Small Business Business Plan
The starting point of a business is always the idea, the initial impulse and the desire to engage in activities that generate income. The question of which direction to choose, which business will go better, is best decided before opening your own individual entrepreneur, LLC or other legal status of the company.
Enterprising people are not inclined to develop strategies on paper, those who are familiar with drawing up the right business plan can be counted on one hand. And in vain, after all, it is this financial and economic tool that helps to calculate possible mistakes in advance, before the start of active activity.
Most people ignore the importance of developing an action plan, considering it unnecessary. However, one has to deal with situations when the owner of his own business is forced to prepare a business plan. On an urgent basis, a "plan" is thrown with ephemeral, far from reality numbers, but attractive for investors or, for example, for the credit department of a bank.
An entrepreneur who has decided to present his miracle project in this way will, at best, have a simple refusal, at worst - a damaged reputation. You shouldn't underestimate the potential of a real, well-thought-out business plan. In fact, it is needed not for investors, but for the entrepreneur himself, so as not to burn out in the very first months from the start of the business.
Procedure for developing a business plan for a small business
If you put together all the goals for which this tool is created, then the plan is based on strategic planning. Yes, it is desirable, even mandatory when opening a case. On the other hand, planning in the economy is the key moment and the key to success.
Therefore, business plans are developed not only by beginners, but also by firms that have worked for more than one year. For what? To stay afloat. As a rule, in large reputable companies, a whole department is engaged in planning. Having ready-made figures of the company's work over the past years, it is much easier to analyze and make plans than for pioneers.
So, let's try to explain where to start and how to end. Let's agree that the business plan is used as a business concept. This means that you need to work out the following key points:
- - why the business is being created;
- - what is the result of expectations;
- - management potential;
- - flexibility of the model;
- - exposure to external factors;
- - financial stability;
- - competitiveness.
Each business plan in one form or another should contain the following sections:
- Cover Page
- Confidentiality Memorandum
- Executive Summary
- Investment Plan
- Marketing plan
- Production plan
- Organizational plan
- Financial plan
- Risk analysis
All of them are important, regardless of their size and volume, but different investors (banks, leasing companies, individuals) may pay special attention to one section, depending on what goals they pursue and in what they understand the topic more. At the same time, the project manager who draws up the document must understand well in each section written and be ready to answer all the investor's questions that arise.
The sequence of drawing up a business plan is usually as follows:
- The investment part of the business plan is written, where the amounts and terms of construction are written out
- is the marketing part of the business plan, the main meaning of which is the idea that the products the project is needed and needed so much that the opening of a new production, a new store and a new service point is required. Sales of goods or services and revenues are projected.
- a production plan is written, which indicates the volume of production, the cost of production, as well as technological processes for the production and sale of products, the provision of services.
- an organizational plan is written, which indicates the managers and initiators of the project in terms of their education and experience in the direction in which the project is being implemented
- a financial plan is written, where the sources of financing the project and the conditions for raising funds are written , as well as calculations of the project payback, break-even point, NPV and other indicators of the project's financial attractiveness.
- a section is written where the risks of the project are described and the influence of factors on the payback of the project is calculated.
- and only at the end is a summary of the project written, which briefly describes all the important points of the project.
ABC and XYZ analysis in the optimization of the company's assortment
Definition of the concept of "ABC-analysis" The Italian economist Vilfredo Pareto, in the course of his scientific activity, deduced a rule that has become a classic, which is formulated as follows: “20% of efforts give 80%.
NPV (Net Present Value)
NPV (abbreviation, in English - Net Present Value), in Russian this indicator has several name variations, among them: net present value (abbreviated NPV) is the most common name.
Project Internal Rate of Return (IRR)
Observing the order of the sections of the business plan is extremely important for a better understanding of the entire process of starting a business (at least on paper), and it should not be changed in any case, since all stages of the business plan are a logical continuation of each other. friend. In this article you can find a description of the main stages that must be present in every description of a business project. Unfortunately, most entrepreneurs cannot afford to order a business plan now (a well-designed business plan, drawn up to be presented to investors, costs about 80-100 thousand rubles).
Therefore, many businessmen try to draw up a business plan on their own, but having only a general idea of how it is done, they usually fail at the initial stage. To help these entrepreneurs, as well as those who have decided to make a living from this business planning, I decided to share my best practices in this area, adding to them the advice of experts and analysts in the field of business planning. I started this series of articles with an article on how to write a business plan cover page. Today - the second point - the description of the enterprise. back to contents ↑
What can and should be written about your future (or existing) company?
The first step is to warn you that you only need to write reliable information. Otherwise, getting investments (if the business plan is aimed at this), you will not see how your ears are. Rest assured, potential investors will examine your creation inside and out for any flaws. And if there is a distortion of the factual data, then at best you will simply be denied financial assistance, at worst - they will make this case public, after which you will not even be given a ruble in other sources.
