A business plan is a document that specifies your business goals. It is necessary to put it into practice and achieve real measurable results.
The plan does not guarantee 100% success, but it is a key element that accompanies every business idea. It must contain a detailed and well-founded analysis, budgets, and a description of the objectives of the project or company.
Such a plan is often needed when applying for a loan from a bank, obtaining financing under a program or project. It is essential for each company to prepare its own business plan, not only for the sake of potential investors or institutions but also to gain a realistic idea of its own business.
In this article, it will become clear why it is important not only for every new but also for every established entrepreneur to develop a good business plan and what are its mandatory elements in order to be as useful as possible.
The preparation of such a plan is necessary because it gives a clearer idea of which direction to direct your efforts, and also helps to attract partners and sponsors. The good thing is that it can be changed and adapted constantly with the growth of your business, according to the needs of the company and with each change in circumstances.
It is recommended that the business plan be prepared by the company’s team, instead of by an outsider who does not know the specific business and all the specifics. It will also be more motivating for employees to follow and implement a plan that they have contributed to.
Sometimes, however, additional help is needed for parts of the plan. It is wise to consult external consultants about the methodological layout of the planning process and the extraction of statistical information in order to correct the data you work with.
What is the Business Plan?
The business plan is the most important document that provides guidelines for business development. It is a tool for describing the goals of a particular business and shows how these goals will be achieved over time.
Main reasons for developing a business plan:
The business plan is a working document to improve the work of the organization as a whole.
The business plan aims to attract funding for the development of a specific business venture (project).
For some donor organizations, the business plan is part of the application form for funding, while for others it is a separate document.
Contents of a business plan
The requirements for the preparation of the summary are the same as for the project. The summary must contain:
Sector of activity
The proposal and what will be its impact on the sector
Why will you succeed? (strengths)
What do you want from the reader (sponsor, investor)?
Who are you and why should they trust you?
In the summary you must indicate:
The total value of the investment
The requested funding
What is your business and what do you do?
Since when has the company been operating?
What is the ownership structure?
What is the size of the business (turnover, profit, employees)?
Are there any other activities?
The industry must be precisely defined in order to be able to determine its development trends.
What is the structure of the market?
What is your market position?
Who are your customers? (target market)
Why would they choose your product or service?
Who are your competitors?
In which area do you compete – price, quality, regular deliveries, etc.?
How do you distribute your products?
C. Offered product or service
What do you produce and what are its features?
How do you produce it? (technology used)
Where do you produce it?
Does the business have any patents or exclusive rights?
What are the main raw materials you use?
Is the number of suppliers limited?
Are you too dependent on one supplier?
Can you guarantee an increase in supplies?
Are commodity prices stable?
What do they depend on?
E. Activities and production process
The same applies to the description of the activities as to the project activities. Consider where you need to develop this part. You can apply a technical plan for the production process.
F. Management structure
The same applies here as to the project management structure.
The requirements for writing a business plan are the same as for writing a project. When applying for financing a business project, many additional applications are required – contracts, permits, licenses, etc. Carefully read the instructions for them and apply them.
The role of the marketing plan is central in the development of business projects. It must be consistent with the overall marketing strategy of the organization.
Content of a marketing plan
Structure and development of the market in which it operates
The territorial scope of the market
Total market sales
Our market share
Based on the socio-economic situation, determine the market development trends.
The target market is the desired market segment of the company, where the goods or services will be sold. Which major or combined market segments are you targeting?
“High quality – high price”
“Average quality – average price”
“Low quality – low price”
type and number of competing companies
categorization of competitors
opportunities for new companies to enter the market
type and number of users in general
categorization of users
private users / corporate users
persons or companies not using the product and potential customers
Distributors (sales representatives)
type and number of distributors
categorization of distributors
Forecast for the future
change in market size (total and by segments)
new trends in consumption (including new target groups, changing customer tastes, prices, macro-environmental impact)
changes in competition (including new direct or potential competitors)
significant changes in the trade network (including new sales channels)
In order to enter or expand your market presence, there must be something to outperform your competitors. Indicate it clearly, if possible supported by a brief analysis, specific data, expert assessment.
There are four main stages to pricing:
cost calculation (costing)
comparing prices with the competition
compliance with consumer expectations
determining the profit
Promotions and advertising
In this part of the plan, indicate how you will present and advertise your products. How will customers find out about you?
For your business plan to be convincing, it must contain financial information. At the very least you will need to prepare:
income statement (ODA) and forecast
cash flow statement (CAP) and forecast
balance and forecast for the end of the project
Sponsors usually require the project to be accounted for in separate accounts.
Based on past results and future forecasts, make an analysis of how the project will affect the company as a whole and how it will affect the development of the company after its completion.