Creating a Business Plan can help you achieve your business goals. A clear and engaging business plan is a necessary tool in order to build a successful business that allows you to achieve your financial goals. It is also a document that can persuade others, including banks, to invest in what you are creating. While there are many types of businesses, the main categories of information you need to address in a business plan are quite similar and broadly applicable. You can learn how to conduct research, how to structure a company correctly, and how to write a draft. Read step one to find out how to approach the business plan in the right way.
Steps
Method 1 of 3: Do Your "Homework"
Step 1. Analyze the potential markets for your business
Consider what segment of the population (local and / or international) might need your products or services. It is not enough to "guess", it is necessary to carry out an accurate and structured research. You will have to analyze the data collected by external observers, but also do a first-person research, based on your methods and your direct observations. Consider the following research areas:
- Is the market in question receptive to your product service?
- What is the age of your potential customers?
- What is their profession?
- Is your product or service particularly popular with a specific ethnic group or social class?
- Is it only accessible to wealthy people?
- Does the ideal customer live in a particular area or neighborhood?
Step 2. Identify the size of your potential market
It is important to get as specific as possible about your market and product. If you are starting a soap company, for example, you may believe that everyone needs your product, but in the beginning your market cannot be the whole world. Even if you have developed a product that is used all over the world like soap, you still need to identify a smaller and more targeted first group of customers, for example children under eight who might like a bath with scented bubbles, or a soap. specific for mechanics. From here, you can analyze demographics in more detail:
- How many mechanics could there be in your city who need soap?
- How many Italian children are there under eight?
- How much soap do they consume in a month or a year?
- How many companies are there that produce soap in the same market as you?
- How big are the competing companies?
Step 3. Determine your needs to start the business
What do you need to get started? If you want to buy an existing company with 300 employees or start your own by adding an extra phone line to your home office, you'll need to make a list of everything you'll need. Some things could be material objects, such as 500 binders and a large archive in which to keep them. Other assets may be intangible, such as the time it takes to design a product or do market research on potential customers.
Step 4. Prepare samples of your product
If you're going to build the mouse trap of the century, you may have assembled a prototype made of used toothpaste tubes and bent staples at home, but you will need to make one that is more attractive and more durable to show to investors. What will your trap design look like? What materials will you need? Will you require money to do research and development to improve your original prototype? Do you need a designer to make the design for production? Do you have to patent your invention? Will you need to know if there are any safety standards to adhere to when it comes to mousetraps?
Step 5. Search the premises of your company
Call a real estate agent and look for specific places in the area where you could perhaps open a restaurant. Make a table of the most expensive and least expensive places and by square footage. Then evaluate the space you will need and the amount of money you will need for the rent.
Step 6. Determine the start-up costs
Make a list of all the material and non-material resources you need to keep your business running. The estimated total cost of all these items will become your startup (start-up) cost, whether you buy highly sophisticated computers or just install a new phone line in your home. If there are still products in your cost forecast that appear to be unreasonably expensive, look for alternative solutions. Keep in mind, however, that it is best to include each item you really need with a reasonable estimate of the cost of each asset, so as not to risk running out of money or going into the red on the loan. Be honest and prudent in your predictions, but also be optimistic.
At least in the beginning don't always take the best of everything. You can save on expensive office finishes, more suitable for an existing company, and at first be satisfied with the essential. Buy what you can afford, what works and what is necessary, forget the superfluous
Step 7. Put yourself in your investor's shoes
Ask yourself: "If I am going to invest X amount of money in a concept or idea, or perhaps a product, what would I want to know?" Collect as much information as you can that is useful and credible. Depending on the type of product you have, you may need to work hard to get information that is important.
Don't be discouraged if you find that some, or even all of your ideas have already been adequately satisfied by the market. Don't ignore it, but work on it. Could you do better or offer a better product than your competitors? In this case, you probably know the market well and know how to add value to your product in ways your competitors don't know. In other cases, you may need to focus on more exclusive or broader sectors than your competitors
Step 8. Identify potential lenders
Banks and other sources of finance do not lend money based on the skill of people: specific guidelines are followed, designed to ensure that they earn money by investing in your business, or by making loans. Generally, the lender will want to examine the Company's Capital, Capacity, Collateral (Guarantees), Conditions and Characteristics … the famous “5Cs” for taking out a loan.
Method 2 of 3: How to Structure the Company
Step 1. Define the business activity
A business plan is completely useless if you are not sure what the purpose of the activity is. What do you want to offer? What products or services do you want to produce or offer? List the specific needs your business needs to meet. Potential lenders need to think that your business will be of interest to people who can use your product or service. So focus on the external needs your business is going to meet.
How will your product / service enable people to do things better, cheaper, safer, more effectively? Will your restaurant delight people's palates with new taste sensations? Will your mousetrap help people catch the mouse without them getting sick? Will your bubble gum-scented shower gel revolutionize the way babies bathe in the evening?
Step 2. Choose a winning strategy
Once you have established what your competitive advantages might be, you can choose the best strategy to achieve your goals. Although there are millions of types of businesses, there are in fact only a few basic strategies that can be applied in a way that makes any business successful. The first step in choosing an effective strategy is to identify a competitive advantage for your product / service.
Your competitive advantage may include a special feature not found in competing products. It can involve superior service characteristics such as faster delivery, a lower price, or more thoughtful, attentive salespeople - these are strategies that should never be underestimated, as many companies over time "sit on their laurels" and can be put into trouble. offering customers better experiences and products than they expect. Even if your product or service is already well established on the market, you may be creating a quality image or brand or an exceptional reputation
Step 3. Design your business
Consider how to hire and organize your employees. From the moment you start thinking about your business concept, you will probably have a good idea of the number of people you will need, and the skills needed to start the business and run it.
