Business plan: what it is, how to do it and its importance

John Labunski Dallas

For everything we do, there is a plan. Whether it’s a trip, a party or even a text. This planning can be done mentally, quickly, through a notepad or a document, something large and structured. And just like everything we’ve done, starting a business requires precise planning.

Thus, even before opening a company, it is necessary to make a business plan and study the feasibility of the enterprise. In addition, a company’s business plan is of paramount importance so that you can get a sense of where your company is going and which way to go.

So, better understand what it is, how to do it, and how important a business plan is!

What is a business plan?

A business plan is a blueprint for how your business will operate. John Labunski financial investments to marketing. It is a document that contains the business objectives and purposes. Thus, it will help in making decisions and investments related to the company’s future.

It will indicate what the company is and what its future is, which areas will generate better investment results and which should be prioritized. You will question when, how, why and with whom to do business.

How to make a business plan?

A business plan will guide your company in many ways, so you need to be aware of all the areas it should contain:

Executive summary

The executive summary is a summary of the entire business plan. It brings all the contents of the plan, but in a more focused and succinct way. Thus, it should only be done after the full completion of the business plan, so that you have a guide. Also, it is independent of the business plan, that is, it can be published or sent, without the need for all the planning to be known, since the summary will indicate all this in a smaller space.

Vision and mission

The vision of a company is the trajectory of the company, the way it wants to see itself, the future of the business. It is the image that the company wants to achieve through its mission and work.

The mission is the point where the company should reach, and what will guide the company’s goals. That is, what impact the business wants to have on society. It serves to guide employees in the organization’s financial and social issues.

General description of the company

Like the summary, the description brings what the company is about in an objective way. If it has been in existence for some time, the growth and revenue from previous years must be entered. If the business plan is created with the intention of starting a company, it must contain everything that is expected of it.

Strategic analysis

The strategic analysis of the company serves to identify strengths, threats, opportunities and weaknesses of the company, as in the SWOT analysis . Or what needs to be done, where the company is going, when to do it, how and the costs, as in the 5W2H analysis . These types of analysis serve both to know where the company is, and where it should go or is going.

Marketing and Sales Plan

The marketing plan serves to address the means of dissemination that will be used by the company, and how it will be done. In this way, he must present the services and products of his business, in addition to the price and information about it.

Financial plan

This area of ​​your business plan should count, in numbers, all financial-related data. If your business is already up and running, growth and revenue data should be included. If it has not yet been opened, it must contain what is expected in this area.

The financial plan must bring everything that is expected of this area in the company. From how much you expect to earn, in a sensible and calculated way, how much you will need to invest and what are the possible sources of financing. That is, all data related to the financial, in a calculated way.

Line of activity

It is the area in which it is inserted in the market. That is, which branch the company belongs to.

Consumer market

Before even setting up a plan to open a company, it is necessary to carry out a market analysis. This means assessing whether your products and services are in demand in the community where you intend to settle. It’s no use having the capital, the idea, the place and the planning if your target audience doesn’t need your merchandise or service.

Here, it is necessary that you also establish the size of the consumer market. As well as how much your product will be able to take from your competition.

In order to determine this factor, it is recommended to do a market research. This research can be done in a primary or secondary way.

The primary one is that you will seek information directly from potential consumers who will provide information.

The decision to choose one of the two ways is made based on the type of business you want to set up. And, based on this, you will assess the feasibility of your plan and adapt it to the needs of the consumer market.

Supplier market

Regardless of the branch and function, whether services or products, a supplier will be needed. Therefore, you need to ensure that you have providers for your products at your fingertips.

Competition

Always do your competition analysis, whether you’re selling fruit or cars. This will help you make numerous decisions, such as your location, your products, innovations, among many others. So, look for companies that have a service or product similar to yours and that are in the same area.

Products and services

Clearly define what your products or services will be offered. If you sell sportswear, for example, you need to have t-shirts. If you provide any repair service, you must have the tools. That way, having control of products and materials, you will never let your customer down.

Localization

Location is relatively important, especially if you are going to buy the point where you will be located. And even in the case of renting, you have to choose a place that makes sense, as changes always bring a lot of work and you end up losing sales. Choose a place that has something to do with your previously defined target audience. And also that the area makes sense.

Operational process

This is one of the most important and most important parts to consider. The operational process is the roadmap for how things should be done in your company. Thus, it is the description of everything that needs to be done to complete an activity.

