Business Planning Goals
Choosing your business, you need to decide how you will organize it, which means you need to plan for the near future. Everyone needs a business plan:
Those who you are trying to lend money for the implementation of your project, that is, bankers and investors.
Your employees who want to understand their tasks and prospects.
And you yourself - to test the reasonableness and realism of their ideas.
A business plan is a document that:
- Describes all major aspects of a future enterprise or project.
- Analyzes all the problems that it may encounter.
- Determines how to solve the problems identified.
A properly formulated business plan is a clear answer to the questions: “Is it worth it to invest money in the planned business and will it bring revenues that will pay back all the effort and money?”.
Important! Planning should be carried out by current or future leaders of the company, that is, those people who are not afraid to take responsibility for the implementation of the business plan. But this does not mean, of course, that it is not necessary to use the services of consultants and experts in this field. However, consulting firms charge decent amounts for its compilation, ranging from anywhere from $ 2,000 to $ 40,000. But you can make it yourself, having incurred minimal expenses. Involving yourself personally in this work - you will not only model your future activities, but also check for yourself and the plan itself.
So, the main purpose of the business plan: it helps entrepreneurs to solve 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.
Keep in mind! The business plan is usually written for the future, and it should be made about 3-5 years ahead. At the same time, for the first year, the main indicators should be divided in a monthly breakdown, for the second - quarterly, and only starting from the third year, it should be limited to annual indicators. Although if we take into account our economy, its variability, then planning for more than a year is not very effective. Therefore, many are now limited to writing a plan for the year.
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 spelled 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 transferring 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 dispensed 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.
Your business should always start with the conclusions, you should write them at the very least, but they should be the very first item in your business plan. A resume is the result of an already written business plan. This is the only part that most potential investors read.The purpose of a business plan.
- The need for finance, for what purposes they are needed.
- A brief description of the business and its target customer.
- The main differences from competitors.
- Key financial indicators.
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 purpose 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 a special education, you should read the book on marketing, 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 section is one of the most important.
- The main management team.
- The composition of the staff.
7. Sources and resources required
In this section, you should provide your thoughts on:
- The amount of funds required.
- Sources of their receipt, form, terms.
- Terms of refund.
8. Financial plan and risk analysis
Business people are divided into those who like to work with numbers, and who are afraid of them. For those in the first category, this section of the business plan is undoubtedly the most important.
- Sales, profit, cost, etc.
- Risks, and how they can be avoided.
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).
- Annual balance sheet.
And finally, I would like to give some useful tips for developing a business plan:
- First, read a few other business plans.
- The business plan should reflect your personality.
- Preparing a business plan is a job that requires the connection of the imagination.
- Gain experience and skills in the chosen direction.
- Write only on those days when you are full of energy, not when you are morally and physically exhausted.