin) is to

subtract what you’ve spent from what you’ve sold. If

the total is a positive amount, you’ve made a profit. Try

filling out the sheet yourself, or you can always talk to

one of our Local Business Managers about our range of

software packages that make it even easier to track your

profit and loss.

Doing the sums part two:forecasting profit and loss

When it comes down to it, your business will need to

make a profit to succeed. Profit isn’t the same as cash

flow, though – even when your business makes a profit,

it won’t necessarily mean you have cash to pay for what

you owe in the short term.

The profit and loss forecast sheet, like the one included

with this guide, will help you to calculate what your

profit will be, month by month.


Part 2

36

Whether it’s dollhouses, hammer and nails or hair dye,

your business will need stock to operate day to day. All

the stock you hold – whether it’s finished items or parts

that you’ll put together – represents real money. So it

makes sense to learn how to manage it efficiently.

What does holding stock cost yourbusiness?• Bulky items take up storage space, which

costs money.

• Perishable items (like food and flowers) or valuable

stock (like machinery) might need specialist storage,

such as refrigeration and security, which will

increase costs.

• Your cash flow could be restricted if your assets are

tied up in stock.

What’s good stock control?Aim to have enough stock on hand to meet customer

demand without tying up too much of your space and

cash. Also, different stock items will take longer to be

delivered to you than others. It’s important that you

manage the way you order them from your suppliers

so they arrive at the appropriate time.

What’s the best way to control my stock?Choosing the right stock control method for your

business will depend on several things, including the

amount and value of the stock, how far ahead you need

to order and when you need to deliver to your customer.

For example, you can use a software package, such as

Barclays Business Manager, to automatically monitor

your stock. This type of software logs goods going into

and coming out of your business and handles all other

stock control issues, like inventory reports and

reordering. Go to https://bbm.clearlybusiness.com/businessmanager/demos for an online demo to see

how easy it is to take care of your stock.

For more information on the options available and what

might be the best stock control option for your business,

just talk to a Local Business Manager.

Stock: taking control


People


Date post:	28-Mar-2016
Category:	Documents
Upload:	kirsty-hardingham
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Barclays Business Plan

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