The Secret To Writing A Foolproof Business Plan

A common question we get from entrepreneurs is if a business plan is necessary.

And our answer all depends on what you believe is necessary. Business owners often view business plans as an extra hassle, especially when it’s only needed as a required document by a third party. But what happens when you need to take stock of all your ideas and projections?

A great business plan can not only represent a business’ scope on paper, but it can also act as a roadmap to success.

So, even if is a business plan isn’t formally required – it has its uses. How do you make it foolproof?

First things first. Not all business plans are created equal.

There is no specific rule which says that a plan needs to have so many pages, chapters or statistics. In order to understand the level of detail, what data and which arguments to include, the writer must first understand their audience. A business plan to be used by the entrepreneur will probably not require the same information needed for one that’s presented to third parties, such as banks or investors.

So, with an audience in mind, what kind of information should you include?

The Basics

When it comes to writing business plans there are standard areas that are addressed, such as:

  • Mission statement and vision Statement
  • Company description
  • Unique traits of your products and services
  • Finances
  • Market strategies
  • Operations and management plan

Even if you don’t have any grand ideas for these elements, writing about it in your business plan will force you to consider your options and help you choose a direction.

Now that you have a fair idea of how to split up your plan, it’s time to think about it in context.

A plan for your own use

If you’re creating a business plan for yourself or your inner circle, then detail is not as important as objectivity. The goal of the plan is for you to put down your thoughts on paper so that you can visualise them better. In this way, you can identify any possible gaps in your reasoning or in your business model. The plan itself can be very short, and you can find templates for one-pagers across the web.

Although detail is not necessary for such a plan, critical thinking is. You need to ensure that you’ve got all your bases covered, from your core products or services to the organisation of your business. The thought process which is involved is the same as that used to make a more detailed plan.

A plan for third parties

When you need a business plan that will be read by people outside of your business, you need to include background information and more detailed explanations than you would in a one-pager.

Again, deciding what you would include in the plan depends very much on its audience. A bank might require more detailed financials, whereas an investor would be looking for key people that will ensure the success of the business. Even applying for local and EU-funded grants require particular information to be included.

Once you provide your plan to the third party, it will probably be read by a number of people –  your business plan is officially under scrutiny. These people will be checking the plan for several criteria, not least, consistency. There is nothing worse when a plan that says one thing on one page and then says the opposite on another.

Another important element that is often sought is data to back up your proposals and arguments. This is where market research really pays off. Put yourself in the third party’s shoes – their investment in you involves a certain level of risk. This business plan is your chance to prove to them that not only is your project worth the risk – it’s got potential to bring in a return too.

When do I know it’s ready?

A business plan is not a static document – as with your business, your plan will evolve over time.

The point of the plan is not so much to instruct as it is to guide. New business opportunities and changing environments will constantly challenge your business, and having a plan will help you make the right decisions at the right time.

Researching and writing a business plan is a time-consuming effort, especially if you are very busy. NM Group can create your plan and get you funding to cover the majority of the costs. We can also use your business plan to apply for a range of funding opportunities. It’s a win-win!

Get in touch today on [email protected].

Launching A Compliant Start-up In Malta

Coming up with the perfect idea for a start-up in Malta feels a lot like reaching the top of a mountain, but don’t pop the champagne bottles just yet – that’s just the very first step in your entrepreneurial journey.

We have already talked about the importance of due diligence and taking care of the legal side of things in previous posts, but today we’re going to dig a little deeper into the labyrinth-like world of compliance.

First things first: what is compliance? You’ll definitely hear this word from time to time when you’re setting up your business. In its broadest sense, ‘compliance’ refers to your ability to operate according to a set of rules and/or laws; it’s basically doing what you need to do to make sure everything is above board.

In the world of finance, compliance can be said to work on two levels:

  1. Compliance with any external rules or regulations applicable to a business or organisation as a whole
  2. Compliance with internal structures created and imposed to align with any external rules or laws

Why is it so important to do things the right way in terms of compliance?

Even though legal compliance is central to starting a real business, you’d be surprised to know how many new companies shoot themselves in the foot by ignoring or forgetting about this part of the process. The benefits of being compliant far outweigh the risks, which include anything from a hefty fine to jail time. Long story short: don’t skip out on compliance, ladies and gentlemen. It’s a pricey mistake to make and when you’re just starting out, every euro counts.  

