How difficult???

I've finally written my ethical manifesto and wow that was hard!!! It's hard to put into words sometimes what you believe as it's just something you do! Even though my whole business is based upon keeping things clear and simple and being accessible to all, it was still really hard to write. I have learnt a lot from the research though. It is good to be able to say what you believe in as it gives your business added credibility which in my opinion is so important and yet so rare these days!

Page Content

I'm really pleased with the Page Content sheets I've created as I feel like I'm learning so much about business and it also makes me look more professional. I'll change them if they don't quite work, but at least I can test them out with Stepping Stones and see

I still do want to produce a brochure of some kind, or put the info on to a letterhead until I've the money to get some printed

Client Meeting

I met with a client yesterday about a potential website. It was very beneficial because I haven't been to see anyone that I don't know before! My first thoughts were that I didn't have anything other than the website to show. So I put together my selling points onto a letterhead. I took this along with the prices from my website page just on A4 pieces of paper, a blank brief and my business card

I didn't feel as prepared as I could be however. The client asked lots of questions about me and my work so I think I need to gather together a portfolio (even though they can view them online), and I would also like a professional looking brochure (either 1/3rd A4 or A5 size) to back me up.

One other thing that came out of the meeting was that the client wanted someone to write all his content for him. This is not something I currently offer as writing is not my forte and I don't have the skill to produce something as professional as what he's looking for. So I've asked a couple of people to quote me for copywriting and I'll add this as a service in future

I think I've learnt a lot from this meeting and feel excited about other potential meetings.

Final Project Thoughts

I've just started thinking about the Final Project really and do some research. All three of us on this course are collaborating and have come up with a project that we can all hopefully work on together! The project is FOI (Fragment of Imagination) who is a school band and the singer (Bethany) is Gavin's daughter!! They are really good so we want to do them justice.

We need to write a brief so Patrick can check that it will be good enough to satisfy the brief fully. So I've asked Bethany who the band's influences are. I've added links to all the bands websites and you know what... I really like them! Especially Paramore who I'd never heard of before! I've heard some of the songs - I recognised them when I played them on the website. I'm a big fan of Evanescence anyway and I also like the others. I'd never heard of 30 Seconds from Mars but from what I heard they sound good too. This has made me quite excited about this project and I want to come up with some really good work for them!

I want to use Flash which I have used before but could do with developing my skills somewhat. Also it will be very interesting trying to come up with something accessible as a lot of these hip and trendy websites are so hard to use!

Stepping Stones Presentation

The presentation with the client was very laid back as I know David and Shell well from when my son used to go to the nursery. But this was good because they knew I would be honest with them rather than some companies who may use hard sell techniques to get the business but don't back it up!

I am a little worried however due to the sheer amount of information that is apparently out of date on the current website as it means I'll have to wait for the text from them. With the deadline for this project looming in a couple of months (and Christmas inbetween!) this leaves me feeling a little nervous. I'll have to make sure the website's all built and ready so I can put a bit of pressure on them!

I'm feeling much more focused now and ready to crack on with some work. I really believe in my business and want to succeed at this.

There may be opportunities for upselling with the nursery too. I will suggest producing stationery based around the new corporate identity, starter packs and visitor brochure

PDP 6 Presentation

I presented to the group where I'm up to so far with my PDP 6 project. It went very well so I was delighted. I took Gavin's advice from my last presentation and took bulleted notes of the information on my blogs. Because of this my delivery was much more concise and meant I didn't get sidetracked too much. I also felt a lot more confident which was great!

The others all seemed really impressed with my company branding - especially the HNC/HND students! This was amazing for me as I always felt like I had so much to learn. They were asking me lots of questions which I could answer and could answer confidently! It was a very good experience.

Patrick was pleased too as he thought we may be falling behind as he hasn't watched over us this year like he did last year. I do feel as if I know where I'm going now and what I need to do to complete the first two projects. I'm well on with the other project (PP 6) , I just hope that the customer gets organised enough to get everything to me on time!

Designs almost there

I'm finally happy with two designs for my client Stepping Stones and just need to decide how the other pages will look before presenting them. I'm so pleased with how they've turned out. If anything I think design three would look nice with rounded corners like design one!

It's given me a boost this, as I always thought my downfall was the design and I've never been over confident about it. Building a website is different as I feel very confident, especially now that I've learnt a good solid way of building them. But now I'm proud of myself as I've come up with some designs which are as good as if not better than the best of his competition! Hopefully I'll speed up too and be able to design websites at this standard a lot faster!

I'm quite chuffed actually!

I'm really pleased with how the Personal Project is going. After feeling like the designs were really amateur I think they're looking much nicer now. I don't want them to be too advanced as they need to be fairly simple to appeal to the target market and not be too different to the competition. But overall it's good, and I'm happy!!

Personal Development Plan 6 Progress

This is going ok too. I need to do more to the Action plan, update my cv and look on websites that the brief recommended. Also to do is interviews (I've done two more - just need to write them up). I need to update my financial information too and upload the extra corporate id stuff I've had printed. All in all it's going well.

I'll update on the marketing activities I'm doing too as that's all relevant to this project

Personal Project 6 Progress

I'm really pleased with how this project's going so far. I think the initial designs all have potential to be really good. I think they need pepping up a bit so they look more professional and easy enough to build before I present them to the client. I'll do a bit more research into other websites I like, not just childcare websites as the examples on the whole are really poor. I want to introduce a bit of Web 2.0 style which makes elements look more 3d therefore a lot nicer and more modern. A bit of work to do still then!

Full steam ahead?

I'm finding it quite hard to get motivated with the personal development project as I know where I'm going and what I want. The main thing that will help me move forward now is marketing and also getting comfortable with the design process. I still prefer the building of websites once the design's complete because I can just sit and get on with it! Designing is hard because I need to research a lot and I need to wait until I get inspired. I find that quite annoying in some ways. But I presume it's like a muscle that needs exercising - the more I do it the easier it'll become!

I'm a real company!

I'm so excited because I now have some business cards and leaflets! It shows that I am a real company and I mean business (excuse the pun!). They look really good. I've just ordered some letterheads and compliment slips too so I can send out some personalised letters with a leaflet to potential clients.

I am also attending a Christmas shopping evening at my son's school. I am going to draw a picture of someone there so people can see what I do - and also have some Inspired Card & Gift stuff there for sale. Hopefully I'll get some sales on the night to spur us on!

Business

Things are picking up slowly for my business. I have two projects to do now. One which I'll use for the Personal Project 6 and one for a friend who runs his own specialist transport company. I'm starting to form a set way of doing things now which is good as I like routine. I think this course has really helped that process of being very methodical and thorough. I do believe this is necessary if I'm going to be a top web designer.

I am itching to learn new technology though, so when I've plenty of money in I'll start studying Flash and SQL more. Flash will be for creating moving elements on a website. This is good actually as even though my philosophy is to create simple websites, I still think there is room for the technology if used sparingly. It could be a good project to research how Flash can be used and still produce an accessible website! Hmmm could really get into that! SQL is about creating databases which are fundamental for search and results pages, customer login and registration forms and product pages.

Decisions

Well what a night college was last week! We decided on a project between the three of us - a band! Gavin's daughter Bethany is in a band called FOI (Fragment of Imagination) although they may be changing their name shortly. I will do the website, Gavin will do the logo, PDFs, drum kit sign etc and Louise will do the CD cover and any 'visual styling' (phrase I came up with!!) to do with the band. It should be very successful if we don't fall into any cliches and we are all excited about it which is important!

Final Project

On Wednesday Gavin, Louise and myself are going to brainstorm ideas for the final project. We may do something together as long as it allows us plenty of opportunity to be creative enough individually. Obviously I want to do a website but that's as far as I know right now. It's difficult for me really because I want to learn something quite technical such as SQL or PHP but that's not graphic design enough. Hmmm will have to have a serious think about it

Presentation

I did my Wii for over 65s presentation last night - it went well! Comments were:

Patrick really liked the slogan "How young can you become?" especially because of the insinuation that the Wii will make you healthier through activity, but also younger as will be using technology. He liked the fact I'd looked into how to really reach them (through the demonstrations in the street with older people playing them and younger players to entice the age group in through their children/grandchildren). He also appreciated the fact I'd phoned the stores up to see if over 65s actually went in and what games would be suitable to them. He also made a comment about me speaking to the target group (my parents) to get their opinion because however much we want to we can't speak objectively about them from our limited perspective

All the group liked my ideas and thought that some of them could really work. Bringing in a Wii game and a Wii controller helped for people that hadn't seen them before, plus it helped bring the presentation to life a bit more. Gavin mentioned that my research was very good however I could do with making it a bit more punchy by bullet pointing it. I take that on board as I do go overboard with research!