Writing tips

Another factor that must be taken into consideration when you are developing your business plan is your writing.

This means that the use of slang, technical jargon and acronyms is not recommended. This is because the language must be coherent and with the proposal and look as professional as possible, even if the project is more modern and young.

In addition, experts recommend the use of simple, direct language, with short sentences and through lists.

All this, with the aim of facilitating communication to all who have access to it. Thus, focusing mainly on partners and future investors.

How important is this planning?

A business plan for a company has several benefits. Among them:

  • Better visualization of your business : By having a document with your company’s data, it is possible to broadly view all the information necessary for a future investment or a decrease in expenses.
  • Be an indicator : with the business plan, you have greater guidance on where to go. It will give you the information you need to know if you are on the right track or if you need to make any changes to your planning.
  • Attracting external investment : With an information base on where you intend to have your company in the future and where it is now, it will be easier to know if investments are necessary. Which will facilitate the conversation with a future investor, because, in this way, he will be able to understand the present and future needs of your company.
  • Bring more security : Entrepreneurs who have a business plan demonstrate that they care about the management and future of their company. As entrepreneurs who do not have a business plan, they appear to be disinterested.

What are the main challenges of creating a business plan?

 Many people find it difficult to develop a business plan because of the challenges that exist. Indeed, the difficulties are numerous and are felt by everyone who is carrying out their planning and development.

Among them we can mention:

Need to make assumptions

Since at the beginning, the administrator does not have all the information at his/her disposal, it is necessary to initially assume assumptions. This step is when the manager makes assumptions about how much sales, costs, consumer behavior, etc. will be.

But what are hypotheses?

Hypotheses are nothing more than an unproven idea that needs to be true for the business to work.

In practice, they demonstrate the need to adapt the adopted business model. But they also help entrepreneurs to imagine possible situations of risk and success.

Therefore, it is worth trying to predict certain occasions and events that may occur during the operation of your business. And so include these possibilities in your plan.

Experts indicate that in markets where there are many hypotheses to be tested, it is very advisable to plan as little as possible before taking action.

Finally, it is worth emphasizing that these tests of implementation of the hypotheses in the business plan should use as little capital as possible. Always bearing in mind that they are just suggestions of possible events. And it is only in practice that you will make the “fire test” of what you have planned.

In summary, the hypotheses can serve as a safety plan and can facilitate the entrepreneur’s decision making, in case something does not go as planned.

Fill the plane linearly

Because it is a complex object and with many variables, it is difficult to assemble the sequence of ideas in a linear way. That is, in a sequence that has a beginning, middle and end.

However, it is often impossible to complete all the information needed there, as the administrator does not yet have it, since he depends on others that are at more advanced points in the plan.

Experts recommend that the plan should be filled in according to the information obtained along the ideas. So the last thing that should be written is the executive summary. This, therefore, only in the end, that everything that was defined in the plan will be known.

Furthermore, every time a variable changes, it is necessary that the entire plan be reviewed, so that it continues to make sense.

Need to know other disciplines

The one who is planning his business plan, when creating it, must analyze other areas of knowledge, in order to point out if his proposals are viable and can make a profit.

To know whether or not the business plan will be successful, it is necessary to make financial calculations.

After all, this strategy allows you to “design” a more consistent and real plan, within an available budget.

Examples of knowledge

As examples of knowledge that should be necessary for the creation of the financial plan of the business plan are:

  • Labor law, in order to determine what will be the labor charge that will be paid to the employee.
  • Business and tax law, to decide the forms of legalization of the company and what will be the tax regime of the company. Will it enter the Simples National taxation regime, for example? In addition, the way in which the company will be formed influences any liability of the partners in the future.
  • Accounting, in order to make accurate calculations of depreciation, fixed and variable costs, working capital, initial investment, among others.
  • Inventory management, so that it is possible to plan the stock, what the initial stock should be, what the minimum stock is for the business to continue moving forward.
  • Financial Mathematics, for all the calculations necessary for the maintenance of the business.
  • Financial analysis, so that you can immediately calculate the return on investment, the profitability of the business, etc.
  • Logistics, how your product will be delivered, how this logistics management will be carried out.
  • Keep in mind that the business plan consists of seven main areas, each of which requires knowledge of several related subjects. Know that constant study and training is necessary to make your business plan a success.

It is possible, and still recommended, in all these cases, that you consult specialists so that they can solve all your doubts, or clarify conflicting information John Labunski Best Investment Advice

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