As you know, the guides to realizing a successful business – a business plan and 8 simple rules that will allow you to multiply your income. Read more about the business plan. Its writing – the primary task for the entrepreneur who conceived the project, and therefore will have to spend a lot of time. Not an exception is the business idea of earning profits on lotteries. But the time spent will pay for itself a hundredfold, if you approach this task with all seriousness. It is important to remember that the plan is not an answer for the bank or investor. It is the plan will allow you to understand and assess the prospects of the idea at the planning stage.
Even the most optimistic plan actually faces the reality of life situations. Therefore, when writing it, you should not only realistically assess your resources, but also adhere to a certain structure of writing.
Why is the competent development of a business plan so important?
Planning to organize a business using only their own funds, you can allow some errors in the writing of the plan. But they will result in unforeseen situations in the process of activity. If, for example, drawing up a business plan for production, you will make the slightest mistake, the bank will refuse to lend. Therefore, haste is inappropriate.
Points of the plan
- market analysis
- organizational plan
- Financial plan
- Performance analysis
- Risk analysis
- Sensitivity analysis
From the perspective of a business owner, how would you prefer to select an employee for a responsible position in your business? First and foremost, you will familiarize yourself with the candidate’s resume. It’s the same in terms of: the resume is your face.
The resume should explain, first of all, to yourself, what you want to have in the end, what benefits you plan to bring to your business. In other words, whether the game is worth the candle. Resume should interest a potential lender. And any bank employee follows a certain guideline to evaluate the effectiveness of the plan. A mismatch leads to a refusal to cooperate. The bank wants to get its money back and earn its interest on your project.
The investor’s interest is to receive a larger share of the profit in case of success. This is the price he pays for the losses he is willing to incur in case of failure. Serious investors consider the plan on the merits, and therefore it is necessary to thoroughly justify the marketing component of the income and expense parts of the plan. This information free business plans are unlikely to provide, especially if your idea is original.
The plan should show the investor all your assets, but intangible: licenses, contracts with potential suppliers, testimonials and customer bases, with the expectation of which the case is conceived.
You should not forget about the emotional component of the document. It should be not only presentable, but also contain convincing graphs, charts, showing the profitability of the project.
For the successful realization of business, experienced entrepreneurs write even two versions of the plan: one for the bank or investor, the other for themselves, where all the ways of realization are worked out in more detail.
The summary outlines the business idea with efficiency indicators and the amount of investment required.
A very important section is the justification of the revenue side. As a rule, this section is very lame in those who for the first time independently undertake to write it or decided to download a free business plan. To understand the scheme of justification of the revenue part, it is enough to refer to the experience of organizing online stores.
The Internet very clearly demonstrates all the marketing techniques that were developed many years before the widespread introduction of the World Wide Web into our lives.
We begin with making a sales plan
First – estimate the volume of our market. But how to do this? To do this, you can buy a ready-made study from a marketing agency. Another option – resort to the help of the owners of already functioning online stores that sell identical products, and perhaps they will even provide a business plan for free. One way or another you need to determine: how much of this or that type of product is realized per month in a particular region. It is necessary to plan and the dynamics of sales, that is, what will happen to demand in the coming months or year. Although, to minimize risks, you can organize business in those niches, which are characterized by virtually perpetual demand.
Next, identify your competitors and their market share. The Internet offers endless possibilities for this. Competitors can be identified with just one query using the words “buy this” or “sell that”. Just as quickly you can determine the advertising budget of competitors. By the amount of the advertising budget is determined and the market share of each competitor. It is almost proportional to the advertising budgets, because no one wants to throw money away.
Now you need to determine your goals. If you aim to become a leader in the market for a certain type of product, then the budget for advertising should exceed the budget of today’s favorite. But that’s a risk. The bigger the budget, the bigger the risk.
The next step is to build a sales plan. Marketing research allows you to make not only a sales plan, but gives you the opportunity to understand: how to get potential customers, how to build an advertising campaign. It can be search advertising, banner advertising, contextual advertising, in social networks.
The task for the plan is to distribute the budget. But you need to understand what, what sources for choosing products are used by potential customers. It is important to be able to anticipate the manner of their behavior. Depending on this and should be placed anchors to attract customers.
The next item is the organizational plan and expenses. This section should include descriptions of each step of building a business. Thus, to launch an online store, it is necessary to register the company, find premises, conclude contracts with suppliers, hire staff. At this stage, plan and investment costs: for the development and promotion of the site, purchase or repair of equipment, initial consumables, etc. These are the costs at the initial stage.
But the plan should take into account and current costs: direct and indirect.
Direct – logistics (transportation costs), procurement, etc.
Indirect (regardless of the success of the business) – wages, energy costs, consumables, etc.
For a complete picture of the business in the plan is necessarily prescribed and the option of business development.
The financial plan is the core. But the financial plan and the business plan should not be identified. This is only the part where the income and expenditure parts are summarized. Most financial plans are traditionally done in Excel. But there are free and paid programs for planning. They allow for better financial planning of the future business. A financial plan does not require the application of fantasy, unlike marketing. It is a financial analysis according to schemes that include:
- expense and income budgets (shows the profitability of the business);
- Financial flow budget (shows when and how much cash injections will be needed);
- balance sheet budget, showing the change in the company’s assets (growth or reduction);
- financial ratios showing the reliability, stability or riskiness of the business;
- investment performance indicators.
Risk analysis should not be neglected
Risks are unforeseen situations that can prevent the realization of your plans. By prescribing this point, you show that you really see and are able to assess them, and, therefore, you know what to do to prevent or neutralize the impact. It is not bad if it will be calculated what will happen to your financial indicators if a risky situation occurs. This is sensitivity analysis.
Risks can be technological, related to the operation of equipment, organizational and managerial, implying failure to meet the sales plan. Material and technical risks – the risk of working with suppliers. Financial risks – non-payment of customers or related to banks. Economic risks: macro and micro. Environmental risks are also possible.
To write independently or to order
If the independent development of the plan seems too time-consuming, there is always an opportunity to order a business plan of the enterprise with calculations. How much will it cost? Everything depends on the level of the project and the financial capabilities of the customer. The cost of the plan depends on the complexity of the business model, requirements (simple structure or detailed) and the availability of raw data (market research, competitive analysis).
But there is an opportunity to download a business plan, purchase, edit a ready-made business plan. A sample can be found on the Internet. But then there are more risks of rejection of investment.