To help banks assess whether you’re a good risk when you apply for a loan, they will give you a shopping list of required information. Failure to oblige with the right information can lead to months of delay in getting an answer. So what will your bank want to see?
In the relatively short space of time you have with the representative of you bank, it’s impossible to effectively convey every aspect and nuance of your business. A business plan can do that. It’s is a ‘convincer’ for the bank and a control and check for you. A plan can highlight flaws in your business idea and potentially save you from making an expensive mistake.
Bankers love numbers. Your annual financial statements may not mean much to you, but to the bank they offer a wealth of important information. Don’t apply for finance if your financial statements are out of date. Going to the bank any time greater than three months after your financial year-end without your accounts will simply result in the bank telling you to get them done.
You may have your financial statements produced within three months of your year-end, but it’s still three months of trading since you closed your books and a lot can happen in that time. The bank will want to see management figures.
The format doesn’t have to be complex; it can be as simple as an Excel spread sheet to accountant-prepared figures. You can also get accounting software that easily prepares monthly figures for you, so there’s no excuse for not having up-to-date figures on business performance.
Your projections are your view of where you think your business is going to be financially in one, two and three years’ time.
The bank will want to see to prove your business can afford to pay back the loan or overdraft facility. They can also be used as a tool to monitor future performance against your estimates. And by preparing forecasts, you will be forced to think through your numbers first.
Preparing financial forecasts can be daunting, especially if you have never done them before, so seek help, perhaps from an accountant, if necessary.
Increasingly, banks are taking a greater interest in business owners’ personal financial position. Banks have realised that many business owners have raided savings and ‘maxed out’ on personal overdrafts and credit cards to keep their businesses going.
Banks will ask you to complete a personal monthly income and expenditure report and an assets and liabilities statement, which will give them an immediate overview of your financial position.
Each lending request will be treated differently and may lead to your bank requesting more information than I’ve outlined above, but this provides a good introduction.
Rob Warlow helps business owner’s deal with their banks to obtain funding or assist in re-building damaged client-banker relationships. He has written a book called ‘Loan Sharp: Get the Business Finance You Deserve’ which is available via Amazon or on his website.
It is a really exciting time for Rico Mexican Kitchen at the moment. You might think I keep on saying this and that’s because business opportunities take twists and turns and there’s never a time to be bored! Having a strategy is fundamental to keep the opportunities and challenges in perspective, but there must be a great amount of flexibility and a desire to go with the flow and take any opportunity too.
The aim of my business is to introduce a new range of fresh, vibrant, genuine Mexican foods and now I’m looking for opportunities which bring volume.
We have achieved a listing with a prestigious supermarket chain, which is great news! What normally happens though is that they will list you in a limited number of stores and monitor the performance of the product and then, if it does well, they will offer to place your product in more branches. The problem here is that for some products, the minimum production runs are quite large and if they have a limited shelf life, the waste whilst in storage would be considerable.
So, if the shops are not enough to cover the minimum production run, we could end up running the production at a loss. I have identified other retailers which will stock the new products, but we still may find ourselves overproducing.
The really big question in whether we should go ahead with this listing and hope for the best, and in the meantime, work like mad to get more listings to give us the volume we need. Or is it best to delay the launch by a few months, get those extra listings first and THEN start producing?
I know that option two sounds safer but the real danger is that while we are working to get more listings, the original listing offer may disappear. This is not unheard of. It may be that a competitor may get the listing instead, or the buyer changes and their successor won’t choose our product. Difficult decision, isn’t it?
You can find out more about Marcela on the new interactive business website www.inafishbowl.com
A recent feature in The Guardian ran with the headline: ‘Graduates warned of record 70 applicants for every job’ The next line went: ‘Class of 2010 told to consider flipping burgers or shelf stacking to build skills’ Was I the only one thinking flipping burgers and shelf stacking is a flippin’ great way to earn part time income whilst building a business? For all graduates considering self-employment, here are five tips along with stories of those who’ve been there and done it.
If you’re an undergraduate and looking at the job market with dread, start taking small steps now to earning an income. Is your degree in languages? Become a private tutor via sites like First Tutors or sell your skills to business through the likes of Lingo 24 and Language123.com. Are you good at making things? Make a few more and upload to sites such as Folksy.com and MyEhive.com so you can sell to a wider audience. Kane Towning started on the path to self-employment whilst at Leeds University and as soon as he graduated, became full time director of AIM Clubbing; an events company set up with two fellow students and friends.
There is plenty of help on offer whilst you’re studying – and still when you leave. Whilst studying, check to see if your College or Uni hosts an enterprise society; NACUE is a good source for this. Make the most of events, competitions and Awards hosted by National Council for Graduate Entrepreneurship and Shell LiveWIRE and why not take on work experience with entrepreneurial upstarts so you can learn on the job via sites including Enternships and Gumtree.
Does starting a business seem a bit too daunting when you haven’t even left learning? Then pool your talent, join with friends and start that way. This is what the three amigos Oliver Sidwell, Ali Lindsay and Chris Wickson did when they came up with the idea for RateMyPlacement whilst studying at Loughborough University. After graduating, they all secured jobs and worked collectively on the business at nights and weekends. That was three years ago and the company is now a startling success.
To be sure of a wide market for your products and services, go global from the start. Technology enables you to do this with sites such as Odesk and elance.com allowing you to be found by customers around the world if you’re selling time and knowledge and having your own website (with good search engine optimisation) increases your chances of picking up overseas trade. In business, the world truly is your oyster and think of all the places you’ll get to travel to meet clients, and taste local culture!