Overall very good. Just an evaluation to write now

Game Ideas

I really like the 'Wii Generations' and the 'Wii Wish You Were Here' ideas! Now just got to develop them into an advertising strategy! This is where I'm less comfortable. Initial ideas and research is definitely my forte but putting it into a final (even rough) plan seems a bit scarier. Why?? I think I'm nervous about missing something major or making it look a bit primitive. But heyho just need to get on with it and give it a go

My parents

I had a really good chat with my mum & dad and I think they did come up with some good suggestions. They also said it would have been a good idea to go into a Care Home and ask people there what they thought about it all. If I'd had more time I would have done that as I think it would have been very interesting!

Wii Research

I read a Guardian article about Wii's and I've picked these two bits out as very interesting. They may spark some ideas off in my head!


"And while Nintendo has made some savvy marketing moves to ensure that non-traditional gamers will understand how easy the console is to use, a big part of its success has been the spontaneous proliferation of Wii parties, where groups get together for a night of Wii Sports and similar offerings...

...Wii gaming is said to be causing quite a stir on Norwegian Cruise Line vessels, where cruisers of all ages line up for the daily tournaments. The consoles can also be found in physical rehabilitation centres, helping injured soldiers or stroke victims regain their motor skills."


I like the idea of the daily tournaments. I could come up with a game that is played in Care Homes... "Battle of the care homes!" or "The care home leagues!" to really get some senior citizens more active. I'll probably have a look at a couple of care home websites to see if any activities are shown on there

Wii Sellers

I'm getting into this project more now. I'm really pleased actually, because I thought of phoning a Wii Seller. I pretended that I was interested in buying some games for my parents and asked what games were suitable for the over 65s. I wish I'd asked for more specifics such as how many people of that age buy them. Actually I think I'll phone a different seller and ask them

Ok so this time I came clean... and told them what my project was and it was quite enlightening. I'm really glad I asked! I'll report it in the PDP6 blog.

I think next I need to look into the competition and see what games they sell

Back to the grindstone!

Wow... how weird is it getting back into college work again!
I need to get off Facebook and get into here!

So Wednesday was our first day back, and it was nice not being the first years again. Can't believe there's only one year left to go! Exciting!! I am really enjoying this course though. I am amazed at how much I have changed and where it has taken me! The result is a website that I'm so so happy with: www.refreshingwebdesign.co.uk It's taken a long long time, but I wanted to make sure it looked professional and putting across the message I wanted to put across! I think it does that so I'm chuffed.

So the new project. Hmmm need to get my head in gear again, and it's not been easy so far. I love the brief and can think of some ideas but getting back into methodical researching and notetaking is quite odd! I'm sure I'll manage it soon enough. Gotta do as it has to be in for Wednesday! Better get cracking!!!

Back to work!

So much has happened this year!

I was made redundant in February, so worked in a school temping as a receptionist. All the while I was continuing to do work for the previous company on a freelance basis. This involved designing adverts for Autotrader for Iveco and Fiat vans.

Gavin (also on the course) recommended me to his printing company, Siddalls. They phoned me up and within a week I was working there as a graphic designer! This provided me with invaluable experience as I really didn't understand anything with regards to getting things ready to print! I learned more about certain things and also some printing jargon like :

• litho printing (which only use for letterheads that are going through laser printers)
• gripper edge
• dot-gain
• work-and-turn
• creep
• trapping
  
• CMYK & RGB
• pantone inks printed in CMYK
• Printing.com
• finding fonts through certain websites
• Mac computers!
• Photoshop & creating masks
• Tiff files
• Bitmap images
• editing using Adobe Acrobat
• Freehand
• Quark
  

However, even though all this knowledge really helped me, I was getting much busier with my own work that I was working most nights and very late. I realised that if I was to actually get any web design business I just wouldn't have the time to do it! So with much deliberation I decided to hand in my notice and go it alone!

So without a website(!) I still decided that it was the right time to set up on my own and so far I've absolutely loved it! I'm reclaiming a social life and am so much happier being my own boss and setting my own goals and deadlines. I've earnt the same amount of money, although I'm still waiting for some to come in! I'm finding it very exciting with a few prospects in the "offing" and with the website due to be completed in a few days, I'll soon be able to get out promoting my company!

Woohoo!

I've finished!!! Fantastic! Just got to put together some of my work from this whole first year for the end of year degree show. I don't think I'll have much to show but you never know... it's amazing how things come together at the last minute.

I'm really pleased I've finished tonight too as it's my son's 6th birthday tomorrow so apart from gathering stuff for the degree show I can relax and enjoy it with him!

Now I need to catch up on everything else that's been left behind! Wow I'm going to be so busy! I've a web site to do for a customer, a horse portrait, leaflets to get together for a fair at my son's school (for portrait business), of course the exhibition at Usborne to prepare for, my son's room to decorate, a wedding to go to and bookkeeping to catch up for a cemetery! That's all in the next two weeks!!!

Nearly there

I'm really pleased with how things are going with this course. I've learnt so much over the year!! I've completely changed the way I design web sites and I've created my very first accessible web site (which is actually an elastic design - I believe better than just accessible). I've also created a fantastic range of bra cards which I'm extremely proud of. When I first began the project I really didn't know what I was going to create and to come up with something that we're definitely going to launch is brilliant! It's also had the seal of approval from a Body Shop Area Manager which is great. I was ever so slightly disappointed that a couple of the samples were cut off centre and still had crop marks on but they're only samples and I'm certain the quality will be "spot on" for the real thing

I think this course has really shaped me into the business person I want to be. Going from the initial desire to run my own business to now earning £3-400 a month through my own efforts. For less than a year's trading (without a web site!) is good going. I don't believe this would have happened without the course so for that I'm grateful

I've also got a new job now (thanks Gavin!). I'm now a graphic designer for a local printers. I'm so pleased as I'm enjoying it so much although it has been quite a challenge! I had no previous printing experience at all and little/no experience using Freehand & Quark but certainly feel confident using Freehand after just a month and I've also picked up the printing side of things very quickly. I'm really excited about my future!

Another mountain to climb

It feels again like I have another mountain to climb! I've only 3 weeks left and so much left to do! It's quite a challenge at the moment because spare time is going to be very sparse over the next two weeks, it's worth it though! I'm really enjoying the marketing aspect of the course. I'm writing everything up into the log now which is making me more focused. Just got to finalise everything now really.

Very excited about what's happening with Inspired Card & Gift Co with regards to Usborne. That will all take off in the holidays so hopefully I'll have quite a lot to feed back to the group when we return in October.

I received mixed reactions to the bra designs which I'm actually really surprised about. I thought they would be popular with everyone, but then that's from my own perspective. This is what I'm beginning to understand about marketing and that you need to pretty much discount your own opinions and only listen to your potential customers. I will weigh up all the feedback and see which are the most popular designs. This will be difficult as it seems to be a matter of personal taste. I'll make some changes to the most daring ones (Good look) as they did stimulate quite strong objections from a couple of people so I'll tame them down a little. I'm thinking about a pair of glasses that looks like a bra or something along those lines. Either that or a pair of horseshoes as the cup - but I don't want it to seem too crude so we'll see. It's difficult because the good look card is hard to portray with humour without being smutty, yet it's a sentiment we really want in the range!

I'm almost finished with the Wrenco Ltd website too. Just got to change the font of the company name and change the red on the side panels. Oh and I've still got images to try and put in at the top right. It's hard to do with floating (CSS style coding) because of browser support but I'm going to keep on going until I've grasped it!

The blue matching the colour of the jetwashing clothing went down well with the class so I'm glad I put that in. An extra colour seems to have balanced the colour scheme as it never felt right just red, black, white and grey

Usborne Books

Even more exciting news is that Christine and I (Inspired Card & Gift Company) are exhibiting and selling stock at their conference on 2nd July. The company have been absolutely fantastic and are really behind their staff which is an inspiration to see in itself. They believe our products are just what they're looking for so they can motivate and inspire each other! EXCITING!!! There should be 200-300 ladies eager to buy our stock!

I'm really proud of us as it was only through marketing that this came about - sending samples and a letter of introduction to the heads of direct sales companies. Usborne were very keen from the outset and we hope it'll be a mutually beneficial partnership!

Watch this space!!

Long lost log

It's been so long since I last logged anything! So what's to report... oh my so much!!!

Well since 19th March I've been working in a school 3 full days a week - which was good but hard as I've not been used to working full days for some time! The job's just as a receptionist which wasn't very challenging but they were lovely people. The main trouble was that it wasn't adding to my skill set at all - or so I thought! I've learnt to use Publisher (which is a bonus), and also the IT Technician introduced me to Web 2.0 (a style of web design) and also Elastic web design (a development from CSS web design style coding). So it was definitely worth doing!!

Anyway I was put forward by my good friend Gavin to the printing company he uses (Siddall Colour) as they were looking for a graphic designer urgently. Anyway I went for the interview and got offered the job on the spot! I'm so chuffed as it'll really add to my skills and give me confidence as a designer! Also it's giving me vital Mac experience as I've only used them briefly at college

So quite a lot has happened!!

