The business plan: the starting point in a business
The entrepreneurship can be a costly affair if you don’t make a fair and realistic assessment of the business. Consider the expenses that are involved in starting and operating of the business and what is the capacity to support it and to face the challenges ahead. The business plan is a document that helps you identify these issues from the beginning. This document will create an overall vision that will guide you in starting and developing your business.
Before starting any business, you have to start with the business plan. It will help you quickly identify the potential, and barriers that you are going to face in your business.
The business plan is an essential document if you want to get financing from the bank or to attract other investors. The business plan involves a process of research and thinking about the type of business you want to do, and the analysis of any ideas to see how good it is for you. It takes time to develop, but the results can be quite profitable.
The lack of a business plan can cost you more in the future if it proves that your business can not be profitable or that the operating expenses or investments required t start the business were underestimated.
Usually, the timeframe that should be covered in the business plan is 3-5 years. In general, the document should include issues related to:
- Company description (in legal terms) and on key employees
- Description of products and services
- Information about the production process and operations
- Market description
- Details of the marketing plan
- Financial information
The company description
Start your business plan by conducting a detailed description of the business you intend to start. Such a description should include the name, the main activity, information about shareholders. Also, here the activities that involve new business, resources and risks should be presented.
Before you start your own business, it is advisable to do a market analysis, which estimate the total volume to find out who the potential customers are and how they are they segmented , to establish the audiences whom your business addresses to. You can find this information at the National Institute of Statistics and the Trade Register or the NAFA website you can find out which are the main competitors and what businesses they have. The plan presents market trends, consumer behavior and competition and the measures you should take.
Products and processes
Perhaps the most important section of a business plan is to provide a complete description of the products or services your business offers. Focus on their description, detail the elements related to the resources, technology, logistics, and quality of their analysis. Show by what your business differentiates from others in the same category, considering the advantages such asprice, offered value, sales, promotion methods.
The financial Forecast
Regardless of the primary purpose of your business, the first rule you have to keep in mind is the financial viability of your business. The Financial Projections is an important section of a business plan.
From here you should not miss the key financial ratio analysis and more realistic estimates of the profit and loss of revenue that you will have.
Developing a business is resembling to building a house: in the end you will find that you have far exceeded the initial budget. It is therefore advisable to be cautious when elaborating the business plan. It would be better to adjust income with less than 25%, and get a 25-30% margin for unforeseen additional expenses.
What should you do on your business plan:
- Be practical! Set concrete goals and ways of achieving them
- Be realistic, be it goals, financial projections or personnel scheme
- Do not miss the point. All sections of the plan should reflect the final results: how, when, and especially how the company will make profit
What you shouldn’t do on your business plan:
- Do not use an advanced technical language, but rather express their ideas so they can be understood by people outside the organization
- Do not try to hide weaknesses or business risks
- Not present financial projections without explaining the basis for this. Argue each cost.
Good luck with your business!
Photo Source: freedigitalphotos.net