Getting Started with Compliance

At NM Group, our lovely team of experts know exactly what to do when it comes to launching a fresh new business and helping it get the best possible start right here in Malta. Our advisors are second to none when it comes to taking care of the technical side of starting a business. It’s our job to make sure your success is built on solid ground so that you can enjoy long-term success–that’s why we cover everything from compliance to payroll, legal advice, funding, and beyond. When it comes to compliance procedures specifically, the most important points to cover include:

  • VAT registration: any person or entity who carries out commercial activity must be registered with the VAT department – even if you are exempt.
  • VAT reporting: if you are charging VAT then you also need to keep a record of this. VAT reporting must be carried out monthly.
  • MFSA: if you would like to register your venture as a company, then this must be done through the MFSA.
  • Tax payments and NI: being your own boss means having to pay your own taxes and national insurance, along with that of your employees.
  • Audits: By law, every company registered in Malta must engage an external entity to carry out a financial audit.
  • Jobsplus: You as well as your employees must be registered with Jobsplus

These are just a few important processes that our team can take care of to make your life easier and put your start-up en route to success. If you’re looking to learn more about launching a start-up in Malta or simply want some advice on how to make sure you’re following the letter of the law, get in touch with one of our consultants today!

How to Make Your Start-up Work in Malta

You have a great idea for a start-up in Malta – but will it work?

“The best way to predict the future is to create it.” – Peter Drucker

When it comes to starting your own business, stumbling across that perfect moment of inspiration (the moment where you’ve uncovered that golden idea that’ll set you apart from everyone else) – that’s just the beginning of what could turn into a really successful start-up. It is already a well-known fact that the perfect mix of creativity, vision, originality, determination and hard work are essential if you want to get your start-up off the ground. But how much do you know about the little details behind it all?

First Steps: Turning Ideas into Action

So what’s a ‘good idea’ and how do you make it work? We’ve all heard the expression ‘there’s no such thing as a bad idea’, and while that might be true, not all ideas work when it comes to building a business from scratch. There are various factors that make an idea ‘good’ – or rather, viable – but the best way to know if yours could work would be to ask yourself some serious questions, and answer them as honestly as possible. Once you’ve done that, start turning your dream into reality and get in touch with us! Here are a few questions to get you started:

  1. What are you offering your customers or clients?
  2. Does your business or product solve a problem? If yes, how?
  3. Does your idea do something to change the status quo?
  4. Are there other businesses offering a similar service or product?
  5. What makes you different?
  6. Can you list 5 key benefits of your product or service?
  7. Why should customers choose you?
  8. Can you ‘sell’ your idea in 30 seconds or less? Give it a shot!
  9. Have you analysed your potential strengths, weaknesses, opportunities, and threats? (this is known as SWOT analysis)
  10. Is your idea financially viable?
  11. Is it financially worthwhile?
  12. How much capital do you need to get your business off the ground?
  13. What will it take to break even or make a profit in the first year?
  14. Do you require bank financing/facilities?
  15. Have you considered the cashflow aspect of the project?
  16. Are there any potential investors around? If so, how will you pitch your idea to them? What makes your idea profitable in their eyes?
  17. Have you identified potential distributors or partners who you can trust?
  18. Can you get your social media presence up and running, or do you need help?

Next: Making It Official

Once you’ve got your ideas on paper and a clear plan for your start-up, the next big step is making it all official. Like with most ‘official’ things in this world, company incorporation or registration involves its fair share of paperwork, bureaucracy and legal jargon that can be difficult to get through alone and efficiently. As a fully-licensed corporate services provider, we’ll be there to guide you through the process and advise you on everything required to get your great idea registered through all the right channels, making the process as stress free as possible for you and ensuring that you get the correct corporate structure the first time round!

Lift Off: Taking Care of Business

There are quite a few important details to take care of before you unveil your brand-new company to the world. If you’re starting a new business in Malta, we can help you find the right bank to open accounts with, make sure you’re eligible to register under the Malta Tax Refund System, and take care of your annual returns – of course, these are just a few key processes that our team can do to make our clients’ lives easier. Once you’re up and running, our highly-experienced advisors can help you to manage the financial side of your operation, including:

  • financial and cashflow projections
  • local and EU funds

Additionally, you will need to keep track of performance and take corrective action when necessary. We can provide you with relevant and actionable guidance so as to ensure the long-term success of your business.

As you go along, you will also need to make sure that your company abides by legal obligations to report to local authorities, including the MFSA, and the VAT and the Inland Revenue Departments. We’ll be there to assist you with the full compliance of your business with the relevant regulations.

