If you are a start up or an existing business, getting the money right is the difference between success and failure. One of the main reasons a business fails is due to poor or inadequate funding.

When you go into business, one of your aims is to grow and be a success and getting the right finance in place is all part of that. The first step then is preparing a business plan that the bank will like and get all the relevant information from. Your business plan should map out the direction you intend heading in and how you are going to make it happen.

Most plans should include a summary of your business and have a cv included in it that explains your experience in that particular field. So point one then is a summary of your qualifications and experience. Point two, competition, who they are, what they are doing and how you will fit into this market and make more money than them, or how you will be different from them. Point three is the old marketing plan, and don’t worry it’s not a dirty word, there is lots of information stored on this thing called the internet, which helps you to write a corker of one. You need to list achievable targets, pie in the sky will be seen through and the lenders will stop reading it at this point, and point four, the financials.

Ok so what in particular do they want to read about money wise. Well if you are a start up it’s a good idea to make your cashflow forecast for a minimum of three years as this shows your commitment to the business and gives them confidence that you believe in yourself. You also need to show that the loan you are seeking, can be repaid and when it can be repaid by. After all, when you lend money to people, you do so on the understanding of when and how you are getting it back. The lender will also like to know about already existing outlays finance wise, ie do you have any other loans personal or otherwise, how much for and how long is left to pay on them. It’s a mistake to think you don’t have to disclose this information, hide something from them and again lenders will switch off from your plan.

You also need to show them how the money will be used and what difference it will make to your company. And don’t forget, the lenders/banks, like to see some commitment from you. After all, if you don’t believe in your business why should they? You need to show that not only do you put time and effort in to it, but also your own money. You will score big brownie points if you can do this.

Now the bit that worries some, the disclosure of personal credit history. If you have no issues with it, brilliant, enjoy, but if you have some blots on your record, tell them before they find out. Explain to them what happened and why it happened, better this way than them feeling you are hiding something from them.

So then in summary, keep it simple, don’t go overboard on the presentation, and most importantly of all, be honest and be realistic.

Why would someone buy from me?

People do things for a reason. That reason might not always seem the most logical or vital but there’s always a reason. Figuring out the reasons a potential customer would buy from you is the first important step in creating a marketing plan for your business and probably the most important question you can answer.

The easiest way to start is with the basics. Why would a customer buy at all?

A customer buys something because they want to fill a specific need or want. People buy food because they don’t want to be hungry, they buy accountancy services because they want their taxes filed and they hire a painter because they want their walls to look good.

Of course, most customers want more than just the basics. They need food to avoid going hungry but they’re also likely to want it to taste good. They may also want it to be healthy, or cheap, on convenient or to make an impression at a dinner party.

These are all specific reasons why someone would buy from a particular business. The problem is that everyone will say the same thing. Everybody offers a great service at an affordable price, every car insurance firm says they are the cheapest, every restaurant has great food and every taxi firm has a ‘fast and reliable service’.

When everybody says the same thing, customers simply ignore everyone. Then it’s down to who’s got the biggest budget.

So if you haven’t got fortunes to spend, need to say something different. In other words, you need to identify the benefits that you can offer that are unique to you. Here are a few examples:

- People will buy from a corner shop because it’s the closest shop to them, if they don’t live nearby they won’t. Their location and convenience make them unique.

- Fashion conscious shoppers will buy from a retail outlet because they are the only place that stocks a particular brand, people who aren’t into brands won’t care.

- A bar could attract a specific clientele because they’re the only place to have live bands on a Friday night, people who don’t like live music will go elsewhere.

Take away the unique points from any of these businesses and customers wouldn’t seek them out there would be no reason to. Likewise, if what’s unique about you doesn’t interest your potential customers you’re no better off. A shop full of high fashion brands that nobody likes (or has even heard of) won’t succeed.

Bring that all together and you get a simple process:

1. Make a list of things customers want  i.e. reasons why they buy
2. Make a list of benefits you can offer
3. Rule out anything that the customer can get somewhere else just as easily i.e. things that aren’t unique to you
4. Whatever’s left are the reasons customers will buy from you and the most effective marketing message you can use

Now that you’ve identified what makes you unique, the next step is to start figuring out the groups of potential customers that your ‘uniqueness’ is most likely to appeal to - and how you can build it all into a powerful and effective message.

Mark Nagurski is a Director of FreeForm Media, a practical marketing company that works with small businesses from across the UK and Ireland including New Branch and our clients. To arrange a free consultation you can contact Mark directly via FreeForm’s website at www.freeformmedia.co.uk or speak to us at New Branch and we’ll tell you everything you need to know about him.

It is a fact of life that at some stage almost every business will have a reason to borrow money.

Your business might be at the level where it needs a complete overhaul over how it operates financially.

You might need a more specialist product to aid with debtor days like invoice discounting or factoring, or perhaps looking at releasing your wage roll or order book value. Perhaps you need to look at leasing and of course not forgetting that all things can be leased these days, so broaden your horizons and perhaps that new networking computer system, you keep putting off as you lack the immediate cash, can become a reality

These are the simple rules for planning and starting your own business.

1. What’s your product or service? (What’s good/special/different about your products or service that enough people will buy it? And importantly is this something that you have a real passion for? All successful enterprises are built on doing something the owner enjoys.)

2. What does it cost to make/buy in/provide the product or service? (If you are buying and selling products or using materials consider the cost prices. If the main resource is your own time then attach a cost to your labour that reflects your available time for the work and the wage you need to draw. Divide your required annual wage by the number of work hours available to you, and this is your notional hourly labour cost.)

3. What price will the product/service sell for? (Ideally small businesses need a healthy profit margin or mark-up - doubling the cost is good if the market will accept it. A mark-up of less than 50% is cause for concern unless you are selling products in relatively high volumes or values. Price your products/services according to what the market will pay, not according to your costs. Take into account your competitors and what they charge and their relative quality. Service businesses that use only the person’s time are often very attractive and profitable because there is no added complication of buying and holding stock - hence why window-cleaning, sign-writing, repairs, gardening, decorating, tutoring, writing, therapy, training, coaching and consultancy, etc., are such good businesses for people who prefer a simple approach to self-employment and enterprise. Consider the effect of VAT especially for consumer businesses - ie., selling to the general public - assuming your business is or must be VAT registered. Private consumers of course are more sensitive to VAT than business customers who can generally reclaim VAT should you have to add it to your prices.)

4. Who will buy the product/service? (Identify your customers and market. Do you know this for sure? Test your assumptions: this is a critical part of the proposition and generally benefits from more thought and research to confirm that a big enough market exists for your idea. Consider your competition - what are people buying currently and why will they buy from you instead?)

5. How much/many do you need to sell in a year? And how many customers do you need? (This is a vital part of the proposition to confirm that the gross profit (the difference between costs of bought in products/labour and sales revenues) covers your/their financial needs (including a living wage and other fixed costs of running the enterprise. Again remember the affect of VAT on your selling prices if applicable.)

6. How will people know about the service/product? (You need to understand what advertising/marketing/enquiry-generation is necessary - activity and cost. There is usually a cost for generating new customers, especially in the early stages of a new enterprise. Once the business is established, say after six months to a year, word-of-mouth referrals are for some businesses all that is required to produce new customers - especially those based in a local community, but virtually any new enterprise requires marketing at its launch.

7. Does all this add up, and better still provide a cash surplus at the end of a year? - if so then it’s probably a good business model.