How to write a business plan? This question is often asked by most people thinking of starting their own business, starting a startup, or finding an investor. Everyone understands that the answer to the question “how to write a business plan competently and correctly?” is an integral part of a successful company and enterprise. A completed business plan should present a complete picture of your business activities, from analysis to development prospects. Regardless of the business idea, whether it’s a store or a service that allows you to write my essay for me free, for every purpose a necessary business plan.
Outstanding management and marketing personalities such as Brian Tracy, Stephen Covey, John Maxwell, and many others believe that most people give birth to dozens of ideas every day. However, not every idea grows into a successful business idea. For a business idea to become feasible, “how do I write a business plan competently?” must be answered. So how does one write a business plan? It is possible to write a business plan correctly if you study each section of it in detail:
- The introductory part or summary of the project;
- A description of products and services;
- Market analysis and marketing strategy;
- Production plan;
- Organizational plan;
- Financial plan and budgeting;
- Expected results, risk assessment, and development prospects.
Below you will find information on how to write a business plan and step-by-step instructions on what data should be specified in the sections.
How to create a business plan yourself, and what is needed?
What is a SWOT analysis, and how is it used in a business plan? SWOT analysis is needed to assess the internal and external resources of the company, making an objective picture for the business plan and consists of the following components:
- Strengths – strengths of the product or service, for example, may include low cost of production, high professionalism of employees, an innovative component of the product, attractive product packaging or high level of service of the company, etc.
- Weakness – weaknesses, it is possible to refer to such factors as absence of own trading premises, low brand recognition among potential buyers, etc.
- Opportunities – opportunities in business imply such factors as introducing new materials and technologies for the production of the company’s product, obtaining additional funding for the project, etc.
- Threats – Threats to business, which may be such criteria as the economic and political situation in the country or region, the specific mentality of consumers, the level of technology development in the territory of business, etc.
How to make a business plan more informative?
Before filling out the sections in detail, gather as much additional information on the topic of your future project as possible. You need to do industry analysis, explore ways to promote your products/services and understand which companies are your competitors in the market. Also, estimate the number of tax deductions for your company and resources of the future project, such as money, intellectual, time, personnel, and so on.
It will help you understand how to write a business plan effectively and not have to look for material for sections of it in passing. You will save a considerable amount of time by getting good results.
How to make a business plan yourself, step by step instructions
Introductory Part of the Project Summary
In the water part of the project brief, you need to make a positive impression on investors and give a general description of the business plan as a whole, so this section should address the following points:
- the company’s line of business;
- The target markets and the company’s place on them;
- profitability and payback period;
- personnel and responsible persons;
- planned quantitative and qualitative indicators as a result of work by periods.
The summary should substantiate what investors will get if the project is successful and the chances of losing capital or part of it in case of unfavorable development of events. It is written at the very end when the main body of the business plan has already been written.
Description of Products and Services
In this section, you have to describe the products and services you are planning to understand the portrait of your target audience or client. You can do this by taking photos and videos of your line of products and services. Analyze the market for similar products or services in your target market and describe your pricing model. Try to answer the question, “can you compete with existing companies in your segment?” After this analysis, you will have a clear idea of who you are producing your products for and an understanding of your product features.
Market Analysis and Marketing Strategy
To understand what environment your company will operate in and what competitors can be identified in your environment, you need to write a marketing strategy as accurately as possible. The system includes an analysis of the market environment, competitors, and your promotion strategy in the current environment to the end consumer. The study of promotion methods and tools will allow you to make a qualified business plan and promote your products in the market. After all of this, be sure to make a rough sales plan by quarter to understand how much revenue and net profit your business could potentially generate.
You can skip this section if your company will provide services or sell goods, i.e., trade. Suppose your company is planning to engage in manufacturing. In that case, you need to understand how much production capacity you will need to implement the production and in what sequence the equipment will be implemented and prepared for operation. Evaluate the expected dynamics of increasing production over time and the necessary materials and raw materials logistics. Map out your production process to see a picture of your entire operation.
This section should reflect your actions on the business organization, broken down into specific steps with a timeline for the implementation of each stage, the person responsible, and the expected results.
Financial Plan or Budgeting
In this part of the business plan, you make detailed estimates and plan the company’s budget. Usually, a company has one-time costs and recurring costs. One-time costs can include buying equipment or space, advertising signage, etc. Recurring costs can include consumables, raw materials, rent, utilities, salaries, and the purchase of goods.
Expected Results, Risk Assessment, and Development Prospects.
You can consider several variants of events concerning your business and assess risks and development prospects. Based on your expected financial performance, analyze your business plan and evaluate your project. If you were an investor and offered to invest in such a venture based on this business plan, would you agree?
What an investor looks for when selecting a project
First, financial performance is important to commercial investors. For small business projects, these are payback period, return on investment, return on sales, and breakeven rate. While for large business projects, it is necessary to add such indicators as NPV (net present value), IRR (internal rate of return), PI (return on investment index), risk level, profitability, and turnover of assets. For government projects, it is important to talk about the social importance of the business, the benefits of the products, the impact on the development of target industries and regions, and so on.
Second, an investment plan is important to the investor, which considers the following questions:
- how much money is needed to implement the project?
- How much money does the author of the project invest?
- How much money does the investor invest?
- Is a loan from the bank necessary?
Thirdly, an investor pays attention to the project’s cash flow (Cash Flow), or CDF, which is the final consolidated report of the business plan and shows the movement of all the company’s cash flows for all activities for each period. It is a document that indicates whether there are cash gaps, how much money each project participant receives, and how the company’s operational, investment, and financial activities affect its finances.