Long-term planning is one of the pillars of entrepreneurial activity. If your goal is to create a vigorous, competitive and well-earning company, then you need a detailed business plan - a description of a business idea that would include information about the product manufacture or about the distribution, advertising and sale of services. The professionally drawn up business plan will not only help attract investment, but will also serve as a basis for a stable development of the company. Learn how to develop the effective business plan for the long term perspective!
Does any enterprise need a business plan?
Entrepreneurial activity is diverse. However, regardless of what exactly your company produces or sells, the business plan is an indispensable condition for the path to success. You cannot succeed without a good business plan, if you need to:
- Check the viability of your idea before seeking financing and setting up an enterprise;
- Establish effective communication with employees, explaining the company's goals and prospects;
- Attract investment by proving to banks and other private and public investors that your business idea is competitive and profitable.
A ready-made business plan will help to structure and organize work tasks, to realize short-term and long-term goals and to determine the position of the company in the market. Consequently, the business plan is a document of first necessity for every successful enterprise.
The first steps in drafting the business plan
A long way has to be passed from the business idea to the high quality business plan, since the business plan is a fairly detailed set of documents that includes a description of the business development prospects for a period of 3 to 5 years.
The well-developed business plan gives a well-founded answer to the question of whether to invest in this project and whether the business will be profitable and competitive. What basic principles should be included when drafting the business plan? We will tell about this later!
The ready-made business plan in 9 parts
When drafting a business plan, you inevitably have to change the standard pattern, because each enterprise has its own characteristics that do not fit into the template. Nevertheless, there are a number of basic principles that must be taken into account and which concern all business plans. What are they?
The summary of the business plan should be clear, thought out and consistent. The basic information that should be included in the summary is:
- Purpose of the business plan;
- Legal form of commercial activity;
- Major activities;
- Place in the market;
- Key financial indicators.
2. General information about the company
The business plan starts with a detailed description of the company. In this section it is necessary to mention:
- Details of the company, its structure, division of duties, number of employees;
- Information on the company founders and owners, on their equity participation in the fixed capital;
- Fixed assets of the company, actual credit obligations.
If in the history of the company there were important achievements, then they can be mentioned in this section.
Here you should describe the organizational structure of the company, provide information about the management. Appropriate education and management experience in a particular business sector can be an additional advantage in attracting investments.
4. Research of the industry
In one of the main sections of the business plan it is necessary to show how successfully the company owners summarized the available information about the situation in the market and how they used the obtained data to their advantage. The research of the industry includes:
- Description and analysis of industry development trends, their impact on the viability of the company's products/services;
- Prospects for the development of the industry;
- Description of the export potential.
When writing this section, you should take into account the current economic situation and forecasts for the future, especially if a long-term business plan is drawn up.
Almost every new product or service has competitors. This section should describe:
- Whether the market is saturated with similar offers;
- Who are the most important competitors of the company, their advantages and disadvantages;
- What is the strategy of company competitiveness?
To objectively evaluate the company's position in the market, it is recommended to use SWOT analysis or its Latvian translation: SVID-analysis. A strategy that determines the strengths and weaknesses of the company, as well as its threats and opportunities, is one of the simplest and at the same time reliable ways to evaluate a business idea.
6. Characteristics of products / services
This section is devoted to the manufacture of products or services. The most important points to include should be:
- Description of the production chain;
- Production technology;
- Characteristics of raw materials;
- Characteristics of suppliers and a schedule of deliveries with dates.
Depending on the type of manufacture, information on patents, production facilities, necessary equipment, etc., should also be included here.
7. Marketing plan
The aim of this section is to give a description of the sales markets and the place of company’s products on them. The marketing plan should contain information as follows:
- About the uniqueness of the product or service;
- About the prices and discounts policy;
- About consumer behaviour;
- About planned advertising campaigns.
The marketing plan should convince the potential investor that the project will receive the necessary recognition and the company will attract new customers.
8. Planned project implementation
Here it is necessary to describe what will happen to the company every month for at least 1 year, what results are expected, what goals will be realized. The business plan should contain information about the necessary resources (premises, equipment, licenses and labour) and settlements with suppliers and buyers.
9. Financial plan
In this section, you should describe the revenue plan, as well as calculate the expected profit and loss, since this indicator determines the viability of the business idea. It is important to calculate additional funds for depreciation of equipment. You should also describe the balance sheet of the company and cash flow. Therefore, you should invite a qualified accountant to write the business plan.
Writing the quality business plan takes a lot of time and requires attention and commitment. Is it possible to facilitate this process by using third-party assistance? Learn more!
A template business plan is a successful find or a waste of time?
On the Internet you can find many samples of business plans, which are drawn up according to a single scheme. The samples are available for:
- Investment companies;
- Consulting companies on business matters.
A universal business plan can also be found on various websites and blogs, which provide detailed information about finance and business activities. But before using any of the samples, we recommend checking the reliability of the website to avoid misunderstandings and outdated information.
The sample business plan can be useful for young entrepreneurs who are making their first steps in business. The sample provides an opportunity to study what information is needed for this and how to best describe it, however, each business plan must be drawn up independently.
Avoid ready templates!
Be careful if you are offered a ready business plan, where you only need to enter the details of the company and the missing figures. For example, how useful is a ready-made business plan for a clothing store or a cafe that was not compiled by the owner of the company, but by an unknown enthusiast on the Internet? Such a document is made using standard phrases. It does not take into account the current situation in the market and the location of a particular company. Consequently, the ready business plan, which the entrepreneur did not develop independently, most likely will not receive the support of investors and will not help to objectively evaluate the strengths and weaknesses of the business.
However, not every future entrepreneur has the necessary knowledge and experience to develop the high quality business plan. In this situation, it is worth asking for help from business consultants.
A logical & understandable business plan with EDO Consult
We, EDO Consult, provide comprehensive assistance in preparing business plans. Use our services to:
- Figure out the viability of your business idea;
- Develop the effective business plan from the very beginning;
- Check the compliance of the available business plan with the highest requirements
To make the ready-made business plan help you cope with all the challenges of entrepreneurship, you need to spend time and resources to it, but you do not need to do it alone. Contact us and get professional support when developing your business plan!