Complete and professional business plan: how to do it
Knowing how to plan is a necessary virtue of any businesswoman or entrepreneur. Planning the company’s steps helps to focus efforts to finalize a project without wasting resources and time on unattainable ambitions. Intuition is not enough to plan, of course: we also need a map that shows us if the direction we want to take is the right one. In short, a business plan is needed. Here we explain what it is and how to create one that is clear and well structured and that helps to demonstrate the solidity of your business idea to any partners or financiers.
What is a business plan?
The business plan is a document that defines the objectives of a business project, the financial forecasts, and the strategies to be implemented to ensure that this project goes through. It is, therefore, an investigative tool that helps you understand if an idea is standing or not.
More precisely, the business plan has two functions, one towards the inside and one towards the outside of the company:
- It helps entrepreneurs and entrepreneurs to understand if a business idea is viable and identifies strengths and weaknesses. And it provides a guide to moving by following a very specific strategy.
- The company uses it to present its business idea to lenders, sponsors, new partners, or anyone wishing to invest in the project and (first) study it to verify its feasibility.
In short, starting any business project is the zero step (especially if we are looking for funding). And it is also the most important, as it will show us, like a crystal ball, that it is the future. But to do so, it must be well structured.
Business Plan: why it is useful
How to make a business plan
There is no universal model since its structure and complexity depend not only on the type of business but also on the purpose for which we are doing it. Nevertheless, we may need to create a business plan because, for example:
- We are a start-up looking for financiers, and we have to convince them that our idea stands up;
- We want to expand our company, and to do so, we need to raise capital from investors, so the plan must show the company’s low-risk returns;
- We want to present a proposal to access public funding, and we must emphasize how the company meets the necessary criteria to access it;
- We must understand how to manage our business, identify the objectives, and focus on the processes to achieve them.
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The structure of the business plan and its sections
The business plan usually consists of three parts:
- A descriptive part in which the company, its history, the project in mind, and the reference market are told.
- A more detailed central part shows what the company is “special” in and presents the business proposal.
- The final part asks the reader (if you are addressing investors) what you need.
Business plan: how it is structured
Here, in more detail, are the sections you will have to work on (obviously, they must be customized according to the objective of your plan).
Summary
Usually, the summary takes up one page, a maximum of two. The summary must include:
- Brief information about the company, its business, and the management team.
- Your proposal (briefly explaining why it will be successful and what the benefits will be, any risks, and how to minimize them).
- A clear description of what the reader requires (for example, how much you want him to invest and what his profit will be).
To support the information given, you can include some significant numerical data.
Background
Begin your business plan by giving your readers essential details to understand your business and how it fits into the market. So clearly answer questions like: what is it? What does he do? What kind of product/service does it offer? How was it created, and when and why? From who? Has it been successful? Why did he have it? Or if not, why didn’t he have it?
Reference market
Provide all the information you need to understand your target market, audience, and market trends you want to embrace. So, in more detail:
- Explain how your offer is different, why customers choose you, and what benefits you offer;
- Estimate the size of your market.
- List the main competitors.
- Explain who your target is and who your customers are.
- Talk about distribution.
- Illustrate the technology used.
- Explain in detail what your pricing strategy is.
- Expose your competitive advantages (price, product/service quality, technological superiority, or distribution…).
- Illustrate market segmentation (i.e., what the market is made up of and how your company fits into this picture).
- Answer the question: How do you distinguish yourself from your competitors?
- Mention the factors that reduce the risk of potential competitors entering your market.
Management
Explain the team’s experience and management skills in detail. Provide short biographies and explain what role each person plays within the company.
Proposal
Here you explain what your proposal is. More in detail:
- What is your goal – it must be clear, achievable, and measurable
- How will you achieve it?
- How much time and money will be invested to achieve it?
Then tell your readers what returns they can expect if they invest in your project.
Forecast
In this section, you must justify the costs you will incur and hypothesize the sales you expect to make (obviously, in the latter case, it is an estimate).
Then, difficult but fundamental, it is to estimate the impact that a possible increase in costs, or a decrease in sales, could have on the business. It is also important to include this to show that you have the situation under control and that you have a plan B in place: it will reassure potential investors and partners.
Financial information
Show (attaching supporting data and documentation) the current and past sales (also clarify the reason for any discontinuity), the company’s profits and losses, its balance sheet, and the economic forecasts. Explain your financial position, how it has evolved, and, if any, what funding avenues exist. It is also important to state if there are any legal procedures in progress and, if there are none, to specify them.
Now that we have given you an idea of the structure, we leave you just a few tips for building an excellent business plan.
For more information you should visit business plan consultants.
Our tips for a well-done business plan
Here are some tips for presenting an easy-to-consult, professional and compelling plan.
Start with a ladder to organize everything you want to include in the plan in order. This way, you can structure the contents with order and logic. Avoid starting from pre-set business plan templates: every company is different, and every business project needs to be told in a personal way. Instead, if you don’t know where to start, choose a model but customize it according to your needs.
The eye also wants its part. This document is usually intended for those who have to trust you, so you must present yourself well. So, take care of the presentation, the layout, the text, and the graphics. Create a neat and easy-to-read document. For example, if it exceeds 4-5 pages, add an index to help the reader find their way around, curate the text and make it easily readable (so choose the typefaces and their size carefully). Pictures and charts can help you understand your data better, so use them.
Clarity and synthesis. The document must clearly explain your business idea with simplicity, without unnecessary turns of words. If it lacks clarity, it may miss its target.
A flawless opening summary. The summary is a key section, as investors often stop at that. For this, it must be captivating and convincing.
Data, evidence, numbers, and statistics support the claims. Therefore, data, facts, and numbers must support all your statements. If you fail to add details confirming what you write in the plan, you risk making your project seem impractical and uncertain.
Also, attach the necessary documentation to deepen. So, for example:
- CV of the team;
- product and production process data sheets;
- list of equipment you own;
- copies of patents, copyright proofs, or trademark registrations;
- results of market surveys and sector studies;
- detailed accounting data;
- copies of leases.
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