I hear from many students who are running a business and getting much-needed help from parents whether it be rent-free accommodation or having a bookkeeper/mentor/telephone receptionist on tap who won’t expect a salary in return! Arthur Guy started a star solutions when he was 17, after working at an electronics store. He’s now completing a PhD at Sussex University so his Mum takes care of the day to day running of the business. Thanks, Mum!
Even if you don’t turn your business into a full time venture, the experience of being your own boss and showing you have the attitude and skills to make a living will look good on your CV and set you apart from those other 69 applicants.
Environmental printing is no longer an oxymoron and there are steps you can take to be greener in your office. Simply couple these additional pointers with my cost saving tips and enjoy these additional benefits for both the environment and your wallet.
Getting rid of bold headers or text will cut down on ink usage for each page, especially in often-printed documents. You would be surprised how much ink and toner you can save by shrinking your letterhead by 20% or switching to black and white formatting! Further formatting such as reduced margins can really get the most out of every page you print and limit your paper consumption.
Efficiently presenting all the information on your pages is a great way to limit any paper and ink waste. Consider cutting down your font size and looking at physically thinner fonts (such as Century Gothic) to make the initial size of your prints smaller. Go even deeper and look at the actual content bring printed, is it presentational work or general office documentation? Can it be reworded or broken into short bullet points to be condensed on the page? This small amount of time instead of just hitting Ctrl+P will help you save paper.
Quite a few machines now provide both standard and high capacity cartridges. In a significant number of cases, the XL capacity cartridges are no physically larger than their standard capacity counterparts; they have simply been filled completely. Purchasing these cartridges will give you cheaper running costs and fewer waste cartridges being generated.
Whether in your existing machine or finding it as a feature when browsing for a new printer, standby modes for laser printers are an amazing way to limit your energy consumption. Keeping the machine active and ready-to-print drains energy throughout the day, and finding a printer which limits power needed to maintain this state is inherently important for any green-aspiring office. With some machines using a little as one watt in standby, yet going from standby to print-ready within five seconds, you can save energy without experiencing delays in your office printing.
Leaving the office overnight or for a weekend? Turn your machine off when you know it is not in demand and fully rid yourself of wasted electricity.
6.1 Paper and packaging
Don’t just bin the draft documents you have printed, get an office recycling box and encourage the recycling of all your non-confidential paper, either for re-use on the blank side, or for pulping. Plus manufacturers now produce environmentally friendly packaging which can be thrown into recycling with the minimum of fuss.
Continue to your cartridges. Binning them after a single use should be a crime within the industry. Keep that plastic casing away from the landfill as long as possible by recycling. There are huge numbers of recycling companies in operation, and many will often pick up your cartridges free of charge and get them back in circulation after cleaning and reconditioning. If you have one of the few cartridges not valid for recycling then it probably means it has literally no technology within it, and is just a plastic casing. Just take it to your closest plastic recycling bin and do your part for the environment.
6.3 Your machines
Under the Waste Electrical and Electronic Equipment (WEEE) direction manufacturers have to take responsibility for printers at the end of their life cycle. Make sure you get your machine collected when replacing your office workhorse and ensuring minimum material ends up in landfill.
Got any great green tips to add to this list? Leave your comment and help us all be better for the environment.
After a very busy period planning for a major consumer show at the NEC and other important activities, I was looking forward to a few quieter days in the office, whilst Tony, my production guy come right hand, was fulfilling weekly orders and perfecting the new product to send samples of later on this week.
However... best laid plans. A large order arrived today marked URGENT and I need to drop what I’m doing yet again and come to the rescue.
My customers come first. But the stuff I need to do this week is strategic stuff, things that move the business forward. I’m torn and, quite frankly, I’m tired. If I don’t come to the rescue the orders won’t be complete in time and, if I do, then I have to work all hours to do the strategic stuff in the night. And to make matters worse, Tony in production told me ages ago that he needed two days off this week.
You may think that this is partly due to bad planning on the production side and that I should hold stock. However, our products are chilled, with no preservatives, and have a short shelf life (30 days from production), so I need to produce and ship quickly so the distributors and the shops get products with a decent shelf life.
It looks like I’m up until 2am again working for a few days! Oh well, I don’t mind, it’s a super exciting time and being stretched to fulfil orders is a nice problem to have. I just have to make sure I do the strategic stuff as well so that I am working on my business as well as in it!
You can find out more about Marcela on the new interactive business website www.inafishbowl.com
Reading E-Myth by Michael Gerber changed the way I thought about my own business, Big Picture. It helped me decide to change my offering from business consultancy to providing a template that could be packaged up and delivered to established coaches, consultants and accountants.
After much research and development, we’re back thinking about start-ups and how Big Picture can help shape successful businesses. So, getting back to E-Myth, what are key parts that Big Picture and it share, starting with the personalities that are present in any new business?
It’s no coincidence that the three personality types E-Myth describes are easily placed on Big Picture: the Entrepreneur; the Manager; and the Technician. To quote: “While each of these personalities wants to be the boss – none of them wants to have a boss”.
Anyone can start a business, but to build one that actually succeeds you can’t just play the natural role of technician. “Your ‘Entrepreneur’ needs to be coaxed out, nourished, and given the room it needs to expand. Your ‘Manager’ needs to be supported to develop its skill at creating order and translating the entrepreneurial vision”.
For a new business to progress from infancy, through adolescence to maturity, starting with an Entrepreneurial perspective provides the best chance of success... That’s the theory, anyway.
Martin Johnson, Big Picture