Business Plan

[Van88Guy]

DMFXTrader,

It is not unusual for banks to ask for business plans. On the one hand they want to be certain that you are a serious person. On the other hand they want to make certain that you aren't laundering money. I think you have to do a one-three page summary, showing the markets and products that you will trade. Outline your mechanism (scalp/swing/long term hold etc.)

You should put the details in a three year Excel sheet, showing revenues on the top line, and then deducting all the usual expenses, such as data source subscriptions, commissions, phone, internet, rent, heat, and don't forget a normal salary for yourself. Near the bottom you put your pre-tax profit.

You might want to tell them about your capital expenditures for equipment, software, and development.

Once you start filling in the gaps, it will be an enlightening experience for both you and your banker.
Further down the road, when you are making lots of money, you might need the banker's help.

Good luck DM

 

[angela83]

how's things going with your business?

 

[audrius76]

bankrupt

 

[Goldminds]

I am starting up my own Limited company so that I can go full time trading forex in a couple of months and I am trying to open a business bank account to go with the company but the bank wants a business plan as they do not fully understand what I will be doing. Has anyone written a business plan for this kind of business or are there any links to example business plans for trading forex, commodities and indices that anyone knows of?

Any advice would be appreciated.

Hei, i have been struggling to write one my self, in the direction of becoming a trader for a company or an investor. What i did is to show an overview of the business, parties involved, show how profit is earned, and then profit expectation, and finally pairs i deal in and the reference materials.

 

[coopster]

Re: Company Trading

I intend to move all my trading to my limited company next year - not from a tax point of view more because I intend building a Company which derives most of its income from various markets
ta

Did you ever do this?

Not sure why you would need a limited company if not for the tax benefits of deferring your personal income.

I had a company for my engineering business and found it impossible to get money out of the business that i could actually spend without paying the same tax as if i had taken it all as a salary.

 

[Johnkarner]

A business plan is a formal opinion on a range of business objectives because it is believed attainable, and a plan for achieving the objectives. It may also contain basic information about the organization or the team strives to achieve these objectives.

 

[leerees]

Re: Company Trading

I intend to move all my trading to my limited company next year - not from a tax point of view more because I intend building a Company which derives most of its income from various markets....starting with fx then softs, indices etc...so more of a creative exercise rather than trying to squeeze every drop of tax efficiency

Am still a bit confused what type of Instrument is best to trade fx with through a limited company:

I see there are 3 choices:
spot forex, spreadbetting or CFDs

I assume the tax advantages of spreadbetting are not relevent here and that all three would allow losses and fees to be offset.

On one level all three are the same (the charts , indicators, methodolgy approach etc) and that its just the calculations, leverage etc which are different....

ANyone had experince in this ?

ta

With regards to tax I'm afraid that you have to pay it. The spread betting clause only applies to people who use SB as a second income.

I suppose if you wanted to save money you could get a crappy part time job and then trade forex as your second job, but you would need to check with HMRC what criteria they use for assessing what constitutes a "second job", there may be a clause that says the highest earning job is classed as your main job. Another problem is I don't think there are any reliable MT4 spread betting firms, so you won't be able to use EA's.

You've really got to ask yourself "is the ducking and diving really worth the hassle", excatly no, just pay the tax.

Obviously when it comes to tax you can put through things like TV's and computers. I brought a nice samsung 42" flat screen telly for £700, although I do use it for entertainment, i claimed it as a business expense as I trade on it. One thing I will say is definitely treat yourself to a nice big screen and fast PC, it makes all the difference.