A business plan is a document that:
- Describes all the major aspects of a future business or project.
- Analyzes all the problems that it may encounter in the future.
- Determines how to deal with the problems identified.
A properly crafted business plan should give a clear answer to the questions: “Is investing money in the planned business worth it? will it bring revenues that will replenish all the efforts and money spent?”.
Important! Writing the business plan should be carried out by current or future leaders of the company, that is, those people who are courageous enough to take responsibility in carrying out the of the business plan. But this does not mean that you you should not feel free to use the services of consultants and experts in this field if you want to. However, do know that they charge quite a tangible sum for it.
So, the main objective of the business plan : it helps entrepreneurs to deal with the following tasks:
- Examine the capacity and development prospects of the future market.
Estimate the costs for the production of the desired market products. Compare them with the prices.
Identify those indicators by which it will be possible to regulate the state of affairs
Business Plan Structure
The business plan has a complex structure. The whole life of the company from the moment of creation to the moment of stability and sustainability must be spelt out in a business language, while being intelligible and lively. The business plan should be clear to any entrepreneur, financier and banker, as well as potential partners. A confidentiality memorandum is prepared in order to warn persons familiar with the business plan about the confidentiality of the information contained in it. The memorandum may contain a ban on copying, on the transfer of the project to third parties and the requirement to return the project to the author.
The business plan should always be short and capacious. However, sometimes, in order to reveal the essence of the problem, it is made quite deep in content. Recommended volume: 30 – 70 pages, not more. And all the additional materials should be put in the annexes to the business plan.
Remember! It is important to provide dosed information.
Here are the main points that you will need to provide:
- Abstract (up to 1 page) – a written appeal for senior management.
- Resume (1-3 pages) – basic information to get acquainted with the business plan.
- Business plan (45-60) – for a detailed study of the project by investor’s experts and experts.
Remember! Any business has its own characteristics, therefore, there can not be a kind of “standard” plan that is acceptable in all cases. There is, so to speak, only a general principle, the structure of a business plan.
Next, we describe the content of the business plan in more detail.
1. Goals and objectives
Here you will need to give an analysis of the idea (SWOT – analysis). Reveal strengths and weaknesses, as well as opportunities and threats.
- Analysis of the idea.
- The objectives of the activity (what you want to achieve).
- Characteristics of the industry.
2. Product (service)
It is important that this part be written in a clear, precise language, understandable to a non-expert.
- Description of products or services and their application.
- Necessary technologies for business and qualification.
- License / patent rights.
3. Market analysis
Market and marketing is a decisive factor for all companies. You need to first collect and process a large amount of “rough” information.
- Competitors (their strengths and weaknesses).
- Market segments.
- Market size and growth.
- Estimated market share.
- The composition of your clientele.
- The impact of competition.
4. Marketing plan
At this stage, the main task is to gain the trust and location of a potential investor. If you do not have special education, you should read a book on marketing or check out our article on marketing strategy and marketing plan contact a specialist.
- Marketing arrangement (the main characteristics of products, services in comparison with competitors).
- Pricing (how to set the price of the product).
- The distribution scheme of goods.
- Methods of sales promotion.
5. Production plan
Here you should consider all issues related to the premises that you occupy, their location, equipment, staff.
- The location of the premises.
- Sources of supply of basic materials and equipment.
- The use of subcontractors.
6. Managerial staff
Investments are made in specific people, not in a business plan, because this segment is one of the most important.
- The main team of management.
- The structure of the staff.
7. Sources and resources required
In this segment, you should provide your thoughts on:
- The amount of funds required.
- Sources of their receipt, form, terms as the case may be.
- Terms and conditions of refund.
8. Financial plan and risks analysis
Business people are made up of those who like to work with numbers, and those who are afraid of them. For those in the first category, this section of the business plan is unarguably the most important.
- Sales, profit/loss, cost, etc.
- Risks, and how they can be prevented.
9. Detailed financial plan
You need to include in your business plan a detailed financial plan:
- Forecast sales.
- Estimates of profit and loss.
- Analysis of cash flow (monthly for the first year, then quarterly in subsequent years).
- Yearly balance sheet.
And finally, I would like to give some helpful tips for creating a business plan:
- First, read a few other business plans.
- The business plan should reflect your who you are.
- Preparing a business plan is a something that requires the connection of the imaginations.
- Gather experience and skills in the chosen direction.
- Only write on those days when you are full of energy, not when you are physically and mentally exhausted.
Wish you luck!!