Going self-employed part 2
In the December 2018 issue of Inside Time I wrote about the concept of going self-employed and how important the planning stage was. Whilst it is great to ‘talk’ about your business there is something very real about putting it into the ‘written word’, so that others understand the business and ultimately can invest in it.
At the heart of your business planning should be the Business Plan itself. This is a working tool that should be continually updated, even when your business is operational.
Having a Business Plan and promise of funding pre-release can demonstrate your seriousness about ‘getting on with your life’ after release.
The Business Plan
A Business Plan is a detailed written document that encapsulates all aspects of your business including your business objectives, strategy, sales and marketing plan and probably the most important of all – financial modelling.
A Business Plan helps you to think about your business, including:
• Setting out your goals and aspirations;
• Clarification of your business idea;
• Financial modelling;
• Uncovering any potential weaknesses.
Most funders, particularly banks, will require a Business Plan to show that you have thoroughly thought about your business and that lending to you is a sensible risk.
Key areas of a Business Plan
Executive summary – is a brief summary of the business and where you get the attention of the reader. It should be ‘punchy’ and ‘to the point’;
Description of the business in more detail – detail of the services you are offering; delivery of that service;
Business structure – are you trading as a sole-trader, partnership, limited company etc?
Your experience in this market – your expertise in the sector/your qualifications;
Target markets – markets that you have identified, including aspirational markets;
Pricing structure – how you are going to price your business – whether by the hour or a unit price – and how you have costed your overheads.
Marketing plan (supported by your research) – including market size;
The people/management – identify who is going to be involved in your business – a brief CV of each;
Competitors within the sector – description of your competitors, and how you will do things differently;
Capital investment (equipment you need to purchase) – any capital equipment you are bringing in to the business and further capital required, such as IT investment;
Key risks – identification of the key risks in your business and how they would be approached by you.
• Cash flows;
• Forward forecasts/budgets;
• Balance sheets.
Website – think about the design of your website; are you running an online shop as part of your business?
Taxation – business registration with HMRC, whichever business vehicle you decide. You will also need to think about VAT registration and MTD (Making Tax Digital).
Funding requirements – these should become clear after your financial modelling above.
Other areas to consider:
• Bank account;
• Accounting software;
• Branding/copyright/patent registration;
• Business cards/letterheads.
CellStudy in January 2019
January 2019 marks a ‘fresh start’ and an ideal opportunity to start writing your Business Plan. I would suggest you start to put some narrative against each of the headings above and each day add something to your Business Plan. You will be surprised by just thinking and writing about your business how the Business Plan will develop. Remember to use the prison library, if you can, and any courses that can be linked to your business.
In the February 2019 issue of Inside Time, I will look at sources of funding for your business, with particular focus on pre-release.
Get your tax affairs in order pre-release
Remember to contact The Tax Academy CIC to review your tax affairs to ensure they are up-to-date. There is nothing worse than being released from prison, then finding out that you have tax penalties and tax debt that need to be resolved with HMRC.