The last two projects from this year are going well so far. I'm so pleased with the progress of the creative graphic design project (bra cards). Once the photos are taken I'll be even happier. And the Wrenco Ltd web site is coming along too - slowly! I'm designing it in an Elastic format which is taking time as I'm teaching myself as I'm going along. Exciting stuff though as once I've done that site, I'll be ready to design projects for lots of customers (hopefully!)

Woohoo!!!

Being Creative

It's not as easy as it looks!!! The main problem I think I'm going to have is that at Inspired we mostly think of a really cool idea, plan it then source a product to accommodate. This module requires a lot of graphic design which makes it a lot more difficult to achieve the brief's requirements. Hmmmm... we shall see!

New Creative Project

I was going to do my new Creative Project as part of my Web building and try to incorporate accessibility into it. However after lots of thought I'm instead going to devise a new concept for the business Inspired Card & Gift Co, which I part own. The company www.inspiredcardandgift.co.uk sells inspirational and motivational cards and gifts to the Direct Sales industry. The target group are generally females aged 20 - 50. This should give me a very wide scope to be extremely creative!

New Beginnings

Well it's been a while! Quite a lot's happened to me over the past few weeks! I was poorly after finishing the last two projects, which took me two weeks to get over properly. And then... I got made redundant!!! I was really upset as the part time hours in school time was great. But obviously not meant to be. The thing is now I'm really enjoying being at home and SO want to make it pay self employed. It's very odd being at home and it feels like a holiday!

Anyway back to work... college work that is! I'm going to start on my new college project.

Refreshing Personal Branding

I've done quite a lot so far on my personal branding. I feel quite happy with what I'm putting in for the deadline, but I'm sure it'll be tweaked in the next few weeks! The wording for instance in the few words on each document doesn't quite sit right so need to give that a bit more thought to the flow. Really pleased though. Next is the website! But this will take time as I need to make it accessible of course!

Multicultural Project - Ethnical Advertising Task

http://kramerschronicles.blogspot.com/2008/01/royale-commercial-continues.html
http://kramerschronicles.blogspot.com/2008/01/shaft.html
http://kramerschronicles.blogspot.com/2008/01/royale-slj-follow-up.html
http://kramerschronicles.blogspot.com/2008/01/royale-commercial.html
http://kramerschronicles.blogspot.com/2008/01/royale-teaser.html
http://kramerschronicles.blogspot.com/2008/01/quick-projects-multiculturalism.html
These are the links to Gavin's blog as we did this project as a group. He was kind enough to let me link to his reports! Cheers G

We had a good evening doing this project. It's amazing to think really that we created a whole advertising strategy in one evening!

We picked Second or third generation Afro-Caribbean background males aged 18 to 35 and the product we picked was condoms! We looked at the target group first and started with the usual stereotypes, then a bit guilty for doing that. We came up with names like hoodz, hoodies, Shaft and eventually Royale. I'm really chuffed with what we settled on! Well done guys!!

The future for accessibility and me?

So where do I go from here? I have a long way to go before I'm producing websites of a similar standard to how I was before. This worries me slightly but better now at the beginning of a career than later on when I'm established and customers knocking at my door!

Now I've read up so much on accessibility I now need to learn CSS and practise using to see the effects of different techniques. I'm really looking forward to that and hope I can go beyond my previous skills!

Web Designer Trends

Found a really good website! :
http://www.itjobswatch.co.uk

It shows trends and rates of pay for certain jobs. I selected Web Designer for West Yorkshire and was quite surprised by the results. The average hourly rate (over last 3 months) is £22.76 however at the beginning of 2008 it shows the minimum contracted rate to be £8 per hour and maximum to be £14 per hour. Should I change my pricing strategy? I'll keep an eye on it to see what it changes to. I'll see if I can add that into my accounting procedures somewhere.

Found a link about trends on the Modern Life website written in Dec 2007. Shows some nice designs with borders and swirls etc...

Really like the design of attitutedesign.co.uk website. I read through their Predictions and it does fit with previous research I have carried out. Excerpt below:

1) Increase in use of New Technologies – adaptation to new technologies.

As we all know the Internet is becoming more and more accessible - not just in the western world but now across the globe. For all I know you could be sitting in a café in reading this, you could be using a wi-fi hotspot or be accessing this on a mobile phone. The integration of the internet into our lives is meaning the way we interact with almost anything is connected with an online experience. This means we can expect other products which we wouldn’t normally associate with the web gaining features which will feed in from the web. I can see such things as RSS feeds and database logging becoming more main stream.

The increase of broadband connections (consider the new “wiremax” technology) will mean we will see much more rich media and video content appearing. We may see more companies adding video adverts or footage of their latest products in an endeavour to hold the edge over their competitors. Although we need the information in written form so that search engines can pick it up, as visual creatures we all respond better to movies. I think that this will start to become a big part of internet marketing this year.

With screen resolution getting bigger we may see websites become a little larger and not so boxed in. Maybe we can start to see the end of 800 x 600?!

4) Growth of browser based software – webdesign merges with software design

Your browser may start to become your new desktop. Microsoft have recently launched Office Live which is basically an online extention of Microsoft Office. Smaller applications like Google Maps have been around longer. I think we will see an increase in browser based software and possible the start of a shift in the way we think about programmes. Wouldn’t it be amazing if we just logged into a virtual desktop from anywhere in the world which contained all our programmes and files?! The benefits of such a system would be that it could be more secure, easier to use and save the hassel of installing software etc.

So the web designers of today may be the software designers of the future!

5) Web 2.0 Design styling refined

We may see more glassy icons and wet floor effects as the badly applied phrase “web 2.0″ becomes a household term. As a backlash to this it will be interesting as to what we designers do to start the next trend – maybe non-gradient solid block colours will make a come back in 08!?

7) Increase in Green Awareness – more green energy designs

With the western world turning its attention on the worrying fact that we are destroying the planet, we may see the “green” trend continuing. The public will become more and more interested about doing the right thing for the planet and so green-friendly ways of running our lives will increase. Watch the green sector because there will be a lot of activity here in the months ahead.

Logo Design

I'm happy now with my final logo - Yippee!! It's amazing how it's changed so much from the beginning! I really wanted to go down the Ahhh route... ie Ahh how refreshing, but someone commented how it reminded him of Ahh Bisto! Not a good idea then...

Looked into loads of different things... water, bubbles, splashes, refresh computer icon, waves etc but instead I decided on a lemon as it's very refreshing and a lot of the colours (apart from blue) were oranges and lemons. I went so far and really liked it but on trying to reproduce the artwork myself it lost the lighthearted feel and generally just didn't work! So ditched the lemon and stumbled across the twirl tool in Illustrator. I created a lovely swirl by accident but liked it so much, I reproduced it in the logo. With the right font I think it works really well. And the main thing is that I'm really happy with it as I need to live with it for years to come!!

Now I need to do a Business plan and the website! Quite excited about all this but it's very daunting! Once I get started I'm sure I'll be ok...

Research - Cashflow Management

Cashflow management: the basics

Cash is the oxygen that enables a business to survive and prosper and is the primary indicator of business health. While a business can survive for a short time without sales or profits, without cash it will die. For this reason the inflow and outflow of cash need careful monitoring and management.

This guide looks at the key elements of cashflow and at how effective cashflow management will help protect the financial security of your business. It outlines the steps that you can take when dealing with your customers, suppliers and stakeholders to improve cashflow. It also highlights common cashflow problems and how to avoid them.

---

What is cash?

Cashflow is the measure of your ability to pay your bills on a regular basis. It depends on the timing and amounts of money flowing into and out of the business each week and month. Good cashflow means that the pattern of income and spending in a business allows it to have cash available to pay bills on time.

Cash balances include:

• coins and notes
• current accounts and short-term deposits
• unused bank overdrafts and short-term loans
• foreign currency and deposits that can be quickly converted to your currency

It does not include:

• long-term deposits
• long-term borrowing
• money owed by customers
• stock

Difference between cash and profit

It is important not to confuse cash balances with profit. Profit is the difference between the total amount your business earns and all of its costs, usually assessed over a year or other trading period. You may be able to forecast a good profit for the year, yet still face times when you are strapped for cash. For more information see our guide on how to identify potential cashflow problems.

The importance of cash

To make a profit, most businesses have to produce and deliver goods or services to their customers before being paid. Unfortunately, no matter how profitable the contract, if you don't have enough money to pay your staff and suppliers before receiving payment from your customers, you'll be unable to deliver your side of the bargain or receive any profit.

To trade effectively and be able to grow your business, you need to build up cash balances by ensuring that the timing of cash movements puts you in a positive cashflow situation overall.

