A business plan is a key tool for any company, regardless of its size or stage of operation. Developing an effective business plan may seem difficult, but it is a process that can be broken down into several key steps. The proper execution of each can contribute to business success.
A business plan is a signpost that will guide your company on the road to success. Whether you are just planning to start a business or are starting a new project within an already operating company. Preparing an effective business plan requires specific knowledge and sometimes experience. Read my article to increase your chances of success.
If you want to develop a truly effective business plan, answer the most important question at the outset. Who is the recipient of the business plan? Is the purpose of developing the document to plan the company's development in the most accurate way, to develop a roadmap for yourself, or is it to convince an investor, bank or grant-giving authority of the project?
This is an important point, because depending on the purpose of your business plan, you will approach its creation differently. If you are primarily concerned with convincing a third party to get involved in the project, it is worth writing a business plan emphasizing the qualities of the venture. On the other hand, when you are creating a business plan for yourself, it is worthwhile to objectively approach weaknesses, threats, market analysis, competition or, above all, financial projections. The more you identify risks at this stage, the greater the chance that you will be able to prevent them.
If, as a result of making a business plan, it turns out that the project is not as future-proof as you previously thought, it is better if it turns out already at this stage than when you start investing. This is one reason why you should consider creating a business plan.
Another important reason to put your business idea on paper is to convince your audience about your venture. This is especially important when your project is a potential object of external financing. In such cases, I recommend entrusting the execution of the business plan to experienced professionals. You know the saying that first impressions are only made once? It would be a shame to come off unprepared in an interview with an investor or bank. And when it comes to a grant, the next chance may simply not be there.
Below you will find the elements that a business plan should contain. Remember that this is not an exhaustive list, but only an indication of the necessary elements.
A venture summary allows the reader to understand the basics of the business in a short, concise format. It should include information about the company, mission, vision, product or service, as well as basic financial information. The short-term and long-term goals of the business can also be presented right here.
It contains more detailed characteristics of the planned business. And in particular, information about the history of the company, the location and scope of operations, the owners, as well as general information about the product or service that the company trades in. This section should also describe what other key (for a specific business) aspects of the business are. This section can look very different, as there are individual circumstances involved in running a particular business, and it is difficult to point to one right scheme here that fits all. A lot also depends on the size of the planned business.
This section should include information on the company's organizational structure, profiles of key team members (including their qualifications and experience), as well as basic information on company management. You can also indicate a list of potential suppliers or major customers of the products offered (potential buyers of the products offered). Sometimes the planned sources of investment financing are also indicated here (in addition to the description in the financial section).
Description of products offered. Describe in detail what the company offers, the benefits to the customer, and information on intellectual property rights, patents, or product research and development - if applicable.
Every business plan should present an analysis of market opportunities based on hard market data. They should indicate trends, possible seasonality, elements that significantly affect the industry and business. The prospective entrepreneur should be able to assess the profitability of the planned venture at least a few years ahead, and a market analysis helps with this.
Its task is to identify the main competitors in the market, understand their strategies, products, strengths and weaknesses, as well as unique features that can affect your position in the market. This is a very important part of any business plan. Even if at first glance you think you have no competition, think about indirect competitors. These are entities that already meet a similar or the same need of customers, but in a different way.
This section should include information on the company's marketing strategy, sales plans, as well as information on pricing, promotions, distribution and customer service. It is worth indicating who will be responsible for implementing the sales plan and why. Keep in mind that sales is the most important aspect of any business. Therefore, the business plan should describe this part of the business in a clear and specific manner. The marketing strategy should include as detailed a description of the activities as possible, along with the rationale and measurement of their effectiveness.
Otherwise known as financial analysis. Includes financial projections, budget, break-even point analysis, and information on sources of financing. It usually takes the form of elements such as a balance sheet, income statement, cash flow statement, sensitivity analysis and investment performance indicators such as IRR or NPV.
It will require research on potential customers and competitors. Understanding who your target customers are and what their needs and expectations are is critical to the success of your business.
Tools such as surveys, interviews, and social media data analysis can be helpful in obtaining this information.
You can use publicly available sources (such as the Internet). Remember, however, that the data should be reliable. I recommend, for example, CSO data. In addition, some entrepreneurs use paid industry reports. Their price usually starts from PLN 10 thousand net.
Competitor analysis should include understanding what products or services your competitors offer, what their prices are, what marketing strategies they use. Consider talking to the customers of your competitors or conducting a so-called "anonymous customer" survey. You can also limit yourself to collecting publicly available data from the Internet (competitor's website, publicly available reviews of service quality, etc.).
SWOT is a tool that will help you understand what your strengths, weaknesses, opportunities and threats are. Strengths and weaknesses are the internal aspects of your business that you have control over. For example, they are the skills of your team, the technology you have, or the processes you have implemented.
Opportunities and threats are external and may include aspects such as market trends, the economic situation, or the actions of competitors, for example.
Performing a SWOT analysis is easy if you already have a competitive analysis and a market analysis.
It is important that your forecasts are realistic and based on solid data. You can use tools such as Excel or specialized financial management software to help yourself make these forecasts. Remember to take into account all potential costs that your company may incur, as well as to realistically estimate future revenues. If you are not a financial analyst, but want to have a financial model in professional form, back yourself up with the support of specialists.
A business plan is a living document. It should be updated and adjusted as your business grows. An effective business plan is one that is well thought out, based on solid data and that realistically reflects your business and the market in which you operate. It is a tool that can contribute to the success of your business.
Drawing up a professional business plan is a lengthy process. Everything here depends on your needs or those of other readers of the final study. Start by determining these needs. Then you will know whether a business plan spread over one page (the so-called business model canvas) or rather a document of 100+ pages is enough for you. If in doubt, write to us.
