Good Business Plan. How to Cope with It?
As you know, any enterprise or project starts with a business idea. However, it does not have much value since most people generate dozens of ideas every day. This is indicated by many well-known entrepreneurs, prominent people in the sphere of HRM training, leadership and planning. They are Brian Tracy, Stephen Covey, John Maxwell, Tony Robbins and others. Surely, you faced a situation when the idea was born in your head, but you did not have enough time and efforts to bring it into life, and most importantly, you did not know where to start.
In this article, we will analyze in detail what is a business plan and how to make it. This article will be useful for both beginners and current entrepreneurs, because, as you know, any healthy firm or project always has a plan in order to achieve their goals.
We draw your attention to the fact that in this article, we will consider a simplified model of a business plan to open a small firm. If you face the challenge to write a business plan for a large company, we advise you to use the services of professionals who specialize in this.
What Are We Facing Actually?
The business plan is a document which describes the project idea, the business processes and the mechanisms for their implementation in order to achieve the objectives set by the author of the document. In general, business planning, as well as any process, should have the goal. In this case, the success of your project depends on 3 key factors:
-awareness of your level at the current time (“A” point);
-a clear understanding of the ultimate goal: where you (and your firm) plan to be (point “B”);
-a clear understanding of the sequence of steps “A” to “B.”
Why Do You Need It?
The practice proves that a business plan is needed globally in two cases, and in each case the way to write it is different.
These cases are:
Business Plan for Investors
They are lenders, founders, authorities providing government support in the form of subsidies, etc. Here, the main purpose of a business plan is to prove the viability of the project and the efficient use of resources. It does not matter whether you will return them or it is a credit, subsidy or grant. In a situation when you think how to make a business plan for investors, it is necessary to focus on the actions you plan to do, maybe even bluff about certain things that will help you get financing. While writing a business plan, you can embellish something, but most importantly do not get involved.
In short, your finished plan should be clear, neat, and logical. It should provide the explanations, facts, and so on.
You may also prepare a good presentation and talk to your investors.
Startup Outline for Yourself
In this plan, you will be aimed at the effective implementation of your own project. Let us explain with an example. If you make a plan to attract some funding, you can write that you need 300.000$ for the purchase of 10 computers. Then later in the form of a table, you do a detailed estimate.
If you make a enterprise plan for yourself, it is likely that even this cost of the computers will look in a different way. Will you ask why?
You are aware of the fact that you and your partner, with whom you are going to open a business, already have three computers. Also, at your father’s work, at home, and on the balcony, you can find another three and modernize them a bit. This is very figuratively, but the meaning is clear, we think that you get the idea.
It is all about available resources, but for an investor, you will seek funds for the purchase of new office equipment, as you will need to account for its documentary.
The same is true if you are going to open a firm in the sphere of transportation. If it is the business plan for an investor, you write that you need 5.000.000$ for the purchase of five trucks. Then for the investor, it will be easier to navigate in the expediency of using their funds. Even if you already have 1 or 2 trucks, you simply complete new fleet with this car in obtaining financing, and everyone will be happy.
As it often happens during the negotiations with the investor, you say that for the successful operation of your project you should have five trucks, but in reality, you have only two. Then you start to mislead investors, saying that one of these machines is purchased in half with your friend, and the other belongs to your parents and they cannot give it to you for a new project, and so on.
A business plan for people who will potentially give money for your ideas is the most detailed one. While writing a startup outline for yourself, focus on available resources and write the plan as close to reality as possible.
Where to Start?
Writing a startup plan begins with a preliminary analysis of the current situation. Before proceeding to the formulation, specification and filling sections, you need to put together all the data specifications that you have, and if something is missing, then fill these gaps by using third-party sources or talk with a specialist.
One of the recognized techniques for preliminary analysis before the upcoming business planning is the so-called SWOT-analysis.
What Is a SWOT-Analysis and How Is It Used?
SWOT is an abbreviation and is deciphered in the following way:
The SWOT-analysis is needed to assess the internal and external factors of the startup, drawing an objective picture of the upcoming enterprise planning.
For example, in your case, indicators can be the following:
– Low cost of creation;
– High professionalism of the project team;
– The item (service) has an innovative component;
– The attractive packaging of the item, or a high level of service.
– Lack of own retail space;
– Low brand recognition among potential customers.
Here it is an example how to create your personal SWOT analysis.
Opportunities and Threats
They are the characteristics of the external environment, which can affect the firm indirectly. Thus, they can influence the outcome of its work in the future.
Such factors may include:
-The economic and political situation in the country or region;
-Socio-cultural environment (consumer mentality in particular);
-The level of technology development in the areas of business;
-The introduction of new materials and technologies for the production;
-Obtaining funds for the project;
-Adaptation of product design to the culture and age characteristics of the region.
-High customs duties on raw materials for the creation of the product;
-Strong competition in this market segment.
After the SWOT-analysis is done, you can proceed with describing the sections of the plan for the enterprise you are going to run. All this will help you to come up with a startup outline for yourself as efficiently as possible. So, you will save a great amount of time and get good results.
In the next article, we will analyze in detail how to fill in the startup plan, and show you an example. We hope you have enjoyed your reading. In the previous article, you can read about the case study.