But bear in mind that having a lot of cash in your bank does not necessarily make good business sense. If you do not need to use it immediately, put spare cash into an account where it will earn a high rate of interest, or use it as capital for short-term investments. Get advice from your bank, accountant or financial adviser.

---

Cash inflows and cash outflows

Ideally, during the business cycle, you will have more money flowing in than flowing out. This will allow you to build up cash balances with which to plug cashflow gaps, seek expansion and reassure lenders and investors about the health of your business.

You should note that income and expenditure cashflows rarely occur together, with inflows often lagging behind. Your aim must be to speed up the inflows and slow down the outflows.

Cash inflows

• payment for goods or services from your customers
• receipt of a bank loan
• interest on savings and investments
• shareholder investments
• increased bank overdrafts or loans

Cash outflows

• purchase of stock, raw materials or tools
• wages, rents and daily operating expenses
• purchase of fixed assets - PCs, machinery, office furniture, etc
• loan repayments
• dividend payments
• income tax, corporation tax, VAT and other taxes
• reduced overdraft facilities

Many of your regular cash outflows, such as salaries, loan repayments and tax, have to be made on fixed dates. You must always be in a position to meet these payments in order to avoid large fines or a disgruntled workforce.

To improve everyday cashflow you can:

• ask your customers to pay sooner - see our guide on invoicing and payment terms
• chase debts promptly and firmly - see our guide on getting paid on time
• use factoring - see our guide on debt factoring and invoice discounting: the basics
• ask for extended credit terms with suppliers - see our guide on how to negotiate the right deal with suppliers
• order less stock but more often - see our guides on stock control and inventory and manufacturing innovation
• lease rather than buy equipment - see our guide on how to decide whether to lease or buy assets
• improve profitability - see our guide on how to increase your profitability

You can also improve cashflow by increasing borrowing, or putting more money into the business. This is suitable for coping with short-term downturns or to fund growth in line with your business plan, but shouldn't form the basis of your cash strategy.

---

The principles of cashflow forecasting

Cashflow forecasting enables you to predict peaks and troughs in your cash balance. It helps you to plan borrowing and tells you how much surplus cash you're likely to have at a given time. Many banks require forecasts before considering a loan.

Elements of a cashflow forecast

The cashflow forecast identifies the sources and amounts of cash coming into your business and the destinations and amounts of cash going out over a given period. There are normally two columns listing forecast and actual amounts respectively.

The forecast is usually done for a year or quarter in advance and divided into weeks or months. In extremely difficult cashflow situations a daily cashflow forecast might be helpful. It is best to pick periods during which most of your fixed costs - such as salaries - go out. The forecast lists:

• receipts
• payments
• excess of receipts over payments - with negative figures shown in brackets
• opening bank balance
• closing bank balance

It is important to base initial sales forecasts on realistic estimates - see our guide on how to forecast and plan your sales. If you have an established business, an acceptable method is to combine sales revenues for the same period 12 months earlier with predicted growth.

Download our sample cashflow projection spreadsheet (XLS).

Note that all forecast figures must relate to sums that are due to be collected and paid out, not invoices actually sent and received. The forecast is a live entity. It will need adjusting in line with long-term changes to actual performance or market trends.

Accounting software

Accounting software will help you prepare your cashflow forecast, allowing you to update your projections if there's a change in market trends or your business fortunes. Planning for seasonal peaks and troughs is simplified and you can also make "what if" calculations. Most banks require profit and balance sheet forecasts as well as cashflow. Many accounting packages will assist with preparing these documents. See our guide on accounting software.

---

Manage income and expenditure

Effective cashflow management is as critical to business survival as providing services or products. Below are some of the key methods to help reduce the time gap between expenditure and receipt of income.

Customer management

• Define a credit policy that clearly sets out your standard payment terms. See our guide on invoicing and payment terms.
• Issue invoices promptly and regularly chase outstanding payments. Use an aged debtor list to keep track of invoices that are overdue and monitor your performance in getting paid. See our guide on getting paid on time.
• Consider exercising your right to charge penalty interest for late payment. Download the guide to late payment legislation from the Better Payment Practice Campaign website (PDF). You can also find a late payment penalty interest calculator at the Better Payment Practice Campaign website.
• Consider offering discounts for prompt payment.
• Negotiate deposits or staged payments for large contracts. It's in your customers' interests that you don't go out of business trying to meet their demands.
• Consider using a third party to buy your invoices in return for a percentage of the total. See our guide on debt factoring and invoice discounting: the basics.

Supplier management

Ask for extended credit terms. Giving your suppliers incentives such as large or regular orders may help, but make sure you have a market for the orders you're placing. Alternatively, consider reducing stock levels and using just-in-time systems - see our guide on manufacturing innovation. You can also see our guides on stock control and inventory and how to manage your suppliers.

Taxation

If you are registered for VAT, it makes sense to buy major items at the end rather than the start of a VAT period. This can often improve your cashflow, because you can set the VAT on the purchase off against the VAT you charge on sales. This may help plug a temporary cashflow gap.

Asset management

Consider leasing fixed assets, eg equipment, or buying them on hire purchase. Buying outright can result in a huge drain on cash in the first year of business. See our guide on how to decide whether to lease or buy assets.

Read tips on getting customers' cash faster at the Better Payment Practice Campaign website.

---

Cashflow problems and how to avoid them

No matter how effective your negotiations with customers and suppliers, poor business practices can put your cashflow at risk.

Look out for:

• Poor credit controls - failure to run credit checks on your customers is risky, especially if your debt collection strategy is inefficient. See our guide on getting paid on time.
• Failure to fulfil your order - if you don't deliver on time, or to specification, you won't get paid. Implement systems to measure production efficiency and the quantity and quality of stock you hold and produce.
• Ineffective marketing - if your sales are stagnating or falling, revisit your marketing plan. See our guides on how to create your marketing strategy and how to reach your customers effectively.
• Inefficient ordering service - make it easy for your customers to do business with you. Where possible, accept orders over the telephone, email or Internet. Ensure catalogues and order forms are clear and easy to use.
• Poor management accounting - keep an eye on key accounting ratios that will alert you to an impending cashflow crisis or prevent you from taking orders you can't handle. See our guides on how to identify potential cashflow problems and how to avoid the problems of overtrading.
• Inadequate supplier management - your suppliers may be overcharging, or taking too long to deliver. Create a supplier management system - see our guide on how to manage your suppliers.
• Poor control of gross profits or overhead costs.

---

Using your cashflow forecast as a business tool

A cashflow forecast can be an invaluable business tool if it is used effectively. Bear in mind that it is dynamic - you will need to change and adjust it frequently depending on business activity, payment patterns and supplier demands.

It's helpful to set up a regular review of the forecast, changing the figures in light of your sales, purchases and staff costs. Legislation, interest rates and tax changes will also impact on the forecast.

Having a regular review of your cashflow forecast will enable you to:

• see when problems are likely to occur and sort them out in advance
• identify any potential cash shortfalls and take appropriate action
• ensure you have sufficient cashflow before you take on any major financial commitment

Using a cashflow forecast to avoid overtrading

Having an accurate cashflow forecast will help ensure that you can achieve steady growth without overtrading. You will know when you have sufficient assets to take on additional business - and, just as importantly, when you need to consolidate. This will enable you to keep staff, customers and suppliers happy. See our guide on how to avoid the problems of overtrading.

It is important that you incorporate warning signals into your cashflow forecast. For example, if predicted cash levels come close to your overdraft limits, this should sound an alarm and trigger action to bring cash back to an acceptable level. See our guide on how to identify potential cashflow problems.

Ideally, you should always have a contingency plan, such as retaining a minimum amount of cash in the business, perhaps in an interest-earning account. This "rainy day" money can be used to meet short-term cash shortages.

---

Cash management in action

The following simple example shows how a small, profitable business can run into unforeseen cashflow problems when it takes on a new large order.

XYZ manufacturer is a small but profitable gift designer and supplier with three full-time staff (including the two owners). It outsources production, but supplies the raw materials itself to save on costs. It then finishes and packages the final product on site.

XYZ does not have any loans or overdrafts. It has a long-term customer base of small gift shops and visitor centres.

XYZ suddenly wins a large order to supply bespoke wall plaques for a chain of stores. The contract promises to double its turnover.

The team takes on an additional employee and works flat out to meet the deadlines. It doesn't notice an impending cashflow crisis resulting from a fall in repeat orders from existing customers combined with a jump in raw material costs.

To make matters worse, the new client keeps changing its mind about designs. A misunderstanding means the first run of goods is rejected, causing a delay in payment and increased production costs. XYZ orders additional materials to make up the shortfall in the run.

By the time the order is complete, XYZ is running an expensive overdraft. Profit margins have been squeezed to the limit and it has lost several of its existing customers. A downturn in the fortunes of the retail chain means that it doesn't place any further orders.

After a lot of hard work, XYZ finds itself back where it was five years earlier.

