How to make a Business Plan

How to make a business plan: a simple and intuitive guide for the realization of your business project

If you are an entrepreneur, you will surely recognize the importance of a Business Plan as a fundamental management tool for your projects.

Having clear strategies and steps to follow to achieve your goals is more than ever necessary, in an era of economic uncertainty and important changes.

So let's see specifically the usefulness of a Business Plan.

WHY IT IS USEFUL TO MAKE A BUSINESS PLAN

A Business Plan is first and foremost a clear and effective method of visualizing your goals and defining the best strategies for achieving success: in short, a real strategic guide for your business.

In addition, a Business Plan allows you to discern with greater clarity the strengths and weaknesses of the project you are working on, thus allowing you to identify alternative strategies for achieving the objectives set.

Furthermore, thanks to the support of a valid Business Plan, you have the opportunity to establish benchmarks, that is to say reference points on which to base the next steps to be taken.

It is also an excellent tool for promoting relationships with partners, customers, suppliers and distributors.

Finally, every self-respecting project needs capital to start, and the best way to introduce yourself to potential financiers is through a Business Plan, which accurately and clearly defines the strategies that you intend to pursue to achieve the objectives. .

Once you have ascertained the usefulness of the Business Plan, it is time to ask yourself which type of Business Plan to implement as appropriate. It is impossible, in fact, to propose a standard Business Plan model, given the variables in the field, but you can still learn to know what are the fundamental characteristics to create an excellent Business Plan, tailored to your needs.

Let's start by saying that every self-respecting Business Plan is not made to remain the same, but will inevitably undergo updates, based on the company's performance. From this point of view, it can be considered as an extremely useful reference point for business management.

HOW TO MAKE A BUSINESS PLAN: THE EXECUTIVE SUMMARY

The executive summary is probably the most important element of the Business Plan, as the first concrete document, which aims to define the main points of the plan that you want to implement. This is the first element to be brought to the attention of the potential investor, therefore it is essential to be clear, direct, practical and convincing.

The objectives that a successful executive summary must meet are therefore:

1.      Explain the fundamentals of the plan;

2.      Indicate with extreme clarity the products or services to be developed and for which markets, trying to maintain a balance between ambition and opportunity.

3.      Explain the changes in growth trends, especially if it comes from markets or basically static periods. It is important to provide an image as safe and stable as possible of the company, to reassure the investor.

4.      Be practical, without resorting to advertising strategies but using objective and factual analyzes. Plans that are too promising or too "flashy" are generally perceived as something futile, which is not worth the economic investment.

5.      Deepen, without lengthening the broth: a good Business Plan must be comprehensive, but above all it must go straight to the point. The recommended length is between 30 and 50 folders, based on the complexity of the company being described.

6.      Strive to make a good first impression: even in financial matters, the first impression matters a lot. So make sure you present your plan at its best, without unpleasant spelling, grammatical or syntactic errors. Also use language that shows security, positivity and decision.

7.      Citing reliable external sources: this is a good way to support your statements regarding the target market or the competition, gaining in terms of transparency, security and reliability.

HOW TO MAKE A BUSINESS PLAN: DESCRIBE THE COMPANY

The real heart of a Business Plan is the description of the company, i.e. its nature, its fundamental characteristics - such as its mission - current and future objectives, strengths and weaknesses, up to the success factors . If desired, general information such as the type of company, the date of incorporation, any past changes, the investors and the directors who are part of it can also be added.

Read also: auditors in UAE

To make an excellent description of the company, the following points can be taken as a reference:

1. In which sector the company operates

In addition to the basic information, it is useful to show a certain originality, which makes the company appear competitive.

2. What are the company's objectives?

It is important to provide, in this case, all the possible details, also on the financial front.

3. What are the success factors of the

Management company, business organization, or products that have contributed to the success of the company, are detailed here.

4. What are the successes already achieved or the strengths?

Here you have to explain if you want to invest in something that has already been a success factor for the company in the past or if you want to try new initiatives, chosen on the basis of skills and the potential of the company.

5. What are the weaknesses?

The critical points of a company must be assessed exactly as the strengths, to have a clear idea of ​​what elements can undermine the success of the company.

HOW TO MAKE A BUSINESS PLAN: PRODUCTS AND SERVICES

What products and / or services does your company offer?

This part is dedicated to an in-depth description of the products / services that the company offers.

The first thing to specify, in this case, is whether these products or services are already marketed, if they are ready to be launched on the market, or if they are still being processed, specifying the time to market.

