Business plan 

How to create the right business plan yourself

Business is a market in which you have the dual role of both seller and buyer. Without a meaningful, clearly drawn up plan, it is very easy to get lost here and be left without funds and without acquisitions. The economies of the countries of the post-Soviet space are still in limbo, when the old is gone and the new is not yet there. Newly-minted businessmen very often have little idea of ​​where they are going to get involved and what they will encounter there.

Even experienced entrepreneurs sometimes reach a dead end from frequent changes in market conditions, which force them to change development strategies, calculating the smallest steps. Modern conditions for attracting capital, both foreign and domestic, require the entrepreneur to be able to draw up and defend a business plan. And it must be drawn up taking into account international requirements.

In the West, it has long become the norm: not to start a business without a detailed calculation of all the nuances in order to minimize the risk of failure. In our country, this is also gradually becoming the rule.

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Why do you need a business plan?

A business plan is a document where the future of the company is modeled. It contains information about the product or service that is going to be offered to the consumer, its cost, sales options, the need for personnel, equipment, a market analysis, probable risks and problems that may arise, and ways to solve them. This is a program and a guide to action.

Depending on the purpose for which the document is prepared, it can be divided into the following types:

  • interior;
  • external.

The first of them contains accurate data about the state of the company and is adjusted depending on how things are going in the enterprise and in the market as a whole. In other words, it serves for the operational management of the company.

The second is being prepared for presentation to possible external investors, banks, and future partners. This is a kind of business card of the enterprise.

A business plan will be required:

  • To solve internal problems and outline the company's growth prospects. It describes both the strengths and reserves of the enterprise, as well as existing risks, and makes it possible to objectively assess the situation, make timely decisions and adjust activities.
  • An external business plan is presented to third parties or organizations. Its goal is to present the company in the most favorable perspective to attract investment or to obtain a bank loan and other purposes.

The best option when doing business is to draw up both types of documents. The external one is prepared after the internal one, since the issues raised in the internal use document greatly simplify the preparation of the external one and contain answers to many questions that an investor may have when studying the document. This is especially true for financial indicators.

An internal business plan will also answer the question of whether you need additional external investments, or whether the company is able to accumulate its resources and do without them, so as not to give away an impressive part of the profit in the future.

As a management document, a business plan is aimed at solving the following problems:

  • Determine prospects for business development.
  • Search for a new market.
  • Estimate the company's expenses.
  • Define short-term and long-term goals and future strategy.
  • Analyze staffing and its functionality.
  • Assess the financial position of the company.
  • To provide an opportunity to look at existing problems that hinder further development from a different angle.

In what cases is its preparation mandatory?

There is no regulatory document that can oblige a businessman to draw up a business plan. Therefore, its preparation is voluntary and depends on the owner of the company or the person managing the company. But, if we take into account the number of tasks that its development contributes to solving, then this document can provide good competitive advantages and open promising directions for further development.

There are cases when its preparation is simply necessary:

  • Without a competent document drawn up according to the rules, you will not be able to receive financial assistance from either an investor or a bank. Anyone who invests personal money in someone else's business must be confident that they will be able to return it while making a profit.
  • When creating a new business, it is necessary to calculate all the nuances so as not to end up with nothing.
  • If you want to expand your activities, you also need to make a detailed calculation, as a result of which it will be clear whether it is worth investing money in it, or whether the niche is tightly occupied.

It is worth approaching the drafting of the document responsibly and carefully, because very often an entrepreneur is refused investment not because his project is not interesting to a potential investor, but because of mistakes made in the business plan and inconsistency with the generally accepted structure.

The methodology for drawing up the document is presented in the following video:

There is no approved document structure, but there are general rules that are advised to be followed during preparation to avoid misunderstandings among third parties, especially if you are going to present the document at the international level.

The document, suitable for any business, contains the following sections:

Title page

This is a kind of face of the document. Its design style can either attract an investor or repel it. It will be better if you do it on letterhead with the company logo.

This section should contain the following information: name, legal and electronic address, telephone numbers, contact information. The second sheet should contain the contents of the business plan indicating the pages.

Introductory part

It briefly describes the idea, projected financial indicators, the required amount of funds and the period during which the investment will pay off.

Company Description

Here you should describe:

  • company history;
  • its form of ownership;
  • set goals;
  • the type of business it is engaged in (trade, manufacturing, services, etc.);
  • the main product or service offered, its competitiveness;
  • the business environment and the reasons why the company is engaged in this particular business;
  • reveal the organizational structure;
  • indicate the company's past and present achievements and problems;
  • what actions are being taken for technical development;
  • accounting methods used, whether the company is insured;
  • its location, why it was decided to locate the enterprise there, and whether it is located in its own premises or rented ones.

Description of services or products

This section provides a description of the product, its advantages, unique qualities, and consumer ability. Copyrights and patents, if any, are also reflected here.

Market analysis

The market in which the product will be sold, the competitive environment is described, and the consumer sector is assessed. Considering that a potential investor or lender is not familiar with the field of activity in question, he needs to be shown the most complete picture, describe the trends and prospects of the area. Describe which consumer the project is intended for, indicating their average income, geographic and demographic location.

The final part of the section should describe possible changes that could affect the business in one direction or another.

Marketing plan

The results of a study of the product's competitiveness should be presented here. Methods of pricing and stimulating sales growth that are planned to be used are also given.

Production plan

One of the most important sections, which contains data on the necessary equipment, both what is available and what is missing. The main production indicators, fixed and variable costs, depreciation, and planned sales volumes are considered.

It also describes the method by which it is planned to establish production of products, provision of services and other activities.

Human factor

This section provides the organizational structure of the company, the general composition of the personnel - both managers and specialists, workers.

The remuneration system and methods of stimulating personnel are also described.

Sources of financing and their volumes

Here you should find answers to questions about the amount of funds that need to be spent on the implementation of the project, sources of financing (loans, partners, issue of shares, own funds), timing of receipt and return of attracted capital, as well as the level of income on them.

This section must be accompanied by calculations that give an idea of ​​the payback period for investments.

Financial plan and risk assessment

At this stage, production costs and sales revenue are forecast, profitability and profit are calculated. The average forecast period is from 3 to 5 years.

This section also describes possible risks, ways to reduce and prevent them.

Applications

At the end of the business plan, copies of existing contracts, illustrations, reports, graphs, tables, diagrams that could not be placed in the appropriate sections due to their large volume, and similar documents are attached.

Decor

Ready document must have a presentable appearance. This is an advertising product that gives an idea of ​​your business and you personally. The professionalism of the company will be judged, among other things, by the presented business plan. But this does not mean at all that it should be large in volume, be too complex and be in an expensive binding. The main features of a business plan should be simplicity, clarity, and functionality.

It should be compiled in such a way that you can easily find the necessary information, section, table.

Particular attention should be paid to drawing up graphs, diagrams and tables that simplify the perception of information and make it more complete.

Given that this document contains a large amount of confidential information, only as many copies as may be needed should be published and not allowed to fall into the hands of third parties. There is a practice when, at the first meeting with investors, they are offered a brief overview of the plan, and only if interest in the project has been shown, the full version is provided.