Tighter cashflow management would have highlighted the fall in repeat orders and rise in raw material costs. XYZ would also have benefited from a client contract that included:

• milestone payments and penalty provisions for changes such as those to designs - eg increased fees
• sharing the cost of additional materials with the new client or getting the client to pay for them

Find an illustration of the impact of the new order on XYZ's cashflow.

---

Refinements to a simple cashflow forecast

There is no single best way to set out a cashflow forecast. However, some refinements to the most basic ways of setting out the information will give you a more sophisticated view of your business' situation.

You could, for example, separate cashflow for business operations from funding cashflow. This gives a clearer picture of the actual performance of your business and is a format that many accountants prefer.

Cashflow from operations

Includes inflows such as:

• cash sales
• receipts from credit sales in earlier periods
• interest on savings

Includes outflows such as:

• payments to suppliers
• hire purchase and lease payments
• expenses - rent, rates, insurance, utilities, telephone, etc
• wages
• taxes and National Insurance
• interest on loans and bank charges

Funding cashflows

Includes inflows such as:

• loans from banks
• increase in share capital

Includes outflows such as:

• dividends paid
• loans repaid

With these two types of cashflow separated you can gauge how self-sufficient the day-to-day working of your business is. A net outflow in operational cashflow is usually an indicator of problems that need to be addressed quickly.

---

Here's how I manage my cashflow

Peter Spivack
Rendezvous

Peter's top tips:

• "Don't sit on your money - bank it daily or the instant it comes in."
• "Shop around - there's always a better deal that will reduce your costs."
• "Monitor the effectiveness of your marketing and modify it as necessary."
  

---

When Peter Spivack and his three partners opened their restaurant, Rendezvous, in Wallasey Village, Merseyside in 2004, they knew sound cashflow management would be a key to success during that crucial first year. As managing director, Peter assumed responsibility for cashflow management.

What I did

Set up systems

"I prepared my first year's cashflow forecast as part of my business plan, which helped me secure a start-up loan. I decided early on that I would review the forecast monthly, although I update the figures on a weekly basis to keep on top of things.

"I started off using Excel spreadsheets, but now I also use Sage accounting software. The software incorporates a range of reporting tools that let me present the information in whatever format I need. For example, I can see average spend per head at the touch of a button.

"I also had a marketing plan and budget from day one. That may not sound like managing cashflow, but it's actually crucial for keeping the cash flowing in."

Manage suppliers

"We arranged with key suppliers to be billed quarterly for the biggest costs. That makes budgeting and planning easier. We also negotiate 30-day accounts with suppliers wherever we can, which definitely helps cashflow.

"We're fortunate that our customers pay for goods and services at the time of purchase, but we still need to control outgoings. I'm always looking for ways to cut costs without affecting quality, such as switching suppliers if necessary and negotiating discounts on one-off purchases."

Use the forecast to spot problems

"It's no good having the figures if you don't actively use them. For example, we used to open at lunchtime seven days a week, as well as evenings. As business picked up, I was considering employing another chef to help us cope.

"I analysed the figures to see how much extra cash we were likely to collect, compared to the increased staff expenditure. I concluded that we would actually be better off keeping staffing levels the same, but only opening Tuesday to Saturday evenings.

"The forecast has also enabled me to spot looming cash imbalances on three occasions. I didn't panic because I could see the problem was only temporary. I used a pre-arranged overdraft facility to tide us over, confident that the money could be paid back the following month."

What I'd do differently

Get accounting software sooner

"Incorporating all the financial information in one place with accounting software has been a great help in managing cashflow and I wish I'd had it right from the start. It also makes it easier to prepare our end-of-year accounts and means I have up-to-date figures whenever I need them."

---

Research - Forecast & Plan Sales

Forecast and plan your sales

Accurately forecasting your sales and building a sales plan can help you to avoid unforeseen cashflow problems and manage your production, staff and financing needs more effectively.

A sales forecast is an essential tool for managing a business of any size. It is a month-by-month forecast of the level of sales you expect to achieve. Most businesses draw up a sales forecast once a year.

Armed with this information you can rapidly identify problems and opportunities - and do something about them.

While it's always wise to expect the unexpected, a well-constructed sales plan, combined with accurate sales forecasting, can allow you to spend more time developing your business rather than responding to day-to-day developments in sales and marketing.

This guide shows you how to put together a sales forecast and a sales plan.

---

A basis for sales forecasts

Sales forecasts enable you to manage your business more effectively. Before you begin, there are a few questions that may help clarify your position:

• How many new customers do you gain each year?
• How many customers do you lose each year?
• What is the average level of sales you make to each customer?
• Are there particular months where you acquire or lose more customers than usual?

Existing businesses

The starting point for your sales forecast is last year's sales.

Before you factor in a new product launch, or an economic trend, look at the level of sales for each customer last year. Do you know of any customers who are going to buy more - or less - from you next year?

In the case of customers who account for a significant value of sales, you may want to ask them if they plan to change their purchase level in the foreseeable future.

New businesses

New businesses have to make assumptions based on market research and good judgement.

Every business can also add in the new customers that it expects to attract without actually knowing who they are, or what they will buy. Simply enter "new customer" on your forecast.

Depending on your type of business, you may want to specify the volume of sales in the forecast - for example, how many five-litre cans of paint you sell - as well as the value of sales. By knowing the volume, you can plan the necessary resources in areas such as production, storage and transport.

---

Your sales assumptions

Every year is different so you need to list any changing circumstances that could significantly affect your sales. These factors - known as the sales forecast assumptions - form the basis of your forecast.

Wherever possible, put a figure against the change - as shown in the examples below. You can then get a feel for the impact it will have on your business. Also, give the reasoning behind each figure, so that other people can comment on whether it's realistic.

Here are some typical assumptions:

The market

• The market you sell into will grow by 2 per cent.
• Your market share will shrink by 2 per cent, due to the success of a competitor.

Your resources

• You will double your sales force from three people to six people, halfway through the year.
• You will spend 50 per cent less on advertising, which will reduce the number of enquiries from potential customers.

Overcoming barriers to sale

• You are moving to a better location, which will lead to 30 per cent more customers buying next year.
• You are raising prices by 10 per cent, which will reduce the volume of products sold by 5 per cent but result in a 4.5 per cent increase in overall revenue.

Your products

• You are launching a range of new products. Sales will be small this year and costs will outweigh profits, but in future years, you will reap the benefits.
• You have products that are newly established and that have the potential to increase sales rapidly.
• You have established products that enjoy steady sales but have little growth potential.
• You have products that face declining sales, perhaps because of a competitor's superior product.

For new businesses, the assumptions need to be based on market research and good judgement.

---

Developing your forecast

Start by writing down your sales assumptions. See the page in this guide on your sales assumptions.

You can then create your sales forecast. This becomes easy once you've found a way to break the forecast down into individual items.

• Can you break down your sales by product, market, or geographic region?
• Are individual customers important enough to your business to warrant their own individual sales forecast?
• Can you estimate the conversion rate - the percentage chance of the sale happening - for each item on your sales forecast?

For example, you might predict that a customer will purchase £1,000 worth of products. If you estimate that there's a 70 per cent chance of this happening, the forecast sales for this customer are £700, ie 70 per cent of £1,000.

Selling more of your product to an existing customer is far easier than making a first sale to a new customer. So the conversion rates for existing customers are much higher than those for new customers.

You may want to include details of which product each customer is likely to buy. Then you can spot potential problems. One product could sell out, while another might not shift at all.

By predicting actual sales, you're forecasting what you think will be sold. This is generally far more accurate than forecasting from a target figure and then trying to work out how to achieve it.

The completed sales forecast isn't just used to plan and monitor your sales efforts. It's also a vital part of the cashflow. See our guide to cashflow management: the basics.

There is a wide range of sales forecasting software available that can make the whole process much simpler and more accurate. This software generates forecasts based on historical data. If you are considering buying software, get advice from your trade association, your business advisers and businesses of a similar size and in similar markets.

---

Avoiding forecasting pitfalls

Five common forecasting pitfalls are:

Wishful thinking

It's all too easy to be over-optimistic. It's a good idea to look back at the previous year's forecast to see if your figures were realistic. New businesses should avoid the mistake of working out the level of sales they need for the business to be viable, then putting this figure in as the forecast.

You also need to consider if it is physically possible to achieve the sales levels you're forecasting. For example:

• one taxi can only make a certain number of airport trips each day
• a machine can only produce a given number of components on each shift
• a sales team can only visit a certain number of customers each week

Ignoring your own assumptions

Make sure your sales assumptions are linked to the detailed sales forecast, otherwise you can end up with completely contradictory information. For instance, if you assume a declining market and declining market share, it's illogical to then forecast increased sales. For more information, see the page in this guide on your sales assumptions.

