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4 weeks ago (11/11/22) 24 Views

How to make a business plan

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A business plan is a roadmap for any business venture. It will be useful and even necessary when creating a business from scratch, for a separate direction or during preparation for implementing a new project.

Who might need your business plan?

  1. Potential investors. They will want to get comprehensive information about the subject of investing their funds to conclude the feasibility of the investment.
  2. Banks. Without a high-quality business plan, you should not expect to receive a loan for a business venture.
  3. To partners. You can convince a company or an entrepreneur to enter a new business with the help of a well-prepared business plan.
  4. You personally. Opening a new case cannot do without a clear action plan considering all aspects. A business plan will be useful primarily to you.

The document performs two main functions: programming and presentation. On the one hand, business plan writers contains a list of indicators and a sequence of actions necessary to implement a business idea. On the other hand, it represents the attractiveness of this idea to potential partners, investors or creditors.

Some experts recommend separating the internal (for you) and external (for others) sections of the business plan (for others). However, such a distinction is highly contentious, as one version of the business plan may conflict with the other, jeopardizing the achievement of the stated objectives.

A business plan can be considered optimal if it is equally realistic and convincing for the owner of the future business, partners and investors.

Preparation of a business plan

To draw up a high-quality business plan, it will be necessary to collect and analyze a large amount of information, which will later need to be structured, systematized and presented as a document.

The best way to start is by asking yourself questions and finding answers.

Who is the target audience of the future business?

When planning to open a business, you should clearly understand to whom you will sell your goods or services. And for this, you need a comprehensive and accurate portrait of the target audience:

  • age,
  • social status,
  • income level,
  • problems and needs,
  • product awareness – do prospective customers know they need your product?
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By understanding these questions, you will be able to more accurately position your company in the market.

What is the level of competition in the chosen industry?

We need reliable information about potential competitors. When preparing a business plan, you should create a checklist of the competitive field and make a structured analysis according to the following points:

  • list of competitors
  • the scale of competitors,
  • the price level of competitors,
  • the quality of the product they offer,
  • the quality of their services,
  • territorial placement,
  • logistics,
  • the level of innovation implementation.

You can get the necessary information using data from open sources, monitoring, the mystery shopper method, etc.

What is the concept of your ad?

Even if you are confident in your product, it does not mean there will be a high demand for it.

You must interest the buyer and draw his attention to your store and product. It can be a unique store concept or an interesting marketing move that will draw the buyer’s attention to the product. Correct and interesting product presentation plays an important role in sales.

Good store location, coffee or a small gift for each customer, loyalty programs, bonuses and promotions. All these elements of marketing play a significant role in attracting and retaining customers.

When forming the concept of the ideal purchase or product, you will answer the question: “Why should the customer buy your product?”

What will the organizational structure of the business look like?

Here we formulate the organizational needs of business at all stages of creation and development.

  • Management composition.
  • Number, functionality and interaction of structural units.
  • Several personnel. Full-time and outsourced positions.
  • Premises – industrial, office, retail, etc., their area depending on the number of personnel. Necessary equipment.
  • Labor costs, rent, and other mandatory payments.

All these parameters must be predicted considering the temporary stages of business creation and development.

Step-by-step action plan

Creating a step-by-step business organization plan is necessary to avoid wasting time, effort, and money. For example, register a business entity, open a bank account, obtain the required licenses and permits, rent an office, hire employees, sign contracts for the supply of raw materials or finished goods, order a website, conduct marketing, and commence sales.

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Each of these steps will be effective if they are timely. Collect information on time and financial costs for all organizational stages and model their implementation.

Drag the results to the timeline, and you will get a visual organizational plan.

Financial plan: how much will we invest and spend, and how much will we receive?

The financial model is a key part of the business plan. Here it is necessary to submit a forecast of all sources of funding and income, as well as all expenses (regular, one-time and periodic) for the implementation of organizational, marketing, and operational activities.

If the business plan is prepared for a small or micro business and is not planned to attract outside money, you can make the necessary calculations yourself.

If we are talking about the creation of an enterprise, experts recommend engaging a consultant and forming forecasts of the company’s three main reports in the business plan:

  • Profit and Loss (P&L) Statement.
  • Cash-flow report.
  • Balance.

At the same time, the financial plan should be formed according to three possible scenarios: optimistic, realistic and pessimistic.

This stage is the decision-making point in creating a new business.

Based on the results of the forecasts, we ask ourselves: is the business idea viable? Do we believe in her? What risks and threats can affect the implementation of the business idea? Are you ready to start implementing, or is it better to stop?

Creation of a business plan: we turn information into a structured document

A completed business plan will be needed if you plan to attract funds from investors or creditors to implement the idea.

The classic structure of a business plan:

  1. summary,
  2. marketing strategy,
  3. organizational plan,
  4. financial model,
  5. Risk analysis.

Summary

This is the first section of the business plan, but it is usually written at the very end. In essence, this is a meaningful concentration from your plan, which briefly outlines the business idea, what is needed for its implementation, what is the essence of the offer to the investor or partner, and what are benefits from its partnership.

How professionally written your resume is can determine whether an investor will want to read your business plan in its entirety.

Experts recommend using the “Elevator Speech” technique when writing a resume – a short speech with which you can “ignite” the interlocutor with your idea.

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Marketing strategy

This block contains information about the market structure, product features, promotion logic, customer attraction and retention channels. How knowledge about the product will be created, how the interest of potential customers will be created and stimulated, how it will be converted into sales agreements, and how the brand and corporate style will develop .

Organizational plan

Here you need to lay out everything needed to start a real business. Organizational structure, premises, equipment and computer equipment, automation tools, personnel, communication channels with key partners and suppliers, logistics, etc. Each direction must be linked to the corresponding stage of implementation.

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Financial model

This section should present forecast data on the main financial indicators of the business, formulated in three scenarios of the development of events: optimistic, realistic and pessimistic. At the same time, it should be determined in particular what factors of influence will ensure the occurrence of this or that scenario and how the management of cases will differ.

Risk analysis

This section lists possible risks and measures to counter each risk. It makes sense to name a critical risk, after the occurrence of which it is worth “pulling the stopcock.”

What else can be added to the business plan?

All of the above is the basic part. Additionally, you can add any information you consider important to the business plan.

For example, talk about the educational or environmental value of the future business, its positive impact on the development of local self-government or solving social issues.

Scope of the business plan, planning period, execution

  • There are no clear guidelines for the scope of a business plan. It is important to maintain a balance between comprehensiveness and brevity. Do not include a lot of minor details in the document.
  • A business plan is usually drawn up for the period from the preparation of the start of the business to its break-even and stable financial indicators. As a rule, it is 1-3 years.
  • Special attention should be paid to drawing up a business plan. Nowadays, such documents are increasingly prepared not in the form of a text file but in the form of a PowerPoint presentation. This option is clearer, and in case of the need to protect the plan before investors, there will be no need to prepare a new document.

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