A business plan is a document that is usually prepared after a business simulation and demonstrates a technique for bringing an idea to life.
The business idea's success is established in business modeling, and all key components and assemblies of the future business are checked. In a business plan, the way to achieve the ultimate business goal of an idea or project is proved and justified. As you know, the ultimate goal of a business is profit. Therefore, the business plan shows how much you can earn, for how long, and with what resources.
Any business is a risk. Risk is potential loss. Business planning will help you choose the best path, considering the likelihood of possible risks, for example, commercial. Thus, anticipating the future with the help of planning can reduce the possibility of risks and prevent the occurrence of unplanned expenses and expenses - the main threats to a business, especially a start-up.
What is a business plan?
In general, a business plan is needed for three things.
1. Ensure that the plan for implementing the idea is correct and that you are on the right track.
2. Attract funding (internal or external) for project implementation. For example, you are getting a loan from a bank. Or find investors: funds, individuals. But, of course, nobody gives money just like that. Instead, lenders need guarantees of return on investment and profit: quantitative and qualitative evidence of the idea's profitability, precisely the business plan.
It is a guide to action for the implementation of the project. The plan must be implemented as designed. Suppose you have started implementation, and the indicators do not correspond to the planned ones.
Thus, a business plan is necessary to make sure that the idea is workable, find funds and successfully implement it.
The business plan considers all the key elements of financial and economic activities that are important for the functioning of the business according to the planned indicators. In addition, structuring and systematizing implementation standards will help bring the project to life with minimal risks and within the planned costs.
You cannot do without a business plan if you need to find financing from external sources, such as taking a bank loan or raising funds from an investment fund or a private investor.
Anyone can develop a business plan. However, to create a suitable business plan, you will have to work hard and spend time and effort.
Composition of a typical business plan
There is no single standard for business plans. Everyone who finances and invests puts forward their demands. However, the composition and structures of different business plans are similar.
In general, a business plan consists of 2 main parts:
1. Descriptive. The information and analytical part describe in detail the implementation of the business model: all financial and economic activities (production, technology, marketing, sales, and other necessary resources), on which the strategy for achieving the planned results are based. Much attention is paid to the marketing section. It is in this section that the market and its potential are described. No need, no profit.
2. Financial Model and Economics. Specific financial and economic calculations and indicators of the project. Usually, this is an Xls file.
The greatest work is spent preparing a description when drafting a business strategy. On the other hand, the financial and economic model may build once the first data is collected and the narrative aspects are completed. As a result, the company strategy can be put together as quickly as possible.
In creating a narrative section, it is necessary to find, collect and process a large amount of data from various sources. Therefore, it is difficult and long. Therefore, to avoid wasting time in vain, the development of a business plan must be planned and determine what information will be required.
How to develop a business plan yourself
To not spend a lot of time developing a business plan, follow the standard development steps.
First, decide on the purpose of developing a business plan and for whom it is intended: for yourself, the bank, and the investor. Of course, the purpose of the business plan writer will affect its content. In some cases, a deep study of the business plan may not be required but is usually required.
When the purpose of developing a business plan is known, its structure will also be clear. However, different data and information will be required depending on the design and content. Therefore, it is important to understand why and for whom the business plan is at the initial stage.
The majority of development efforts will be focused on searching, collecting, and processing various data. This is a difficult and long process.
If the structure and content of the business plan are not defined correctly, additional resources will have to be spent on changes. It's a waste of time, effort, and, ultimately, money.
The main stages of developing a business plan
With the help of the main stages of developing a business plan, you can organize a high-quality business plan development. Locations differ in effort and time.
Planning. Most do not pay enough attention to this stage, despite its importance. Only a small part is planned. If not, there is no planning stage at all. We repeat, guaranteed. It is better to spend more time and energy planning now than in the middle, or worse, towards the end of development. Here's what to do in the planning phase:
1. Define a goal.
2. Choose the structure of the business plan.
3. Prepare a list of required data and information.
2. Collection and analysis. This is the most time-consuming stage - you need to find, collect and process a large amount of different data from various sources. It is important to gather information only from trusted sources that can be quickly cross-checked and referenced. If you use information from a dubious source, lenders and investors will likely disagree with your calculations.
3. Development. With the necessary data and information in hand, you can safely begin to develop a business plan.
Typical sections of a business plan
· Resume. A summary of the idea and its results. So that from the first page, the interested person could get in the know.
· Product and production (product (characteristics, qualities), technology).
· Marketing (market research: target audience, market volume, market potential, competition; situational analysis)
· Sales (sales plan)
· Personnel (list of managers)
· Risks (production, commercial, financial, investment, environmental)
The sections of a business plan depend on developing a business plan. Therefore, there are many different kinds and types.
Conclusion
Developing a business plan is a complex process. First, a lot of data needs to be found and analyzed. Then, based on the analysis, work through each item of each section of the plan to plan the development of the business and successfully implement it. As a result, business planning will help you avoid numerous risks and achieve results in the shortest possible time and with minimal resources.
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