How to draw up a business plan correctly (and does your company need it)
How to correctly develop it, and will be discussed in our article.
What should be reflected in this section?
This paragraph should disclose the essence of the following key business points:
- organizational structure of the company;
- staffing table, number of employees and their working day;
- legal support of the project;
- the schedule of its implementation.
Company structure and management team
Regardless of the type, the organizational structure must necessarily perform a number of basic functions, namely:
- to ensure normal interaction and fruitful cooperation between the project participants;
- to organize such conditions under which it becomes possible to stable operation and release of products that meet all quality requirements; <
- to push the enterprise towards further positive growth and development.
This structure cannot be called something frozen, on the contrary, it is characterized by constant improvement in the light of changing market conditions. Therefore, it varies depending on the following factors:
- the scale of the enterprise (small, medium, large);
- production and industry features (production of products, services, sales transactions);
- the nature of production, which, in turn, is mass, single or serial;
- the scope of the company, in which market the entrepreneurial activity is carried out: local, national or external;
- level mechanization and automation of managerial work;
- employee qualifications.
When drafting it, the following principles should be taken into account:
There are two basic rules to keep in mind when designing it:
- the number of management levels should be minimal;
- commands should be executed along the shortest chain.
A management team is a complex socio-economic category that provides a connection between the team itself, the team, the owner and the state in relation to the socio-economic development of the enterprise.
Requirements for a business plan and recommendations for its preparation
developed by the Federal Fund for Small Business Support
These requirements have been prepared by the FFFMP in order to help small businesses when applying for funding. Each project has its own elements of risk - production, sales, financial or legal. The FFFMP should assess the potential risks before committing to committing funds to a project and understand how these risks can be mitigated and / or shared with other stakeholders.
A business plan is both a tool for attracting investment and the basis for intra-company planning. The sequence of drawing up and the principles of detailing a business plan for different companies and projects do not coincide. When drawing up a business plan, it must be borne in mind that it is always an iterative process, which implies making changes based on newly obtained information and applying various scenarios. At the same time, there is an internal logic of the structure of a business plan and generally accepted principles for its development.
The recommended structure of a business plan with brief guidelines for its development is given below. The proposed scheme for drawing up a business plan is optional;
The Foundation will consider business plans written in a different form (subject to coverage of all key issues). The form of presenting a business plan will largely depend on those issues that are most significant for the enterprise and the need to attract funds from foreign companies, funds and other creditors; in the latter case, compliance with generally accepted requirements in international business practice is required. Following the requirements of the scenario approach, it makes sense to develop several alternative forecasts of changes in the value of the initial data corresponding to the pessimistic and optimistic variants of the project development.
It is also recommended to draw up the financial part of business plans using the Project Expert software by PRO-INVEST CONSULTING, or Alt-Invest packages by Alt, ANALITIK - by INEK. (It should be noted that the use of these or other software products in itself does not yet guarantee the preparation of a business plan at a high-quality level, and FPPMP reserves the right to request additional information or insist on revision of the submitted documents).
Business plan structure
1. OVERVIEW SECTION (SUMMARY) 2. DESCRIPTION OF THE ENTERPRISE 3. DESCRIPTION OF PRODUCTS (SERVICES) 4. ANALYSIS OF THE MARKET 5. PRODUCTION PLAN 6. PLAN OF SALES 7. FINANCIAL PLAN 8. ANALYSIS OF THE SENSITIVITY OF THE PROJECT 9. ENVIRONMENTAL INFORMATION
OVERVIEW SECTION (SUMMARY)
Before starting to create a business plan, you need to answer the question of what goals you plan to implement with its help. The content of the document and the methods of presenting information directly depend on this. There are several standards for drawing up a business plan aimed at raising outside funds. Which one to choose depends on the policy of the investment company with which the entrepreneur seeking a sponsor is going to cooperate.
Before starting to develop your strategy, it should be borne in mind that a beginner who does not have either production facilities or his own money will hardly be able to attract significant funds to start a business from scratch, so buying a franchise will be the most promising direction for him ...
A large number of materials are devoted to this direction, therefore this article examines the question of how to interest and attract an investor, what key positions, and sections should be highlighted in the document proposed for consideration by a potential partner.
Main objectives of the business plan
A business plan for an investor is, first of all, a marketing tool. Its structure and content should provide a person who gets acquainted with it the opportunity to quickly understand the essence of the project and the main criteria for planned development. The main task of such a document is to convince a potential investor that the business has what it needs, namely two characteristics:
- low risks of possible loss of money;
- high profitability.
The main thing that interests an investor is how much profit the invested funds should give.
Business plan structure
Before you start writing a business plan, you should carefully think over its structure, familiarize yourself with examples and samples presented in large numbers on our website. It should be remembered that they are all advisory in nature, and the document created as a result should reflect the features of the project being developed. The main body of a business plan for investors should be 15-20 pages. Additional information should be provided in the form of annexes, which may be presented as a separate document. There are a number of structural elements that you cannot do without.
Why do you need a business plan?
Many entrepreneurs have a question about a business plan even before starting a project. Moreover, if the product is actually absent, with a 100% probability there is no real need to write it.
We are often contacted by aspiring entrepreneurs who want to start a new business from scratch: a beauty salon, manufacturing, rental of special equipment, grocery stores, and so on. One example: a potential client wanted to start a timber house construction company. The only asset he had was the contact of an acquaintance who has been building them all his life.
The main argument in favor of this business was information about a possible restriction on the export of unprocessed timber from the territory of the Russian Federation, which, in the opinion of this entrepreneur, should have helped reduce competition in the market. The rest of the background information was completely missing.
I immediately had a question, why would he need a business plan in this case?
Before you start writing it, you must:
- Fully understand the product, market, competitors.
- Communicate with suppliers and potential customers, assess the prospects for entering the market.
- Start a business at the artisan level, without a structured hierarchy. It is necessary to understand its real functioning and all the processes inside.
Things to do before writing a business plan
The main task of a business plan is to attract financial resources to scale the company or launch new products on the market. At this stage, when the business is already formed, you can try to write a business plan. But if the company lacks structure, then when scaling up, the business will not be able to handle all customers. Therefore, it is desirable to form it.
- Formulate a unique selling proposition for a product to stand out from competitors, describe it in detail.
- Describe in writing all the processes in the company, build a hierarchy in the executive block.
- Create a marketing and sales department, close the issue with attracting and processing leads.
Only after that writing a business plan is a really topical issue.
Sometimes a client is overly optimistic about his project. For example, once we needed to develop a business plan to open a multifunctional roadside complex. There was no collateral, except for the land plot on which it was planned to build the facility. Therefore, the proposed conditions for a bank loan were not the most loyal.
In the course of the calculation, we found that the rate on a bank loan "eats up" all the profit on the project. The client also did not have the opportunity to increase the share of its own funds in financing the project to reduce the interest rate. Therefore, we decided to abandon its implementation in this form.