Property
Issue No. 28 - April/May 2006
Plan to succeed in capital raising, as well
Business operators are increasingly likely to invest in property to start or expand a business, research from BankSA shows.
More than 40% are planning or considering commercial property investment over the next few years, reflecting continued confidence in the economy and their own business performance.
BankSA General Manager, Chris Ward says the trend is a welcome indication that business operators are optimistic about the state’s future. However, it also highlights the need for careful planning to ensure business expansion was not hindered by funding worries.
Gaining finance to start a new business, buy a franchise or expand a business should not be an obstacle if operators plan carefully.
“Potential business owners need to develop a business plan, cash flow forecast, statement of assets and details of available security,” Chris says.
“These will guide the first year of business and, importantly, show a financial institution the vital facts and figures it needs to approve funding.
“While this preparation is the key to gaining finance, it is also fundamental to building a strong business that can be sustained through careful planning.”
Potential business owners need to plan for any hidden expenses, decide how much they could put into the business and understand record-keeping and tax requirements.
Showing a lender they have undertaken this planning is also likely to help when their application is assessed. Useful tips for researching the business fundamentals include:
Business Plan
This is the first step to achieving the dream of business ownership. It involves mapping out a vision for the business and drawing up a company structure. You should conduct an analysis of the business, focusing on strengths, weaknesses and opportunities.
Potential risks and your own management ability are also important to understand and address.
All fixed and variable costs need to be det...