The description of an enterprise in a business plan cannot be limited to a brief description of the company. It is necessary to present the information in as much detail as possible. Firstly, it will make it easier for the investor to verify your information, secondly, it will speed up the process of making a decision about investing, thirdly, it will lay some kind of "foundation" of trust (of course, provided that everything is confirmed), and, finally , will help you better understand the capabilities of your company.
Therefore, you need to describe not only the company itself - the name, legal and actual address, information about the owner, the number of personnel, etc., but also the nature of the services it provides, a description of the products it produces or sells. It should be noted right away that the points of the business plan of an already operating company and the one that is only planned to be created may be different. back to contents ↑
Information about the owners of the company
In this paragraph, it is necessary to list all persons related to the management of the company, indicate the share of ownership of each of them in the overall package, the position held, and even the duties performed. Everything is simple, nothing more.
If your organization has existed for some time, start the description of the company from the beginning:
- When and by whom exactly the company was founded
- Initial goals and scope companies, by the way, this may not coincide at all with the current state of affairs. So, for example, in the description of the activities of the enterprise of the company "Tander", which owns the stores "Magnit", it is said that at its foundation it was a company selling household chemicals. Now, it is an internationally renowned retail retailer.
- Today's line of business
- What success has the company achieved in its activities, how much has the client base expanded, whether new branches have been opened - write everything that can impress the investor - received certificates, won tenders , you can even include reviews of your company in the media.
This description should include all previous loans (if any), and detailed information about them - where, when, by whom, and under what conditions they were issued. You should also indicate exactly what amount is required for the implementation of the proposed project, on what conditions, at what interest rate you are asking for a loan, from what month the business plan begins, and in what parts you will return the borrowed funds.
Business planning is an integral part of building your own business. Every entrepreneur has come across business plans. They solve a number of important tasks, help to study the market, assess risks and opportunities. Only a well-written business plan helps to understand how successful the future enterprise will be.
What is a business plan and what is it for?
A business plan is a document containing information about the goals of a business, its relevance, relevance, marketing and financial components. This is a detailed design of a future enterprise or forecasting the development of an existing company.
The main task of such a document is informational content. It carries all the information an entrepreneur needs. In addition, such documents are important for investors as well. Business plans help them decide whether to invest in a project or not.
Business planning solves the following tasks:
- Gives information about the market for a specific product or service.
- Helps the entrepreneur understand how much this product or service will be in demand.
- By what methods is he going to promote it.
- What profit is expected from this.
- How cost effective the idea would be.
- How the market will react.
- How difficult it will be to beat the competition.
- What will be the initial investment, monthly investment and income.
- How quickly the company will pay for itself.
- What is the development strategy of the future enterprise.
There are several types of business planning:
- For investors. Needed to attract investment in the project.
- Customized. Created for the individual entrepreneur. Their tasks are to study the idea, its relevance, market, competition and other features important for the implementation of the project.
- For companies. Determine the development strategy of an already operating enterprise for a specific period of time - for 1 year, 2 years, 5 years.
General document requirements
A business plan is an official document, so it must be well written.
General document requirements:
When starting any activity, it is important to have a clear idea of where to start and where to come. There are business plans for this, and you need to know how to draw it up correctly.
Without clear planning, it is difficult, and sometimes impossible, to consistently move towards the intended result.
Goals and objectives of the business plan
A business plan is an integral part of any enterprise aimed at success. The result of the future company depends on the quality of its preparation. Business planning is an important stage in the development of a future enterprise and contains certain goals and objectives.
- determine whether the project is worth financing;
- provide full information about the project to the investor or bank.
- Outline the goals of the future company, develop a strategy and tactics.
- Choose a line of business.
- Analyze all costs.
- Plan the necessary marketing activities.
- Consider possible risks.
- Make a budget in relation to the current financial situation.
Small Business Compilation Guidelines
A business plan is a document that gives a detailed view of the project, and allows you to answer the question of whether it is worth funding. The project can be financed by either the lender or the investor. Since the goals of these individuals are different, then the methods of evaluating a business project are also different. Therefore, before drawing up a project, you must immediately determine who it will be provided to.
In any case, the business plan must be well-designed and readable. Document size is 40 pages on average. With more content, it is optimal to put some documents into annexes, and with less content, it will be believed that the project was not drawn up properly.
If complex terms are used in the description of the organization, then a glossary of terms should be compiled at the end of the document.
Focusing on the target market and meeting the needs of consumers is important in drawing up a business project. At the same time, it should be noted what benefit the consumer will receive by using a product or service from a given enterprise in comparison with a competitive one.