To make our lives better and more comfortable, many of us have concluded that we should open our own business. It is profitable to work for yourself, but to achieve your goals, a novice entrepreneur must first make a business plan. What it is and how to write it correctly you will learn from this material.
The Concept Of A Business Plan
A business plan is a step-by-step guide to action for entrepreneurs to start their own business, develop it and generate income. With just an idea, it is impossible to succeed: a business plan is required. On this issue, you can turn to professionals and buy a ready-made document, but in fact, the development of a strategy on its own is not so difficult.
The project usually includes not only costs and revenues, but also the proper allocation of resources, pitfalls, risks and opportunities, and aspects that will affect the success or failure of the enterprise.
Purpose Of The Business Plan
Based on the purpose of the business strategy, a plan can have two purposes:
- To be drafted for the investor. To attract external capital to finance the project, logical and clear development of a business plan is required. Competent calculations of investments and profits, as well as a clear business perspective, should incline an investor to invest funds.
- Created for yourself. The form and method of presenting the plan, its structure does not matter, the main thing is that it should be understandable to you. It is important to understand for yourself that a well-crafted manual is already half the success.
Types Of Business Plan
Based on the above objectives of the strategy and addressees of the plan, you can distinguish the following types:
- internal – designed only for the employees of the organization, is an instruction with costs, property, budget, and so on;
- external – for government agencies, banks, investors, which is a certain way may contribute to the development of small businesses.
Opportunity Assessment
Before starting to make a business strategy, you should make a SWOT analysis, that is, to characterize the pros and cons of the activity, as well as threats (risks) and opportunities. If you know how to make a business plan, but have not taken into account all the nuances, the usefulness of the work done will be minimal.
- Strengths – what distinguishes your business from your competitors. You may have the best specialists in the field, or you have found a way to reduce the cost of the product.
- Weaknesses – what you lack to start a business. You may not have the space or any equipment.
- Opportunities – perspectives that can play into your hands. For example, you can participate in a contest and win a grant.
- Risks – negative factors pulling the business back. For example, high tax rate, the need to obtain a mass of permits, and so on.
Business Plan Step By Step
Having dealt with theory, we move on to practice – answering the question of how to make a business plan step by step instructions. The document should be drafted clearly and competently, and contain the following structural elements:
Summary
The first and defining part of the strategy is the resume. When drafting it, you should remember that it is this part of the strategy that should attract the investor, as it implies the main points of information from the plan. It briefly describes your business goals, achievements, and explains the potential success of the idea, emphasizing the benefits of the entire strategy. Even though the summary is the first part of the plan, it is written after the other elements are ready. The summary should not be written beautifully. Investors have a lot of experience and with a cursory glance at the text, will immediately understand whether it is worthwhile or not. It is clear and concrete concise information (up to two pages), which will immediately initiate you into the project. The executive summary is designed to convince investors that the game is worth the candle and profits will follow immediately.
The executive summary contains the following information:
- information about the company (what it does, who founded it, leads it, what successes it has had, and other information as needed);
- the underlying goals of the future business;
- resources required to implement the project (investor funds, credit);
- methods affecting the implementation and success of the case;
- plan and schedule for bringing the project to life, possible adjustments;
- ways and terms of return of investments (borrowed sum), profit level;
- what effect is expected to be achieved?
Objectives
The goal of the company refers to a specific result that the entrepreneur plans to achieve. When setting a goal, it is important to note the uniqueness of the business, its benefit, and its benefit to consumers. Do not forget about the technological side of the business, as well as further development: indicate that the company will not go to zero, and will gradually increase profits.
Market and Industry Analysis
The important question is whether you should open this particular business, whether it will be in demand and promising. The answers to these questions must be affirmative. You should convince the investor that the market needs your business, that the business will occupy a certain niche and can become a leader in it.
This section should also outline a portrait of the potential buyer, and give projections for the future development of the industry.
Product Information
Regardless of whether you plan to sell products or sell services, you should provide investors with a clear description. It’s important to follow the points to describe the product:
- name;
- characteristics;
- purpose;
- benefits;
- copyrights, license, certification;
- performance;
- environmental impact;
- packaging;
- quality assurance.
Business Financing
When wondering how to write a business plan, don’t forget the section on finances. How much money you need to get started and what the financial requirements are for the next five years will be very helpful for investors. Understand the difference between a payday, pay cycle, and pay period. Investors should be aware of where and how they plan to spend their financial resources.
Marketing Plan
Your step-by-step plan should include a marketing strategy – exactly how to promote the product.
First, you should study the target audience, then determine the characteristics of the product that will make it stand out from the competition. And finally, a plan for realizing the benefits of the product.
The marketing plan should logically describe the relationship between quality, price, and profitability.
Appendices
The strategy should end with appendices. These are an addendum to the plan, allowing for a better understanding of what is written. Appendices can include:
- product catalogs from suppliers;
- copies of documents (contracts, licenses, permits);
- a description of the product features;
- financial reports, and more.
Final Words
As you can see, creating a business strategy is not difficult. Only the awareness of the seriousness of the business and a well-crafted business plan will be an important step towards the success of your enterprise. It will allow you to present your future business in a favorable light in front of investors, to gain their support, and to begin long and fruitful cooperation, which will result in immediate profits.
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