Gibraltar Budget 2012 - Gibraltar International Finance Magazine

BUSINESSLooking to the future:Why creating a business planis good for businessBy Paul Wharton, Head of Intermediariesand Corporates, Barclays (Gibraltar)Writing a business plan isone of the most importanttasks you will undertakewhen starting a business.It’s a dynamic document used to settargets and collate ideas, and can beused to ensure they are realistic andworkable. A good business plan willnot only help promote the business, itwill also act as a tool to attractfunding. Creating a business plan cansometimes be perceived as a difficulttask, but using a checklist to ensure allrequired information is included canmean the process is a relativelystraightforward one.Approaching the taskFirstly, get your ideas down on paper.Remember to be realistic, concise andclear. You will refer to your plan later onto monitor progress.Do your research. For example, whois your target audience and what will theythink of your product? Do you have aname for your business? Remember, thename you choose should reflect the imageyou want to project, as well as beingmemorable and original.If you hire employees, even part-time,it’s vital to familiarise yourself withemployment law and understand how tobuild a motivated and efficient workforce.The purpose of a business plan is tooutline the objective of the business, soinclude the following: What the businesswill do, the products or services it willprovide, your target audience, financialtargets and any potential threats to thebusiness.It’s important that your business planstands out from the crowd, especially ifyou’re hoping to use it to generate thesupport of an investor or lender; it shouldbe easy to read, concise, honest andrealistic. It’s vital to ensure there are nocontradictions. So make sure the figures inyour plan matchthose in yourfinancial forecast, ifthey don’t, the plancould lose credibility.The following headings will helpstructure your business plan:Table of contentsA table of contents lists the main areas ofthe business plan along with pagenumbers. Clarity is vital; a logical, wellstructureddocument is more likely toinspire confidence in potential investors.Executive summaryThe Executive Summary is a briefoverview of the plan and should be nomore than two pages. Being the firstsection the investor will read, it must beengaging and well written.When reading this section, investorswill want to know the answers to thefollowing questions:l What gives your product the edge overthe competition?l What experience do you and/or yourcolleagues have in the area you want towork in which will make the venturesuccessful?l Is your business idea viable and will itbe profitable?l How will investors get their moneyback or get a good return when you sellthe business or buy their shares?You should indicate the amount ofmoney you and your business partnerswill be investing, the amount of additionalfinance required and why. If you can talkabout how the investment will benefit thebusiness, so much the better.Aims and objectivesConsider what investors will want toknow about you and your business whenyou meet, and prepare accordingly.Essentially, they’ll want to know whatmotivates you, so consider how youwould answer these questions:l Why do you want to go into business?l What do you want to achieve?l Will the business supplement yourincome or replace it?Describing your businessWhen it comes to describing a business, Ifind it useful to do a SWOT analysiswhereby you consider the Strengths,Weaknesses, Opportunities and Threats toyour business. Doing this will deepen yourbusiness understanding and highlight areaswhich need addressing. Next, do a PESTanalysis, looking at the Political,Economic, Social and Technologicalaspects of the business. This will help youconsider the bigger picture and generatenew ideas.GibraltarIf you are considering starting a businessin Gibraltar, it is good to know that thejurisdiction offers the following:l Well regulated with a stable andpolitical economic environment whichbenefits from EU membership and accessto the EU financial services market. Italso has a stable currency with low levelsof corporation tax and minimalrestrictions in the movement of capital orrepatriation of dividends which benefitsfrom no VAT or capital gains tax.l An established finance centre boastingsome of Europe’s best professionals in theareas of legal, accountancy, banking andinsurance with a first classcommunications system and aninternational airport.Gibraltar offers all of the above andmuch more, making it an excitingprospect for potential business owners.Remember, the first step on the roadto success for any business is a goodbusiness plan. I wish you all the best inyour business endeavours.Paul Wharton is writing in his own capacityand none of the above is intended to expressthe views or opinions of Barclays Bank PLC.www.barclays.com/wealth12 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com