To create a description of the products or services offered, you can follow this scheme:

1.      Define the physical characteristics of the product, attaching photos, drawings and information brochures if possible;

2.      Explain the purpose of the product / service;

3.      Define their attractions, and then explain how the product / service stands out from others on the market;

4.      Evaluate possible future evolutions and developments;

5.      Indicate whether the product or service is covered by legal forms of intellectual property protection, such as patents or registered trademarks;

6.      Provide price lists, pricing policies and profit margins;

7.      Explain the composition of the current customer portfolio;

8.      To expose sales and margins trends of products / services;

HOW TO MAKE A BUSINESS PLAN: ANALYSIS OF THE SECTOR

To have a clear overview of the sector in which the company will operate, in terms of competitive advantages, success factors and possible threats, it is necessary to draw up an analysis of the sector.

An essential and useful guide for this section is the pdf taken from the third chapter of Grant's book "Strategic analysis for business decisions", a work that deals with sector analysis in a schematic as well as effective way. 

 HOW TO MAKE A BUSINESS PLAN: MARKET ANALYSIS

Once the company, the products or services offered and the sector have been described, the market to be addressed must be defined.

This is an extremely important phase, as it will eviscerate the environment in which the company will place its offer, therefore the key factors that guide the purchase choice of potential customers and all the details that can make the difference in the success of the project.

Having accurate, in-depth and reliable market data is still very difficult, but a starting point can be to ask the right questions: what goal do you want to achieve, what is the budget to invest, what is the conversion rate or if the value of your customers it is proportional to the goals you want to achieve.

HOW TO MAKE A BUSINESS PLAN: MARKETING STRATEGIES

At this point, the marketing strategy is outlined, that is to say the guidelines that the company intends to follow in the medium-long term to achieve the set objectives.

To define the Marketing plan, it is necessary to start from the sector and market analyzes, consequently going to outline the main elements of the Marketing Mix, namely:

1.      Product, also understood as quality, guarantee, membership line, post-service sale and so on;

2.      Price, which also includes business costs, pricing policies, discounts, payment methods, etc.

3.      Point of sale, or the methods of distribution of your product / service, whether online, direct, or passing through intermediaries;

4.      Promotion, which includes all communication aimed at making the product / service known on the market.

HOW TO MAKE A BUSINESS PLAN: MANAGEMENT

A business is made big mainly by the people who work there. That's why the best choice for a project is to ensure a management capable of living up to the situation and a team that knows how to collaborate to the full of its capabilities.

The basis of successful management is above all a common purpose, and a harmonious vision of the goal to reach.

Each team member must respond appropriately to his role, must have a clear idea of ​​his place within the company and must be able to maintain relationships with all other members.

To successfully describe management within a Business Plan, you must first define the functions performed by the various collaborators and the responsibilities.

Then follows the identification of the characteristics and skills of each function, in order to clarify the selection criteria, without failing to describe possible future extensions.

Finally, we need to present the people, the faces of the company. In this case, it is useful to provide curricula of the key components and possibly indicate the successes achieved.

HOW TO CREATE A BUSINESS PLAN: THE OPERATIONAL PLAN

At this point, we move from theory to practice.

In detail, we will outline the systems and methods for carrying out our project, demonstrating that we have competence in bringing our vision to actual fulfillment.

It is very important, at this stage, to dwell on the daily processes and carefully describe any problems and solutions regarding the practical and procedural organization of work, invested capital, and supplies of raw materials; it is also useful to mention the policies adopted with the sales force and with suppliers.

For simplicity, this section can be divided into four key points:

1. Summary of product research and development policies;

2. Resources and processes leading to the product or service;

3. The attention dedicated to after-sales assistance;

4. Any external influencing factors.

HOW TO MAKE A BUSINESS PLAN: USEFUL CAPITAL AND FINANCIAL INFORMATION

Financial analysis is among the most painful points in drafting a Business Plan.

This section aims to define some essential aspects of the plan from a financial point of view:

1.      The capital required to start the business described in the Business Plan;

2.      The opportunity to use lenders;

3.      The times of return and repayment of the lenders;

4.      Amortization plans for machinery;

5.      Supplies for the company and payment methods for the same;

6.      Methods and payment times of the customer.

Typically, this part of the Business Plan it is entrusted to consultants, not only because it requires specific skills but also because it is one of the key phases to convince the potential financier to invest.

In conclusion, it must be remembered that the Business Plan is an extremely variable document, depending on the type of company, the project, the purposes and so on. It is therefore essential to try not to be too schematic and rigid in its implementation, to make sure that the uniqueness and competitiveness of your company emerge above all.