How to write a business plan: step by step instructions
A business plan is a roadmap that leads a business to success. At the same time, there are not so many entrepreneurs who write it themselves. How to draw up a business plan yourself and what are its main components?
One of the first steps in business planning is to identify the target market and the needs of potential customers. What problems does your product or service solve? Does the product meet customer needs? If you are not sure about the answers to these questions, take a step back and revise the components of the business plan.
Investors pay special attention to the business plan. Therefore, its content largely depends on whether you receive funding for the project or not. “This is the most effective way to communicate about opportunities and turn them into capital,” explains Bob Pavey, partner at Morgenthaler Ventures.
So, how do you write a business plan yourself and what information to include in it? The development of a business plan involves the introduction of several sections: Summary, Company Information, Market Analysis, Organization and Management, Service or Product, Marketing and Sales, Financing, Financial Forecasts, Application.
Business plan components
A resume is often considered the most important part of a business plan. It briefly describes the company and its goals, and explains why the presented business idea will be successful. If you are puzzled by investment attraction, the Resume will act as a hook with which to capture the interest of a potential investor.
The Summary highlights the benefits of the entire business plan, this section is written last, even though this is where the business plan begins.
Depending on the stage of business development, the content of this section will vary.
For existing business:
- Mission, main goals. It is necessary to explain what the business is doing. Amount of information: several sentences, paragraph.
- Company information. Briefly tell about when the company was founded, indicate the names of the founders and their roles in the business, the number of employees, the location of the business.
- Main points of growth. Include company growth metrics, financial metrics, market share. At this point, graphs, diagrams will be appropriate.
- Products / Services. Briefly describe the products or services the company offers.
- Information about the financial position. If you want to receive financing, include in this paragraph any information about investors, the bank.
- Plans for the future. Explain how you want your business to be.
Financial model of the website
Brief Investment Memorandum
In the business plan, we will consider the launch of an Internet portal with complete and up-to-date information about the life of the city. The content published on the portal is of interest to all of its residents aged 20 to 45, which provides constant high traffic and makes the site in demand among advertisers.
Internet advertising is currently in second place in terms of its market share as a whole and demonstrates positive growth dynamics, in contrast to other segments of the advertising market.
The main source of the project's income is the sale of advertising on the site.
List of promotional products:
- Advertising articles
- Banner advertising
- Placing a company in the directory of enterprises
Various partnership and barter programs, online and offline campaigns are used to promote the project among the residents of the city.
The launch of the project and the complete preparation of the media portal will take 35-40 days.
For the further functioning of the project, it is necessary to recruit employees in the following positions: project manager, journalists, editor, sales managers.
Where does a successful business start?
No, not from an idea. And with the correct presentation of this idea - with the justification of the demand for the business, with detailed calculations of costs, with plans for making a profit. Without a good business plan, you cannot get a real picture of the future work of the enterprise and not get investments.
The business plan may differ depending on the purpose. It can be investment, credit, grant or general plan of the enterprise. In the first three types, the emphasis should be on benefits - for the investor (profit), the bank (quick loan repayment), the state (social benefits from the operation of the enterprise). When drafting them, you can embellish reality to make the plan look more attractive.
A standard business plan is written for themselves before starting a business. He shows the idea of creating an enterprise, describes business processes and mechanisms for their implementation. There is no need to hide or "decorate" anything in it - the more carefully you calculate everything, the fewer surprises you will receive in the process of work.
How to start planning
Step Define Purpose
Who are you writing the plan for - yourself or your investors? When the goal of the plan is to show the investment attractiveness of the project, you can not work out the organizational structure so carefully, but focus on the financial, marketing plan and show the benefits. You can make your presentation more emotional.
If a business plan is an internal document, this does not mean that it should be taken less seriously. On the contrary, the calculations for yourself should be the most reliable. You are risking your dream and your money.
Step Conduct general SWOT analysis
Identify Strengths, Weakness, Opportunities, Threats. With its help, you will be able to assess the internal and external resources of the company, understand what can get in the way of achieving the goal and calculate how to minimize risks. It is always best to start with a SWOT analysis: the results will help to objectively draw up each section of the plan.
Step Develop Plan Structure
- introduction (summary);
- description of goods and services;
- marketing plan;
- production plan ;
- organizational plan;
- financial plan (budget);
- results and prospects (conclusion).
A well-written business plan is the basis for starting and supporting your business. The article describes in detail the sections of the business plan, provides instructions for writing it on its own, provides download examples and guidelines.
The business plan is aimed at regulating the company's activities in the short and long term (3-5 years) perspectives. A business plan is a strategic and tactical basis for production, marketing, management, budget allocation.
The scope and structure of a business plan is determined by the goals of its writing and the scope of the business. So, to open a factory, you need to prescribe the production process step by step: starting from the place of storage of raw materials and ending with the methods of delivery of finished products to the customer. For the construction of a shop for rent, it is enough to provide cost estimates and payback periods. The business plan for the lender will be different from the business plan presented to the potential investor, etc. (see Features of drawing up business plans of different types).
A business plan should be concise, informative, easy to use, truthful and realistic. It is not worth describing the bright prospects of capturing the entire Russian market in the coming year for a regional startup.
There are no strict rules for writing a business plan. However, there is a certain structure that should be followed.
Business plan structure
1. Title page
The title page states the name of the business plan, which should reflect its main idea, the address of the company, the contacts of the manager and the person responsible for negotiations, the date of the document.
2. Introduction (abstract)
A brief description of the goals and objectives of the business plan and a list of persons to whom it is addressed. It is also desirable to formulate the relevance of the implementation of this project.
3. Privacy Memorandum
To create a business plan yourself, you need a project template. This template will serve as an example and will help you choose the right path when drawing up a document of paramount importance for any entrepreneur. No company will make a stable profit in a market economy without a well-prepared business plan.
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Success in business is the result of detailed planning of its development. A business plan is a special document that helps to organize competent business management, increase profits and ensure a return on investment. If you want to start your own business, you must have a business plan with you. It indicates the ultimate goal of your activity, the long road to this goal and every stop along the way.
Business plan functions
The functions of a business plan can be varied. This is not just a one-time document that is enough to compose, study and put on the back burner. This is your “reference book” for the near future and it should remain so until the businessman reaches his goals. A business plan may be required:
- To develop a general strategy for the company. Helps to determine the direction of its activities.
- To attract credit funds for business development.
- To control and evaluate the selected direction.
- To attract partners who will make their investment contribution to the common cause.
A ready-made business plan allows you to evaluate the effectiveness of the solutions used and helps you find an unambiguous answer to the question "is it worth it?" Is it worth investing in this venture? Is it worth starting a business in this area? Is it worth developing the company in this direction?
Business plan goals
Business plans are classified into two types:
- Those that are created for investors.
- Those that are created "for themselves".
In the first case, the document must be at a "high level", therefore your task is not only to create a beautiful picture of the future business, but also to convince potential investors of its reality (people who will risk their own funds).