Moving goalposts

Make sure the forecast is finalised and agreed within a set timescale. If you're spending a lot of time refining the forecast, it can distract you from focusing on your targets. Avoid tinkering with the forecast, even if you discover it's too optimistic or pessimistic.

No consultation

Your sales people probably have the best knowledge of your customers' buying intentions, therefore:

• ask for their opinions
• give them time to ask their customers about this
• get the sales team's agreement to any targets they will be set

No feedback

Having built your sales forecast, you need someone to challenge it. Get an experienced person - your accountant or a senior sales person - to review the whole document.

---

Creating a sales plan

The questions you should answer in your sales plan are:

• What are you going to focus on?
• What are you going to change?
• In practical terms, what steps are involved?
• What territories and targets are you going to give each salesperson or team?

The sales plan will start with some strategic objectives. Here are some examples:

• break into the local authority market by adapting your product for this market
• open a shop in an area that you believe has the potential for generating lots of sales
• boost the average sale per customer

You can then explain the stepping stones that will allow you to achieve these objectives. Use objectives which are SMART - Specific, Measurable, Achievable, Realistic, Time-bound.

Using the example of breaking into the local authority market, the stepping stones might be to:

• hire a sales person with experience of the local authority market on a salary of £24,000 by the beginning of February
• fully train the sales person by mid April
• ensure that any changes the product development team has agreed to make are ready to pilot by the beginning of April

As well as planning for new products and new markets, explain how you're going to improve sales and profit margins for your existing products and markets.

It is often helpful to identify how you will remove barriers to sales:

• Can you increase the activity levels of the sales team - more telephone calls per day, or more customer visits per week?
• Can you increase the conversion rate of calls into sales - through better sales training, better sales support materials or improved sales incentives?

---

Research - Market Research

Market research and market reports

All successful businesses need to have a close understanding of potential and existing customers and the marketplace they work in.

This understanding allows you to target customers, sell effectively, compete with other suppliers and spot new opportunities. Performing market research on potential customers and your competitors will help you to gain this vital knowledge.

You can build a picture of general trends using published market information - from free government statistics and data to paid-for market reports from commercial providers. Your own contacts and sales records can also be a great resource.

You can add to your knowledge by using field research - from surveys and discussions to product tests - to investigate customers' attitudes and examine questions specific to your business.

This guide explains what you need to know about market and customer research, how to build your knowledge and how using field research can fill in the gaps.

---

Customer research: what you need to know

Undertaking customer research on loyalty, satisfaction and service can make a big difference to your business. You'll need to focus your efforts on finding out as much as you can about existing and potential customers. If you can work out how they make their buying decisions, you can adapt your sales methods and techniques to fit your customers' needs.

For business customers, you'll want to know how big their businesses are, what sectors they're in, and who makes the decision to buy your product or service.

If you're targeting individual consumers, it may be useful to know such things as their gender, age, occupation, income, lifestyle, attitudes or social class.

For your existing customers, try to find out:

• what they think about your products or services
• why they need your product or service - this may be different from what you believe
• why they buy from you and not your competitors
• what they think of your prices
• what they expect from you, eg reliable delivery
• how they rate your customer service
• how they think you could develop or refine your products or services

For your potential customers, try to find out:

• who your potential customers are and what groups they fall into
• how many potential customers there are
• how much of your kind of product or service they already buy from your competitors
• the criteria on which they make buying decisions
• what it would take to get them to buy from you
• what developments they expect in your product or service
• when and where they prefer to buy

See our guide on how to know your customers' needs.

---

Information on market trends and competitor intelligence

Getting a good understanding of market trends is important if your business is to make the most of its opportunities and remain competitive. You will also need to understand your competitors and keep an eye on what they are doing.

Try to get information on:

• Demand for your product or service - is it growing or shrinking?
• General economic and market trends.
• How customer requirements and buying behaviour could change in the future.
• What new products are in your competitor's pipeline - could they make yours look outdated?
• How competitors are changing - what are their plans?
• What competitors offer and the prices they charge.
• How your competitors advertise and promote themselves.
• Any forthcoming legislation which could affect your market.

---

Using market reports and other data

Once you've identified the information you need, you can start to draw it together. Initially it's worth looking at information that's already been published, eg market reports, official statistics, trade publications, etc.

Some of this information is free, but some you'll have to pay for. You can obtain market reports and other information from a wide range of sources:

• Your local business reference library is a good starting point.
• Your trade association will have information about your market sector and about any relevant trade publications. Find your local trade association on the Trade Association Forum website.
• You can read official statistics on the economy, population and social trends at the National Statistics Online website.
• Reports in business magazines and the business pages of national newspapers can be informative.
• Local authorities and Chambers of Commerce can provide local information. Find your local authority through our Contacts Directory, or find your local Chamber at the Chamber Online website.
• UK Trade & Investment is a useful resource for exporters, with sectoral information for more than 200 countries worldwide. You can read country overviews on the UK Trade & Investment website. You can also read sector reports on the UK Trade & Investment website.
• The Internet contains a wealth of business data. Search engines such as Google and Ask can aid searching, while directories such as Yahoo make it easy to look for information by sector.
• Commercial publishers of market reports include KeyNote, Euromonitor, Mintel, Datamonitor, The Economist Intelligence Unit (EIU) and Market & Business Development. Reports can often be purchased from the publisher's website.
• Don't neglect your business' own data. Analysing your sales records or levels of enquiries can provide useful insights. Finally, talking to customers and monitoring their buying habits and how they behave is one of the best methods of market research.

---

Interpreting market information

Though there's a lot of readily available market information, you need to be careful how you interpret it.

External data might not be in a useful format to use easily. It may have been collected for other purposes or be from a range that doesn't tally with your target market.

Beware of out-of-date market information. This can be misleading, as the market may have changed significantly since the information was published. It can be particularly hard to tell how recent any information published on the Internet is. Some information on the web can be unreliable or biased.

Remember that statistics can sometimes mask the true picture. For example, an "average" income for the population in your area might conceal a high proportion of low earners - meaning fewer people can afford your product than it appears.

The same principle applies to your own sales records - one or two major customers could distort the picture.

Most of all, don't make up your mind in advance. Finding market information that simply confirms what you already believe is easy - but only a realistic picture of your customers and markets will be useful to your business.

---

The basics of quantitative and qualitative field research

Published market information and your own data can tell you a lot about your customers and your market - but it's unlikely to tell you everything.

Field research can be quantitative or qualitative:

• quantitative research provides statistical information - for example, how many potential customers there are and what their average incomes are
• qualitative research examines people's feelings and attitudes towards your product or service, and what motivates them

You'll probably need to carry out some of your own quantitative and qualitative field research - talking, observing or carrying out product tests with customers and potential customers. This can help you to:

• test customers' reactions to a new product, and adapt it if necessary
• investigate attitudes of customers and potential customers
• find information specific to your business or a local market, rather than the market as a whole

---

Planning field research

Good planning is essential if you're to get the right results from field research.

First you need to decide how to collect the information you want. Popular methods include:

• A survey, using a fixed set of questions - the most effective way of carrying out a survey is typically with face-to-face interviews, but phone interviews, online questionnaires and postal surveys are also possibilities.
• A discussion - discussions are good for qualitative research as they allow you to explore people's attitudes in more detail. Discussions are often held in small focus groups.
• Observation - investigate what people do rather than what they say. For example, look at how shoppers react when they pass a particular point-of-sale display.
• An experiment - you might, for instance, run a blind taste test of your soft drink against your competitors' products. Alternatively, you could lend your new product to a customer and ask for feedback.

Once you've decided how you'll gather the information, you'll need to work out how to make it happen. Budget how much time and money will be needed - the time involved will normally be significant.

You'll need to design your research. For example, drawing up a questionnaire or deciding how you'll run a focus group.

Then there are the logistics. If you want to carry out street interviews, make sure your researchers have the required local authority licence and identity card. If you want to run a focus group or conduct face-to-face interviews or product tests, where will you hold them? Where will you find the participants? And who'll run the session?

Consider carefully whether you've got the skills in-house to do this. If not, it's probably a good idea to get a market research agency to do your research for you.

See the page in this guide on tips for successful field research.

---

Tips for successful field research

Ask the right questions

Badly phrased questions produce misleading results. Avoid closed questions which encourage the answer "yes" or "no". A stationery shop that asks customers if they intend to buy pens in the next year will find out just that - but they won't discover what type of pens, eg specially engraved pens or cheap biros.

Talk to the right people

A survey at a railway station, for example, will get answers from commuters, but if you're targeting people who stay at home with young children, this won't be representative of your market.

Talk to enough people

A survey, for example, of two people won't get you enough information. Some market research professionals suggest asking at least 150 people in order to get a complete picture.

Keep research impartial

It's easy to encourage people to give the answer you want. For example, by asking leading questions or smiling at the "right" answer. Discussions, where you're not working from a list of set questions, are particularly easy to distort. And in a focus group, individuals with strong opinions may influence the views of others.

