The business plan

The business plan should comprise a full version and an edited summary. The edited summary – which must be as brief as possible, no more than

two sides of A4 – should comprise:

• Ambition, brand and USP (unique selling point) • Objectives

• Strategy (to achieve the objectives)

• Key actions (with costs and marketing requirements) • Key client targets and sectors

• The team (who will deliver the business plan).

The full version should be as succinct as possible but should in addition include:

• Practice particulars:

o name, address, etc.

o company and VAT numbers o main activities/sectors o existing clients/client types o current project locations and size o suppliers and sub-consultants

• Financial matters:

o income to date and forecast income (say for the next 12 months) o budget detailing all overheads (e.g. salaries, premises, rates, suppliers) o calculations of income per architectural staff member, plus income per

member of all staff and percentage of non-fee earning time

o resources, including IT, etc.

• SWOT analysis (see Chapter 5).

The business plan is a living document, not something to be written and never referred to. It will change to adapt to the changing business environment and aspirations of the management of the business. It should therefore be accessible and straightforward, not overly academic or wordy. It should, however (as noted above), include a section that expresses the ambition and brand of the practice, which can be written in whatever way best expresses those facets.

4.5

Business advisers

The support of good advisers is essential for successful business management – and an accountant is the principal one to get on board initially. It is wise to look for a firm or individual who has other architect clients and will know the kind of special needs that architectural work generates. A fellow practitioner may be able to recommend someone suitable, but otherwise the practice must either make its own enquiries or approach the relevant professional institute. It is important to consider a firm’s reputation and prosperity, whether the range of services offered will meet the practice’s current and future needs, and whether its offices are conveniently placed.

It is also wise to consider whether the attitude and philosophy of the firm is in tune with that of the practice – whether, that is, the professional chemistry is right.

For some practices it might be worthwhile to consider bringing in one or more non-executive directors or board-level advisers. Non-executive directors focus on board matters rather than executive matters and can provide an independent view of the company, distinct from its day-to-day operations. Non-executive directors are appointed to the board to bring independence, impartiality, experience, specialist knowledge and personal qualities. For example, a company wanting to expand its international presence may look for someone with particular experience of foreign markets and working practices. As an ‘outsider’, the non-executive director may have a more objective view of external factors affecting the company in its business environment than the executives. The normal role of the non- executive director in strategy formation is therefore to provide a creative and informed contribution and to act as a constructive critic in looking at the objectives and plans devised by the management team.

The accountant will be able to help you determine the most appropriate form for the business (see Section 4.3). They will also be able to keep you appraised of changes in tax legislation, etc. When you are starting out it is advisable to undertake as much of the administration yourself as you can. This will not only reduce the cost (the more you can do, the less the accountant will need to charge) but will also give you a firm understanding of business accounting processes.

Other advice on setting up a practice will come from the bank (although in the current economic climate you are unlikely to be given a loan), and from insurance brokers to arrange professional indemnity and, if appropriate, premises insurance.

4.5.1 Accountants

An accountant is a professional keeper and inspector of accounts. Accountancy firms vary in size from the small office that offers mainly auditing and tax advice, to the large prestigious firm with an international network of offices offering a wide range of financial and management services.

The standard services that an architectural practice might engage an accountant to provide are:

• preparation of the firm’s annual audit; • advice on tax matters;

• advice on book-keeping procedures;

• advice about the practice’s financial state of affairs.

Many accountancy firms also provide management consultancy services, and some offer services connected with corporate recovery and insolvency, and corporate finance and investigations.

Under the Companies Act every company above a certain size is required to submit audited accounts to Companies House, where they can be inspected by interested parties. Accounts also have to be submitted to the Inland Revenue. The auditors’ duty is to review the accounts and the systems from which they are derived and give a professional opinion as to whether they give ‘a true and fair view’ of the company’s results.

The question of fees should be clarified at the outset of the consultancy, and it is important, particularly when any extensive piece of work is commissioned, to set a budget for it and to stipulate that this is not to be exceeded without express permission. It’s a good idea to build up a good working relationship with the accountant; they can not only save the practice money in the short term, but also may be able to warn it of troubles ahead.

The Institute of Chartered Accountants in England and Wales (ICAEW) provides an online search facility for chartered accountants. Go to www. icaewfirms.co.uk.

year-end tax return for small practices

At the financial year end, small practice principals will need to collate the following information for their accountant to enable them to prepare a tax return:

Income from employment

• Income and expenses from the business.

• For those who, having started their practice that year, were in full- or part-time employment earlier in the tax year:

o Form P60 (gross pay, tax deducted) and/or P45 where applicable. o Form P11D (return of benefits) if any.

o PAYE Coding Notice (for the current and next years) if available.

uK property rental income – if any

• Details of rental income. • Details of property expenses.