If you have any questions about opening a start-up in Malta, get in touch with one of our advisors today!

4 Benefits of Prioritising Communication in the Workplace

Communication is Crucial

Running a business is no easy feat. When your team is made up of individuals with distinct personalities and multi-faceted professional experience, you stand to learn a lot as a business owner and as a person. Something I’ve learnt that has helped me manage my team better is taking the time to speak to each employee about things that matter – be it the last report they submitted or what they got up to over the weekend.

Whether you’re a family-run operation like NM Group or a huge, international corporation, fostering strong verbal and non-verbal communication is a key part of what it takes to run a successful company that can conquer the test of time. But what makes communication so important? Here are four valuable benefits of good workplace communication that I’ve discovered over the years:

1. It builds better teams

Encouraging clear, consistent communication in the office helps employees and managers alike to foster happier, more efficient teams. When coworkers feel comfortable expressing their professional opinions, it makes it that much easier to share ideas, brainstorm, and collaborate on projects that could boost the company’s profile in a big way. Encouraging communication creates a better atmosphere for offering and receiving constructive criticism which, in turn, leads to further professional development.

2. It improves employee morale

When colleagues and managers communicate more effectively, they feel happier as a result of the simple fact that they feel understood and more in-sync with the rest of the team. A positive atmosphere is a truly invaluable resource, and has a major role in crafting the kind of company culture that attracts and retains talent. Making this happen might mean tackling issues that may seem inconsequential on a large scale, but actually affect your employees’ moods on a day-to-day basis. Don’t forget – happy employees mean happier, more satisfied clients and customers!

3. It increases transparency

Opening the gates of communication is the key to strengthening trust between employees, departments, and across different levels of management. One way of building that trust is to be as transparent as possible when it comes to letting employees know how the company is faring, and what’s going on in the industry as a whole. Transparency means being proud of ‘the good’, while being able to acknowledge and evaluate ‘the bad and the ugly’ too; talking to employees about the company’s weaknesses – as well as its strengths –  is a great way to make every member of the team feel included, while providing a benchmark against which progress can be measured and enjoyed.

4. It helps new recruits feel welcome

Encouraging clear communication ultimately creates the kind of company culture that professionals look for and enjoy working in. An office that communicates well is one that helps employees – new and old – to feel at ease collaborating, asking for help, and offering assistance to their coworkers.

We’re always on the lookout for new talent – if you think you’d be a good fit at NM Group, we’d love to hear from you!

What does Malta’s 2018 budget mean for your business?

Malta’s 2018 Budget

This week saw Finance Minister Edward Scicluna reveal Malta’s 2018 budget.

Here are just a few highlights of what this budget means for you, your business, and your staff.

Cost of Living Adjustment (COLA)

A €1.75 weekly wage increase will be given as a cost of living adjustment. This is also attributable to pensioners in full and pro-rata to students.

Income Tax

Income Tax Benefits

Individuals whose income is less than €60,000 per annum, will receive a one-time tax refund ranging between €40 and €68, depending on the level of income as shown below:

Single Computation
Income (€) Refund Amount (€)
0 – 15,000 60
15,001 – 30,000 50
30,001 – 59,999 40

 

Married Computation
Income (€) Refund Amount (€)
0 – 20,000 68
20,001 – 40,000 56
40,001 – 59,999 44

 

Parent Computation
Income (€) Refund Amount (€)
0 – 15,000 64
15,001 – 30,000 52
30,001 – 59,999 40

 

MicroInvest Tax Credits

MicroInvest is being extended to undertakings which employ less than 50 full-time employees (currently 30). In addition, the tax credit capping is expected to rise from €30,000 to €50,000 for undertakings based in Malta and from €50,000 to €70,000 for undertakings based in Gozo and for undertakings with women holding the majority of shares or self-employed women.

Tax Evasion

Fines payable by companies or individuals which have been found guilty of tax evasion shall be increased. Moreover, more resources shall be allocated to Joint Employment Task Force to combat tax evasion.

Employment Measures

Increase in Minimum Wage

Minimum wage earners will receive an increase of €3 per week from the second year of employment and an additional €3 per week from the third year of employment. Such employees will also be entitled to the increase in COLA.

Additional one day leave

An extra day of vacation leave shall be granted to all employees.

Value Added Tax (VAT)

VAT Exemption

The VAT exemption threshold below which a taxable person registered under Article 11 does not need to charge VAT has increased from the current €14,000 to €20,000.