Interpret results with care

You need to make sure you draw the right conclusions from your research. Bear in mind that people may distort answers in the hope of affecting what you do. For example, they might say they would be interested in a product "if the price was lower". Qualitative research - where you're investigating feelings and attitudes - can be particularly difficult to interpret.

Be realistic

It can be tempting to pick out results that confirm what you want to hear, and ignore the rest. But ignoring negative results could damage your business. Be prepared to modify your plans if necessary.

If you don't have the time or skills to carry out research yourself, consider using a market research agency. See the page in this guide: should I use a market research agency?

---

Should I use a market research agency?

Though you may be able to do your own field research, it may be better to use the services of a market research agency.

• It may be more cost-effective to outsource the job to professionals - see our guide on outsourcing.
• Market research professionals are likely to get better results. They have experience in designing survey questionnaires, running focus groups and asking the right questions.
• Customers may find it easier to be honest with an outsider, particularly if they have a complaint.
• Customers may worry you're trying to sell them something if you conduct the research yourself.
• You may find it difficult to be impartial, particularly if people criticise your business.

For small-scale field research, your best option may be a freelance researcher. A market research agency won't usually take on projects with a budget below £3,000.

As well as recommendations from business contacts, you can search for a market research agency on the Research Buyers Guide website - registration required.

Before taking on a market research agency or a freelance researcher, investigate their reputation. Ask for a list of previous clients and contact them for feedback. Check the agency or researcher has relevant experience and consider how comfortable you'd feel working with them. And get a clear idea of fees for the services you want.

Check the agency's researchers or freelance researchers fit the image of your business. If they'll be carrying out street interviews, confirm they'll have the required local authority licence and identity card.

Make sure you provide a thorough and clear brief. This needs to cover areas such as the business objectives behind the project, the information the research should uncover and how you intend to use the results.

---

Here's how I made the most of market research

Richard Rivlin
Bladonmore

Richard's top tips:

• "Invest time - it's your most important research commodity."
• "Split research into three areas - market trends, competitors and potential customers."
• "Focus customer research by writing a wish list of your three dream clients, then thinking specifically about their needs."

---

Bladonmore is a financial training and media business, based in London. A customised service and a gritty, real-world approach to training have enabled the company to grow rapidly during its first two years. Director Richard Rivlin explains how effective use of market research has contributed to Bladonmore's development.

What I did

Spend time not money

"Like most companies starting out, we needed to research our target market but didn't have limitless cash to pay someone to do it for us. Doing it yourself is cheap in money terms - but you have to invest your time if you expect to get anything useful out of it.

"Over a period of three months, I went on a virtual fact-finding mission using the Internet. If you persevere, you can find an incredible amount of quality information for free, including market reports and expert analysis. Business consultants' websites, industry bodies and sector-leading companies are a good place to start."

Apply the research

"Throughout my research, I was careful to avoid analysis paralysis. There's no point hiding behind piles of market data and thinking you've done something constructive. You have to use the information to develop your business. Having clear objectives helps. I wanted to know the size of the market, to learn from competitors' successes and mistakes and to understand what potential clients want.

"I focused on data from reputable sources and used it to help formulate a business plan. At a later stage, I also used research facts in Bladonmore's marketing material - but always bearing in mind that I didn't want to give away too much to competitors."

Keep up to date

"Research isn't just about reading the occasional market report. It should be an on-going process that keeps you up to date with your market, your rivals and your clients. I find newspapers one of the best research sources. There's something relevant to our business in the press almost every day. For example an article about increased activity in venture capital (VC) markets is useful, because companies looking for VC finance often need financial presentation training."

What I'd do differently

Head for the top

"I didn't wake up to the wonders of free expert research soon enough. If I had my time again, I'd head straight for the websites of top consultants like Ernst & Young and McKinsey. You may not be able to afford their research fees, but they publish enough in the public domain to meet the needs of many smaller businesses."

Be disciplined

"I now make it part of my daily routine to clip useful research out of newspapers. I even carry around a small pair of scissors for the purpose. It's yielded several business development ideas and I wish I'd got into the habit sooner."

---

Research - Prepare a Business Plan

Prepare a business plan

It is essential to have a realistic, working business plan when you're starting up a business.

A business plan is a written document that describes a business, its objectives, its strategies, the market it is in and its financial forecasts. It has many functions, from securing external funding to measuring success within your business.

This guide will show you how to prepare a high-quality plan using a number of easy-to-follow steps.

---

The audience for your business plan

Many people think of a business plan as a document used to secure external funding. This is important because potential investors, including banks, may invest in your idea, work with you or lend you money as a result of the strength of your plan.

There are many other benefits to creating and managing a realistic business plan - even if you just use it in-house. It can:

• help you spot potential pitfalls before they happen
• structure the financial side of your business efficiently
• focus your development efforts
• work as a measure of your success

The following people or institutions may request to see your business plan at some stage:

• banks
• external investors - whether this is a friend, a venture capitalist firm or a business angel
• grant providers
• anyone interested in buying your business
• potential partners

You should also bear in mind that a business plan is a living document that will need updating and changing as your business grows. Regardless of whether you intend to use your plan internally, or as a document for external people, it should still take an objective and honest look at your business. Failing to do this could mean that you and others have unrealistic expectations of what can be achieved and when.

---

What the plan should include

Your business plan is a statement of intent. It should provide details of how you are going to develop your business, when you are going to do it, who's going to play a part and how you will manage the money.

Clarity on these issues is particularly important if you're looking for finance or investment. The process of building your plan will also focus your mind on how your new business will need to operate to give it the best chance of success.

Your plan should include:

• An executive summary - this is an overview of the business you want to start. It's vital. Many lenders and investors make judgments about your business based on this section of the plan alone. See the page in this guide on the executive summary.
• A short description of the business opportunity - who you are, what you plan to sell or offer, why and to whom. See the page in this guide on your business, its products and services.
• Your marketing and sales strategy - why you think people will buy what you want to sell and how you plan to sell to them. See the pages in this guide on your markets and competitors and marketing and sales.
• Your management team and personnel - your credentials and the people you plan to recruit to work with you. See the page in this guide on your team's skills.
• Your operations - your premises, production facilities, your management information systems and IT. See the page in this guide on your operations.
• Financial forecasts - this section translates everything you have said in the previous sections into numbers. See the page in this guide on financial forecasts.

You can read sample business plans at the Bplans website or see a library of business plan templates on the Microsoft Office website.

---

The executive summary

The executive summary is often the most important part of your business plan. Positioned at the front of the document, it is the first part to be read. However, as a summary it makes sense to write it last.

It may be the only part that will be read. Faced with a large pile of funding requests, venture capitalists and banks have been known to separate business plans into "worth considering" and "discard" piles based on this section alone.

What is it?

The executive summary is a synopsis of the key points of your entire plan. It should include highlights from each section of the rest of the document - from the key features of the business opportunity through to the elements of the financial forecasts.

Its purpose is to explain the basics of your business in a way that both informs and interests the reader. If, after reading the executive summary, an investor or manager understands what the business is about and is keen to know more, it has done its job.

It should be concise - no longer than two pages at most - and interesting. It's advisable to write this section of your plan after you've completed the rest.

What is it not?

• A brief description of the business and its products. It's a synopsis of the entire plan.
• An extended table of contents. This makes for very dull reading. You should ensure it shows the highlights of the plan, rather than restating the details the plan contains.
• Hype. While the executive summary should excite the reader enough to read the entire plan, an experienced investor or businessperson will recognise hype and this will undermine the plan's credibility.

You can read sample business plans at the Bplans website.

---

Your business, its products and services

If you want other people to invest in your business or if you're writing your plan to focus your existing business activities, you must be able to clearly convey what your business does.

This part of the plan sets out your vision for your new business and includes who you are, what you do, what you have to offer and the market you want to address.

Start with an overview of your business:

• when you started or intend to start trading and the progress you have made to date
• the type of business and the sector it is in
• any relevant history - for example, if you acquired the business, who owned it originally and what they achieved with it
• the current legal structure
• your vision for the future

Then describe your products or services as simply as possible, defining:

• what makes it different
• what benefits it offers
• why customers would buy it
• how you plan to develop your products or services
• whether you hold any patents, trademarks or design rights
• the key features of your industry or sector

Remember that the person reading the plan may not understand your business and its products, services or processes as well as you do, so try to avoid jargon. It's a good idea to get someone who isn't involved in the business - a friend or family member perhaps - to read this section of your plan and make sure they can understand it.

---

Your markets and competitors

In this section you should define your market, your position in it and outline who your competitors are. In order to do this you should refer to any market research you have carried out. You need to demonstrate that you're fully aware of the marketplace you're planning to operate in and that you understand any important trends and drivers.

You should also be able to show that your business will be able to attract customers in a growing market despite the competition.

