illustration: business plan
A business plan is a useful, perhaps even decisive, tool for you and everyone who is involved in your project. You can think of it as a roadmap to success!
You should prepare a business plan both because it is a good management tool and because you will need to present it to your bank, investors and others.
  1. Set up a business plan as a useful tool for yourself
  2. Keep in mind that the plan should be able to convince others that you have a viable project
  3. Get someone you trust to go through your business plan and give you constructive feedback
  4. Make sure your business plan has a presentable format and packaging

1. A business plan must contain

  • Corporate vision
    Write down the object of your company, in other words - what you aspire to achieve.
  • Business concept
    Formulate the idea in a clear and simple manner. Write down which products and services you plan to offer. What market needs do you intend to meet?
  • Market
    The biggest challenge is to define the target audience.  Who is your marketing message aimed at? Who will buy the products? It can be a good idea to do a little market survey to check your assumptions.
  • Competitors
    Identify your competitors. Google is an inexhaustible, free source of information that you can access 24/7. Check industry registers to see who is involved in the same business as you.
  • Finances
    How much money do you need to realise your idea? Set up a budget, and keep some funds aside as a buffer. Do you really need a car, expensive equipment and parquet floors in the office? Using an accountant can be expensive if you not establish a good, simple system for keeping track of all your papers.
  • Financing
    Specify how much of the financing you plan to cover with your own money and how much you need to borrow. Experience has shown that people who will be involved in your project will be very interested in the financial details.
  • Progress plan
    Set up a detailed progress plan to keep track of where you are going. Specify what should happen when. That way you will always know whether or not you are on track.
Relevant links:
» How to set up a business plan (guide to starting your own business (

»  Operating budget template (xls)

2. What is liquidity?

Good liquidity means that you have significant buying power. Liquidity also gives an indication of the company's capacity to service debt when it falls due for payment.

A common problem in the start-up phase is that the expenses come before the income. Way before. And the fact that you are expecting money does not mean that creditors will sit by patiently waiting to be paid.

Unfortunately, it is also fully possible to go bankrupt even if your business operations are profitable. Tight liquidity can lead to payment problems.

The best way to manage your liquidity is to set up a good budget. A separate liquidity budget, divided into months or weeks, shows whether there are sufficient funds in the company's account at all times and which months are likely to be a tight squeeze for the company.

Keep a record of when funds are to be paid out and when you expect to receive money. The goal is to enable you to determine how much money you need to have at your disposal to get through each month.

Relevant link:
» Liquidity budget template (xls)

3. Create a budget

A good budget is an important management tool. By continuously checking your results against the budget, you will see how close you are to attaining your financial goals. This, in turn, can provide a basis for implementing measures if your revenues are behind budget or your costs are over budget.
  1. Have you prepared a basis for calculating income?
  2. Have you formed an opinion about when you can realistically expect to start receiving income?
  3. Have you gathered all the information you need to calculate expenses?
  4. Have you determined which investments you need to make?
Relevant links:
» Operating budget template (xls)

4. Terms you should know

Operating expenses
Operating expenses are basically all of the expenses associated with day-to-day business operations. Examples include labour costs, travelling expenses, purchases of goods, services and office equipment as well as other office expenses, rent, cafeteria costs etc.

Labour costs
Labour costs are sometimes called personnel expenses and include all of the employer's expenses that are related to employees or to the employer him/self, such as holiday pay, sick pay, employer's national insurance contributions, service pension, business entertainment expenses, social benefits and similar social costs. The costs associated with employees are generally about 30% higher than their actual salaries.

Capital costs
Capital costs (cost of capital) are also called financial costs. When a company tries to raise money for financing purposes, it will have to pay capital costs. Interest on a loan is an example of capital costs.

Accrual accounting
Accrual accounting is a method of tracking income and expenses in accounting records by posting (recognising) them in the period when the expense was incurred/income earned, even if the actual payment takes place in a different period.

As an example let us say that you sell a photocopier on credit in December 2014 and receive payment in 2015. The proceeds from the sale of the photocopier are recognised in the accounts for 2014 even though payment is not received until 2015.

Accrual accounting principles are generally followed in budgets. In practise this means that you set up anticipated income and expenses month by month and not just for the year as a whole.

In a newly started company it can be difficult to determine when income will be actually be received and expenses incurred. At the same time, this can be decisive for how much money you need and how much profit you achieve. You should thus be both thorough and realistic when deciding when items should be recognised in your budget.

Most revenues and expenses are posted in the month when they are received/incurred. This does not apply, however, to equipment over a certain size that has a longer expected lifetime. Such investments often call for what is known as depreciation. In a budget context, this means that the cost of the equipment is distributed over a certain number of years. You cannot charge the entire amount to depreciation at the same time, even though it is sometimes tempting. There are extensive rules for how depreciation is to be carried out and it can be a good idea to consult an accountant when you budget this.

There are, however, some rules of thumb that you can use as a point of departure:
Assets with a purchase price of NOK 15 000 or more and a useful life of at least three years are generally depreciated. The most common approach is to depreciate (write down) the same amount each year. So, if you buy a printer for NOK 25 000 and expect it to last for 5 years, you simply charge NOK 5 000 to depreciation each year. It is also common practise to distribute the write-downs over a number of months rather than posting the entire amount in a single month. When it comes to paying for the asset, you have to pay the entire amount when you buy it.
Talk to our specialist team
Weekdays 08:00 - 16:00 CET
+47 915 04800