Keep in mind that your initial plans will undoubtedly change as your business begins to grow. You may need to hire more managers to oversee your growing staff or set up new departments to meet growing customer demand. Growth projections and business expansion should find space in your business plan, but that's not the main element to focus on. For now, you will certainly need help to get started and to obtain funding that will allow you to start the business and make it productive
Step 4. Evaluate the practicalities of running a business
Think about your role as leader and head of the company. When thinking about hiring staff and organizing the workforce, to be a good leader you will also need to relate to the wishes and abilities of your employees. Decide how to manage relationships with your employees. For example wages and salaries, insurance and contributions, as well as everything related to taxes.
- Investors will want to know if you can manage your business. Do you need to hire experienced managers right away? Will you keep some of the existing employees or will you hire new ones? And where can you find these potential employees?
- The "sponsors" will also want to know if your partners will work with you or if theirs is just a financial stake. Your schedule will need to specify key roles and people. Positions such as President, Deputy, Chief Financial Officer, and various Division Managers will need to be well defined.
Step 5. Define your marketing plan
One of the most common flaws in planning is the business owner's inability to describe exactly how customers are expected to be reached and how the product will be presented to them. Potential investors, staff and business partners will not be convinced that you are in a good mood until you have defined accurate and effective methods of contacting customers - and you will reassure them that once you reach them, you will be able to convince them to buy the product or service.
- Evaluate how you can reach customers. What will you tell them to persuade them and convince them that your product or service is better, more on time, more useful etc. compared to competing products? If there are still no competing products, how will you be able to properly explain the use and usefulness of your product in relation to the customer's needs?
- What advertising and promotional initiatives will you take? For example, offers two for the price of one or freebies in boxes of children's cereal? Where can you find the largest concentration of children under eight or any group that makes up your market?
Step 6. Build a dynamic sales force
The word "sales" affects everything that has to do with making contact with potential customers, once you have established how to reach them through your marketing strategy. In a nutshell, this part of business planning has to do with attracting customers and selling them products and services.
What will your basic sales philosophy be? Build long-term relationships with a few important customers or develop a short-term but large customer base?
Method 3 of 3: Write the Business Plan
Step 1. Organize all the information in your possession on the company activity
Start by creating the headings of the different sections and entering the approved information under each chapter:
- Heading and Contents Index
- Project Summary, a summary of the company vision
- General Description of the Company, in which you will offer a general view of the company and the services offered to the market
- Products and Services, in which you will describe, in detail, the specifics of your product or service
- Marketing Plan, in which you will describe how you can bring the product to your customers
- Operating Plan, in which you will describe how the company will operate day by day
- Management and Organization, in which you will describe the structure of the organization and the philosophy that will guide it
- Financial Planning, in which you will describe the financial structure and the requests for needs with respect to the lenders
Step 2. Keep the project summary for last
The project summary is basically what will appeal to investors, or whoever will read the business plan, and should summarize and explain the strength of your business and product model. It should be more concerned with the general vision of the business and the objectives to be achieved than with the operational details.
Step 3. Collect all the information gathered and prepare some drafts
After doing some hard research, it's time to choose the business, set goals accurately, and try to sell the project. It's time to organize the business plan and articulate all aspects and all your ideas, research, hard work into a comprehensive description of the facility and service.
At first, don't worry too much about upper and lower case, punctuation or grammar. All you have to do is come up with some good ideas and write them down. Once you have a general idea, you can invest the time by reading the plan and correcting any errors. Also find someone else to double check and give you advice
Step 4. Sell yourself and your business
The purpose of the business plan is to present you in the best possible light. The talent, experience and enthusiasm you bring to your business are unique. They provide some of the most compelling reasons for an investor to decide to finance your project. Keep in mind that investors invest in people more than ideas. Even if your potential business has a lot of competition or isn't in the most cutting-edge industry, the qualifications and commitment shown in your business plan could convince others to offer their support.
Your resume will be included in the appendix placed at the end of the plan, so this is not the place to list all the jobs you have done so far or the fact that you may have a major in Art History, especially if these experiences do not express your skills to get your business started. Don't underestimate, however, the impact of certain parts of your background that may even seem unrelated to your new venture. Focus on teamwork, leadership experiences and value your achievements at all levels
Step 5. Present and illustrate the financial aspects of the project
How are you going to get other people to invest in your project? By offering clear, transparent and realistic financial information that implies that you know what you are talking about and have nothing to hide.
The accuracy of your numbers and financial projections is absolutely crucial to convincing investors, financial institutions and associates that your business idea deserves to be funded. The data must also be meticulously verified and extremely clear
Advice
- On the Internet there are some archives of business plans that of companies that have been successful and have penetrated the market on the basis of a well-defined operational and marketing plan. Take the time to study the market by observing the behavior of a successful company and consider what your company can offer that can distinguish its product service from others. You made sure your business is competitive.
- You can find many sources of information for your business plan. The local library and the internet are always useful resources. If you live near a university, you may be able to ask for an appointment with one of the professors. He may be able to give you useful opinions.
- Make sure you mention the source of your information. This way you will find support for any type of statistic you put into your business plan.
- Small Business Administration is a useful resource for obtaining information; many other countries have similar resources, sometimes financed by the government; seek help on the Internet.
