Get Your Accounting Firm Off the Ground with A Business Plan

What is the one thing that could make your accounting business fail before you even start? 

Here’s a clue: if you fail to plan, you plan to fail. Science backs this idea, with a study confirming that those who plan are 16% more likely to succeed.

Your business plan is the backbone of your company, your roadmap to success. Here’s what you need to know.

What is a business plan and why do you need one?

Investopedia defines a business plan as a written document that describes in detail how a business defines its objectives and how it is to go about achieving its goals. 

A business plan lays out your goals in detail, and includes your marketing, finances and operational standpoints. 

It is an important document used for the external as well as the internal audience of the company. 

This means that it maps the way forward for everyone involved in the company, but, for example, if you want someone to invest in your company, they will want to view your business plan.

As time goes on, you can go back to your plan to see if your goals have been met, and you will be able to evaluate whether your goals need to change or if you add new ones.

Benefits of a business plan

Your business plan is more than just a document you have to write because it’s the right thing to do. It can help your business in clear-cut ways by giving you a comprehensible idea of what your bigger picture entails. 

Compile your business plan and you will see the following aspects unfold in front of you:

• Weaknesses in your business idea might pop up, allowing you to address them before you launch.

• You may identify business opportunities you did not initially consider, and plan how to take advantage of them.

• Analysing the market can give you ideas for how to strengthen your idea. 

• A business plan gives you room to plan for potential challenges that might come your way.

• The business plan is the tool you will use to convince people that you are serious, and to get potential partners, clients and highly skilled employees on board.

• When putting together your business plan you are forced to calculate how much money you will need to get to a point where you make a profit.

How to write a business plan

It might seem daunting if you are writing a business plan for the first time. Most things become easier though if we just sit down and get going. 

Your business plan is useful once it’s complete, but actually putting it together helps you to analyse everything that could affect if, and how fast, you achieve your goals.

The following is the information contained in a typical business plan, and is a good starting point:

• Executive summary This is a brief description of what your company is and why it will be successful. 
  
  Include your mission statement, what service you are offering, your location and information about your team.
  
  If you are applying for financing, include financial information and high-level growth plans.

• Company description Details about the problems your business aims to solve. Explain the competitive advantages that will make your business a success.
  
  These could include your accounting experts, or any other strengths that you can think of.

• Market analysis Here you ensure that you have a good understanding of your target market, and also that you know what is already happening out there in your field.
  
  Look for trends and themes. Consider your competitors, and what they do that is working. Why does it work and what can you do better?

• Organisation and management Here you will state how your company will be structured. Disclose your legal status – are you a sole proprietor or a Pty (Ltd)?
  
  You can even compile an organisational chart to show who is in charge of what in your company and to show how each person brings value to the company.

• Your product Describe in detail the service you are offering and explain how it will benefit your clients.

• Marketing and sales In this section you will explain how you are planning to attract and retain clients.

• Funding request Here you outline your financial requirements if you are going to ask for funding.
  You need to explain clearly how much funding you will need over the next five years and what you will use it for.

• Financial projections In this section you want to show the reader that your business will be a financial success. Provide a prospective financial outlook for the next five years.
  
  This includes forecasted income statements, balance sheets, cash flow statements and capital expenditure budgets. Clearly explain your projections and match them to your funding requests.
  
  Another thing you can mention here is if you have collateral you could put against a loan.

• Appendix This is where you put all supporting documents, such as CVs, legal documents, permits, credit histories etc.
  

5 tips for writing a good business plan

If you have never written a business plan before, it might seem a bit intimidating. Check out these tips to help you get pen to paper:

1. Keep it short

Life is busy. No one has time to read through your 100-page plan. Stick to the most important facts without elaborating excessively. A simpler document also makes it easy for you to refine it as your business grows.

2. Know your audience

If your prospective investors aren’t familiar with the world of accounting, be careful of the wording you use. 

Stay away from jargon specific to your field and try to phrase things in such a manner that it can be easily understood.

3. Test your business idea

Ensure that you have someone who can look at your plan, or that your market research is in place. It’s vital that you test the viability of your business before you launch.

You can even go out and speak directly to your potential client base. Is there a gap in the market? Do people need what you are planning to offer?

4. Establish clear goals

Do you know exactly why you are starting this business? Do you know what you need to get out of it and what you want to accomplish?

5. Be confident

There are many successful business owners out there who are not business experts. Be open to learning new things – the internet makes it very easy. And believe in yourself.

Source: https://articles.bplans.com/how-to-write-a-business-plan/

7 types of business plans

The business plan comes in many shapes and sizes, depending on your needs. Take a look at these different types of business plans to guide you in compiling your own:

1. Startup plan

This type of plan is typically used to grab the interest of potential investors. This is an initial plan that can be adjusted as the company grows. It will include the following information:

• Executive summary. This is a brief introduction that gives the gist of your plan.

• Overview of the company.
• Management background.

• An explanation of the service or product the company is going to provide.

• Value proposition. This refers to the value you are aiming to add to the lives of your customers/clients.

• Strategic marketing plan.

• Market evaluations. This is the research you have done about your target market, showing that there is room in the market for whatever it is that you are aiming to provide.

• Projected startup costs.

• Cash flow projections and income and profit expectations. You need to include an exit strategy for potential investors as well as an explanation of how you plan to use investor money. 

2. Strategic plan

This kind of plan looks at the strategies your company will use to achieve its goals. A SWOT analysis is a helpful tool for creating this plan.

SWOT stands for Strengths, Weaknesses, Opportunities and Threats and helps you to pinpoint the best strategies to leverage your strengths and overcome potential challenges.

The main components of a strategic business plan are: 

• The company mission statement.
• The company’s vision.
• Key factors for the company’s success.
• Strategies to meet your goals.
• Implementation deadlines. Every goal you set needs to have a ‘by when’.

3. Feasibility plan

If you are just starting your accounting firm, you will likely not yet need this kind of plan. A feasibility plan is written when a company is considering adding a new product to an existing market, or to sell current products to a new market.

This plan contains the details of the new market that is targeted and explores whether the new venture will result in a profit worthwhile to the company.

4. Operations plan

This plan is part of strategic planning, and maps out the day-to-day operational activities a business needs to complete to achieve its goals.

Here you will detail the responsibilities of management, the different departments and employees and how they will contribute to the company’s overall success.

Your operations plan can also include the following: 

• Organisation objectives
• Activities required to complete objectives
• Resources needed for activities
• Staffing requirements
• Implementation deadlines
• Progress tracking processes

5. Expansion plan

This is the plan you will draw up when the time comes for your company to grow. You will document additional resources you will need, such as financial investment, materials for new products or more employees.

These are some of the details you have to include:

• Full company description
• Details about your services and products
• Background on your management team
• Detailed financial projections
• Data and full analysis of market research
• Your funding request
• Notable company achievements

6. What-if plan

This is a less formal plan that prepares your company for a potentially risky move. In short, this is your back-up plan for how your company will deal with the worst-case scenario.

The value of this plan lies therein that it helps management to keep in mind the potential effects of making large business decisions, such as raising product prices or merging with another company.

7. One-page plan

This is just a short version of your detailed plan, used to brief potential investors and partners about the basic details of your company. It explains your product/service, target market and the company’s values and mission.

Final takeaway

If you don’t particularly feel like writing up a business plan, start by thinking about it differently. View this task as an opportunity – your very first opportunity to work on your future success.