VAT Grouping

The Government is proposing the introduction of VAT Grouping for sectors such as financial services and gaming. Through VAT grouping, entities which are legally independent, have a permanent establishment in Malta and engage in related economic and administrative activities, can register as a single entity. This would mean that supplies between group members will fall out of the scope of VAT.

Reduced VAT Rate on certain means of Transport

The VAT rate for hiring bicycles will be reduced to 7% and the VAT refund scheme on motorcycles, scooters and pedelec bicycles will be extended.

VAT Refund on Car Registration Tax

During 2018, VAT will be refunded to those who registered their vehicle in 2007.

Offset of Payments

A new system will be introduced which will allow the offset of payments due to/from Government. This will be applicable for companies that offer services to Government.

Property Measures

First-Time Buyers Scheme

The tax scheme for first-time buyers resulting in no duty due on the first €150,000 will be extended for another year.

Second-Time Buyers Scheme

Individuals who sell their first residential home, being their sole owned immovable property, and acquire another shall benefit from a refund of a maximum of €3,000 of the duty on documents paid on the acquisition of their second home. This refund shall increase up to a maximum of €5,000 in the case of disabled persons and their parents.

White Paper on Property Rental

A white paper to reform the rental market shall be published in the coming months. This white paper will necessitate the public registration of all rental contracts and that rent increases are regulated through conditions in the contracts made. This will be done to protect the rights of both the lessor and the landlord.

Social Measures

  • The maximum ‘in-work benefit’ applicable to parents where only one parent is employed, will increase from €350 to €450 per child per year depending on the annual income of the family.
  • The €300 annual grant for persons over the age of 75 who still live in their personal home, will continue to apply next year.
  • In order to incentivise the use of environmentally friendly vehicles, an exemption from registration tax for electric/hybrid vehicles will be introduced. No road licence shall be paid on such vehicles during the first five years from registration.

Pensions

  • All pensions, both contributory and non-contributory are set to increase by €2 per week.
  • As of 2018, individuals aged 61 or over who are in receipt of a pension and who are still in employment, and thus paying contributions, shall be entitled to have their pension recalculated at the age of 65 to include the contributions paid between the age of 61 to 65. Such an entitlement shall be available to pensioners who have not paid their complete social security contributions during their employment.
  • Self-employed and part-time pensioners who have not reached the age of 65 shall be entitled to pay their social security contributions at the rate of 15% on the net income on a pro-rate basis.

3 KPIs Every Business Owner Should Know

Whether you’re the owner of a small business or head of a larger, more established company, it’s safe to say that your weekly schedule is overflowing with meetings, tasks, and to-do lists that need your attention to keep things moving in the right direction. With so much happening on a day-to-day basis, it might seem  daunting to sit down and face endless streams of numbers, facts, and figures – but it’s an absolutely crucial part of seeing how far you’ve come, and how best to move forward and plan for the months and years to come.

Here’s a look at 3 of the most important key performance indicators you should know about when it comes to running a business:

1) Sales

Any business owner knows that sales are the very lifeblood of a company, and should therefore be tracked and reviewed meticulously. Make it a point to review your sales at least once a month, keeping a close eye on the main drivers behind those sales; check conversions, site visits, and email list growth, and make use of spreadsheets to organise all of that information.

Top Tip: Categorise sales into the various products and/or services offered and periodically analyse what’s performing well, and where improvements and adjustments can be made.

2) Profit

Sales and profits go hand in hand; the analysis of profit inevitably leads to the analysis of cost of sales and administrative expenses. One effective way of monitoring your profits is to follow your margins, namely gross profit and net profit margins, then compare them to your expectations, targets, comparatives, and industry averages. While many owners do pay themselves a salary, which is included in company expenses, others may choose to take a draw or ‘distribution’ from the business instead.

Top Tip: Consider the tax implications and potential benefit of taking a director’s fee or salary, as opposed to dividends.

3) Cashflow

If you’ve ever found yourself scratching your head, wondering where all the money’s gone, then consider taking some time to think about cashflow and how it ties into your business. Break things down by asking:

  • How much money did we have at the start of this period?
  • How much money did we have at the end of this period?
  • Where did the difference go?

Generally speaking, cashflow changes are caused by tax payments, profits, investment, and working capital changes, but you may find that a portion of your cashflow has been misallocated.

Top Tip: Ask your accountant or financial advisor to help you identify potential cash flow pitfalls and suggest a corrective course of action.

Want to know more about how to analyse these KPIs? Contact our team at NM Group and we’ll help you crunch those numbers.