Key areas to cover include:

• your market - its size, historical data about its development and key current issues
• your target customer base - who they are and how you know they will be interested in your products or services
• your competitors - who they are, how they work and the share of the market they hold
• the future - anticipated changes in the market and how you expect your business and your competitors to react to them

For further information, see our guides on market research and market reports and how to understand your competitors.

You also need to know how your competitors' advantages and disadvantages compare to your own. Describe any competitive analysis you have carried out and include some what-if scenarios that show how your business would deal with customers' changing needs or any other market changes.

Download a guide on getting to grips with your competitors from the Chartered Institute of Marketing website (PDF).

---

Marketing and sales

This section should describe the specific activities you intend to use to promote and sell your products and services. It's often the weak link in business plans so it's worth spending time on it to make sure it's both realistic and achievable.

A strong sales and marketing section means you have a clear idea of how you will get your products and services to market.

Your plan will need to provide answers to these questions:

• How do you plan to position your product or service in the market place? For further information, see our guide on how to create your marketing strategy.
• Who are your customers? Include details of customers who have shown an interest in your product or service and explain how you plan to go about attracting new customers. See our guide: know your customers' needs.
• What is your pricing policy? How much will you charge for different customer segments, quantities, etc? See our guide on how to price your product or service.
• How will you promote your product or service? Identify your sales methods, eg direct marketing, advertising, PR, email, e-sales. See our guide on sales & marketing: the basics.
• How will you reach your customers? What channels will you use? Which partners will be needed in your distribution channels? See our guide on how to reach your customers effectively.
• How will you do your selling? Do you have a sales plan? For example, will you sell by phone, via a website, face-to-face or through retail outlets? See our guide on sales methods.

---

Your team's skills

Your business plan needs to set out the structure and key skills of both your management team and your staff. It should identify the strengths in your team and your plans to deal with any obvious weaknesses.

The management team

If you're looking for external funding, your management team can be a decisive factor. Explain who is involved, their role and how it fits into the organisation. Include a paragraph on each individual, outlining their background, relevant experience and qualifications. Include any advisors you might have such as accountants or lawyers.

If you're looking to satisfy your bank manager or other investors, you need to demonstrate that your management team has the right balance of skills, drive and experience to enable your business to succeed. Key skills include sales, marketing and financial management as well as production, operational and market experience.

Your investors will also want to be convinced that you and your team are fully committed. Therefore it's a good idea to set out how much time and money each person will contribute to the business and the salaries and benefits you plan to draw. You can find more practical tips in our guide on how to use your business plan to get funding.

Your people

Give details of your workforce in terms of total numbers and by department. Spell out what work you plan to do internally and if you plan to outsource any work. Other useful figures might be sales or profit per employee, average salaries, employee retention rates and productivity.

Your plan should also outline any recruitment or training plans, including timescales and costs.

It's vital to be realistic about the commitment and motivation of your people and spell out any plans to improve or maintain staff morale.

---

Your operations

Your business plan also needs to outline your operational capabilities and any planned improvements. There are certain areas you should focus on.

Location

• Do you have any business property?
• What are your long-term commitments to the property?
• Do you own or rent it?
• What are the advantages and disadvantages of your current location?

Production facilities

• Do you need your own production facilities or would it be cheaper to outsource any manufacturing processes?
• If you do have your own facilities, how modern are they?
• What is the capacity compared with existing and forecasted demand?
• Will any investment be needed?

Management-information systems

• Have you got established procedures for stock control, management accounts and quality control?
• Can they cope with any proposed expansion?

For more information, see our guides on stock control and inventory and financial and management accounts: the basics.

Information technology (IT)

• IT is a key factor in most businesses, so include your strengths and weaknesses in this area.
• Outline the reliability and the planned development of your systems.

For more information, see our guide providing an overview of IT and e-commerce.

---

Financial forecasts

As part of your plan you will need to provide a set of financial projections which translate what you've said about your business into numbers.

You will need to look carefully at:

• how much capital you need if you are seeking external funding
• the security you can offer lenders
• how you plan to repay any borrowings
• sources of revenue and income

You may also want to include your personal finances as part of the plan at this stage.

Financial planning

Your forecasts should run for the next three (or even five) years and their level of sophistication should reflect the sophistication of your business. However, the first 12 months' forecasts should have the most detail associated with them.

Include the assumptions behind your projection with your figures, both in terms of costs and revenues so investors can clearly see the thinking behind the numbers.

What your forecasts should include

Cashflow statements - your cash balance and monthly cashflow patterns for at least the first 12 to 18 months. The aim is to show that your business will have enough working capital to survive so make sure you have considered the key factors such as the timing of sales and salaries. See our guide on cashflow management: the basics.

Profit and loss forecast - a statement of the trading position of the business: the level of profit you expect to make, given your projected sales and the costs of providing goods and services and your overheads.

Sales forecast - the amount of money you expect to raise from sales. See our guide on how to forecast and plan your sales.

You can download our sample profit and loss forecast template (XLS).

---

Presenting your business plan

To make sure your business plan has maximum impact, there are a number of points to observe.

Keep the plan short - it's more likely to be read if it's a manageable length. Think about the presentation and keep it professional - even if you only intend to use the plan in-house. Remember, a well presented plan will reinforce the positive impression you want to create of your business.

Tips for presenting your plan

• Include a cover or binding and a contents page with page and section numbering.
• Start with the executive summary.
• Ensure it's legible - make sure the type is ten point or above.
• You may want to email it, so ensure you use email-friendly formatting.
• Even if it's for internal use only, write the plan as if it's intended for an external audience.
• Edit the plan carefully - get at least two people to read it and check that it makes sense.
• Show the plan to expert advisers - such as your accountant - and ask for feedback. Redraft sections they say are difficult to understand.
• Avoid jargon and put detailed information - such as market research data or balance sheets - in an appendix at the back.

Make sure your plan is realistic. Once you've prepared your plan, use it. If you update it regularly, it will help you keep track of your business' development. See our guides on budgeting and business planning and how to prepare a business plan for growth.

Further help and advice

Your accountant, if you have one, or your bank can offer support.

Your local Business Link has specialist advisers who can help you with business planning. You can find your local Business Link through our Contacts directory.

Enterprise Agencies may offer free business counselling and help you prepare your business plan.

---

Here's how having an up-to-date business plan helped my business

Darren Jones
AKC Home Support Services

Darren's top tips:

• "Make sure your business plan reflects your personal vision - don't just put things in because you think it’s what someone else wants to read."
• "Be objective. It is important to weigh up the pros and cons."
• "Get assistance whenever you can."

---

Darren Jones launched his care business, AKC Home Support Services, in 1991 with his wife Sharron. Although writing their business plan was one of the first things the couple did, Darren admits he originally saw it as a bit of a chore. Now, he takes a different view, believing it has helped the business stay on track and true to its goals.

What I did

Write the plan

"When we started the firm I knew we needed a business plan but saw it more as a document for everyone else than something to help us. If I started another business tomorrow I would write one much more willingly as it brings a number of benefits - from helping you secure finance to keeping you focused on your goals.

"We got help from our local enterprise centre, looked at examples from other businesses and a template from the bank. We mixed and matched bits from these sources because not everything applied to us. For example, because we were going into a new market we couldn’t write about our competitors but needed a lot of information about the market for care services."

Consult the plan

"We used our business plan to set out the financial and strategic goals we wanted to achieve in the short and long-term. We review it annually now unless there’s a significant shift in our market and then we use it to immediately re-evaluate our goals.

"Our business plan has also helped us to avoid expanding too quickly. Early on, we were offered work in another county. This seemed great but when we looked at our business plan – and particularly our cashflow forecasts - we realised it was important to establish a firm base in one county before taking on work in another otherwise we would overstretch ourselves."

Use the plan

"We purchased a residential unit four years ago and our business plan definitely helped us demonstrate why the bank should lend us the money. Without it being put down on paper I don’t think it would have sounded like a very viable suggestion.

"The home added a different dimension to the business in which we had no trading record so the bank lent us the money according to our past performance. We could also show that we would offset some of the cost by using part of the new building as office space.

"Our plan also helped us to get support from Shell LiveWire - the organisation that assists 16-30 year olds to start and develop businesses - as you must have a business plan to enter its competitions. We were awarded prizes twice - not only bringing in extra money but publicity too."

What I'd do differently

Work on the plan’s presentation

"I would have tried to get more assistance and perhaps made the document look a bit more professional. It's your way of gaining support for your business and is the one thing that your bank manager will remember apart from how you were dressed."

Get as much help and advice as possible

"Show the plan to an independent third party - such as friends or family who have run their own businesses - who will be able to point out if anything is missing. It's much better to make mistakes on a practice run than when it really matters."

Download this case study and 20 like it in our free book, "Here's how I started up my business" (PDF)

---

Business Link Helpline

0845 600 9 006

---