Does this sound ok?

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Hey guys, need your opinion on this one!

I'm in the middle of writing a business plan as Rob and I are planning to buy a garage/petrol station. I've been writing and re-writing this damned thing for a week and can no longer tell if it makes sense so could you read over it and let me know what you think? Don't worry, it's only a small part, you don't have to read the whole thing!

Cheers my loves x

"Current Financial Summary
The business has showed a steady profit since April 2006 with only a small dip in profits in 2007. This was because a member of staff left the business and was not replaced by the current owners. While the income of the business decreased because of this drop in productivity, the outgoings in terms of wages followed suit.
Despite the member of staff still not being replaced, the overall profit from the business has again picked up to show an increased income from 2008-2009. Although this increase in profit was not as great as the increase between 2006 and 2007, the current financial market has not been as stable as in previous years and coupled with the loss in productivity because of staff, we believe this to be an acceptable figure. A table showing the gross profit from April 2006 to April 2007 follows."

 

I presume the table includes percentages and ratios? Raw figures are useful but unless you can quantify the productivity loss and how much the productivity and profits picked up the words alone will not convey enough information.

Reports are more often than not looking at the numbers and the words are secondary to simply explain anomalous data. Banks will already know the current financial situation (if they don't it explains a lot ) there are also a couple of extraneous statements such as "by the current owners" in talking about replacing a staff member.

A better angle to take is instead of the approach of "we have lost productivity because someone left" look at it more from "we could increase productivity by employing another staff member, while current cash flow allow this the security of extra financial backing will allow for more comfortable expansion."

A display of confidence within reason is a lot more effective than hesitating on losses. Which from a critical position, it looks like you're hurting from a lost employee, and it sounds like the loss may be crippling production, using the terms like 'while' and 'despite' makes it sound like a factor that's *really* holding you back. If it's a situation where it really HAS hurt the company - refer to it as a lapse, something temporary and easily repaired. Highlight the self financed nature and the low gearing which induces that financial support in the form of a loan or investment allows for easy, effective repairation and expansion.

Be Frank, Formal, Feasible and Forthright. You can't really go wrong beyond that.

 

Yeah, you're right. It's getting tough to write it though! We've had an accountant look at the books and say that we need to show the bank that we're aware of the loss and the reasons behind it, that's why this bit focuses so much on it.
Another factor is that at the begining I've said that one of our aims is to train up another MOT inspector so the next part was to focus on that and the increase in productivity/efficiency/profit that'll follow.

My head hurts

 

May actually be better to post whole thing so we can see the whole picture as it where.

I certainly don't mind looking at it on the grounds of
1) I'm not a finance guy!
and
2) I'm a graduate so would look at it like that (may be to intelligent for the banks!)

 

Thanks hun, I've posted it to my blog

 

First off, don't start it with "Cheers my loves x"

Some suggestions (my stuff is in italics)

Current Financial Summary
The business has showed a steady profit since April 2006 (amount) with only a small dip in profits in 2007. This was because a member of staff (what was his/her role, and how important was he/she?) left the business and was not replaced by the current owners. While the income of the business decreased because of this drop in productivity, the outgoings in terms of wages followed suit (what is the net impact?).
Despite the member of staff still not being replaced, the overall profit from the business has again picked up to show an increased income from 2008-2009 (how much?). Although this increase in profit was not as great as the increase between 2006 and 2007, the current financial market has not been as stable as in previous years and coupled with the loss in productivity because of staff, we believe this to be an acceptable figure. A table showing the gross profit from April 2006 to April 2007 follows


It's not much, but without more info on your business or its operating results over the last few years, that's about all I can do (not that I'm asking you to tell me more - you already have an accountant advising you, and he is correct that you need to explain the decrease in profit).

 

My knowledge of accounting and auditing is limited to Finnish accounting practices but I agree with what Splunge pointed out, it's important to offer the banks concrete numbers and values. I'd suggest you to look at the past financial reports with your accountant and work out what has been done well and what has been done wrongly, and then explain how they have affected the profitability, liquidity and stability ratios of the enterprise. Focus on the numbers that are bad and explain why that is and also provide concrete measures how you seek to remedy the situation, also highlight the better values to get the creditors convinced of the company's future potential.

The more information you can provide to the creditors the better since they'll think of you as financially knowledgeable and fiscally responsible.

 

Oh God, I suck at doing this! I have no idea what I'm doing!!!