Reply to: Business Plan

[swboy]

I need to put together a Business Plan to send off to the VAT office before i can get my number (another loop). Never written one before so was wondering if there are any recommendations out there for sections i should have in my plan.

My accountant suggested the following
Overview of the Company and what line of work it is to provide
Overview of the Director and experience of any other staff employed
12 month Plan
5 year plan.

Now i'm ok with the first 2 but 12 month plan is simple to make money and 5 year plan is to continue to make money. But i think in a plan you put a lot more into it.

Try http://www.tvp.com.au/resources/bplanguide.htm it has some good advice.

[TheFaQQer]

NO!

Maximise allowable expenses.

Minimise recorded income.

D'oh - I knew I shouldn't have tried to be clever (I'm told it doesn't suit me).

My real business plan says "make lots of money, don't pay much tax"

[tim123]

just because you can't see something doesn't mean that it isn't out there waiting.... to scupper the plans you never had. ahhh - i think i see what you mean: you are travelling and you don't have any expectation about destination so wherever you are going is wherever you get.

i own a ltd company that sells it services from 1 day to multiple years so why would i not want to plan the future of my company?

This isn't about whether one can, it's whether one must.

Business Plans are (almost by definition) nothing more than a guess as to what might happen.

The average freelance person, selling their time, does not need to compare 'income received' against a predrawn plan to tell if they are doing well or not. They can do this by counting hours billed per quarter.

It's a trivial task to tell if you are doing well or not.

tim

[DS23]

just because you can't see something doesn't mean that it isn't out there waiting.... to scupper the plans you never had. ahhh - i think i see what you mean: you are travelling and you don't have any expectation about destination so wherever you are going is wherever you get.

i own a ltd company that sells it services from 1 day to multiple years so why would i not want to plan the future of my company?

[tim123]

sure, business plans are rather fundamental for startup or investment proposals but just because these are not happening does not negate the benefits that an ongoing plan can provide.

ancient chineese proverb say: "fail to plan, plan to fail"

plan, revise, review and plan better. measure success and then plan for less failure and improved profit, plan for that ideal training spot or replacing hardware, plan to identify bad payers or your dividend level and schedule, plan the amount of time you can bench yourself...

I am a freelance contractor selling my time in six month chunks (as is 99% of this board). WTF is a business plan going to contain that is useful to me?

tim

[DS23]

Business plans are produced to show to third parties, they aren't done for your own benefit.tim

sure, business plans are rather fundamental for startup or investment proposals but just because these are not happening does not negate the benefits that an ongoing plan can provide.

ancient chineese proverb say: "fail to plan, plan to fail"

plan, revise, review and plan better. measure success and then plan for less failure and improved profit, plan for that ideal training spot or replacing hardware, plan to identify bad payers or your dividend level and schedule, plan the amount of time you can bench yourself...

[tim123]

he's not wrong. why would you not want to create a business plan .

Because I'm not asking anybody to back my company.

Business plans are produced to show to third parties, they aren't done for your own benefit.

tim

[Buffoon]

Here's my business plan:

- Minimise expenses
- Maximise earnings

The end.

NO!

Maximise allowable expenses.

Minimise recorded income.

[TheFaQQer]

Here's my business plan:

- Minimise expenses
- Maximise earnings

The end.

[Gonzo]

VAT office have asked for it before they continue with my registration. Accountant thinks it is simply just to prove that you are for real

When my co went for VAT registration a couple of years ago they asked for evidence but gave a long list of things (of which business plan was one), any of which would be acceptable as evidence of intention to trade.

In the end I sent them copies of a couple of invoices for stuff that the company had bought and they were perfectly happy with that. Obviously the invoice has to be to your company not yourself.

[DS23]

....It sounds like a right pain (and it is) but if you do it in a way that makes sense to you, you might even get something out of it yourself...

he's not wrong. why would you not want to create a business plan and keep it going even if not prompted by the vat man? makes perfect sense to me.

i like to be able predict and monitor the fiscal future of my company so i have a simple spreadsheet that has four sections in an extending timeline: invoicing, outgoing, incoming and balance. with predicted and actual versions i can track expected and achieved and then monitor and adjust as necessary. i think it helps to know where you expect to end up and whether or not you will achieve it.

[Euro-commuter]

So if the excise man issues a VAT number then it must mean that at least one part of the HMRC believes that you are a ‘proper business’. Do I smell an IR35 defence here? (Not that I care anymore)

No, it doesn't mean that at all. There are no qualifications for being VAT-registered. (Anyway, re IR35 it has been told to death that being a business/employee/whatever for one purpose has no bearing on another).

No, they do not "grant" you a VAT reg. no. You don't have to qualify in any way.

[Buffoon]

So if the excise man issues a VAT number then it must mean that at least one part of the HMRC believes that you are a ‘proper business’. Do I smell an IR35 defence here? (Not that I care anymore)

[Euro-commuter]

I need to put together a Business Plan to send off to the VAT office before i can get my number (another loop). Never written one before so was wondering if there are any recommendations out there for sections i should have in my plan.

I believe that you can register for VAT without having any coherent business plan. However HMRC are probably asking for this to avoid giving VAT Reg Nos to people doing EU carousel fraud.

I didn't have to provide a business plan, but I did have to answer a question about how the Ltd Co Reg Address seemed to be a residential address, and how was this consistent with running a business? I just told them.

[Old Greg]

I need to put together a Business Plan to send off to the VAT office before i can get my number (another loop). Never written one before so was wondering if there are any recommendations out there for sections i should have in my plan.

My accountant suggested the following
Overview of the Company and what line of work it is to provide
Overview of the Director and experience of any other staff employed
12 month Plan
5 year plan.

Now i'm ok with the first 2 but 12 month plan is simple to make money and 5 year plan is to continue to make money. But i think in a plan you put a lot more into it.

That's crazy. I applied for my VAT number in February and got the number, no problem.

I've written business plans before (but not for my own co.)

I think part of the difficulty you may be having is that there's no reason why the VAT people would want it. Imagine that you've asked the bank for a 30k loan and they want a business plan.

As well as what you have above, I'd include:

Your planned pricing against the market
Projected sales
Projection of income, expenditure (including start up costs and wages), and profit.
Estimates of sales required to break even.
High level risks (e.g. your illness) and mitigation
All over the first year only.

It sounds like a right pain (and it is) but if you do it in a way that makes sense to you, you might even get something out of it yourself. Having said that, I wouldn't bother writing one myself unless I had to - that's one of the reasons I took up contracting. Good luck.