First of all, making a business plan is necessary before starting a business.
The business plan is essential for organizing your project and obtaining external financing.
The business plan is, therefore, the tool that:
- allows the presentation of the philosophy of the project,
- test financial assumptions.
In addition, the business plan must therefore be constructed professionally.
For example, it must consider the different financial, operational, legal, and tax assumptions. Neglecting a project component can turn out to be a thorn in the side of the project that will eventually lead to failure.
Most project leaders do not know how to write a business plan. Instead, they have an idea that they think is brilliant but have never put it to the test of numbers.
It is a question of demonstrating methodology and rigor to build a solid business plan.
First, an introduction to the business plan
After understanding the usefulness of a business plan, it’s time to get started!
To make a business plan, the introduction must contain an operational summary of the project. This is a short synthetic presentation that presents the project’s overall vision.
Which company? What activity? Which project? What market? Which competitors? Which product and service?
The drafting of this part of the business plan is an opportunity to break into the “Pitch” of the project. This part will be intended to convince investors, bankers, partners…
Then, present the team that carries the project in the business plan
Any project needs a team that has it and defends it. For the project to sell, this team must be highlighted in the document.
This part of the business plan answers the question, Who.
Who are the founders? What are their values? Why should we trust them? What are their backgrounds? Their skills? Their general training?
If there are several project promoters, the role of each in the general construction of the project should be specified.
Business plan, serious things begin… What market
The development of a business plan inevitably involves a market analysis.
Whether for a new and innovative offer or a classic and straightforward project, founders must know how to answer the following questions:
Example :
There are many private schools, but there are not enough that offer online courses… So my niche is to develop “Online.” I think it will work more as more and more people get used to distance learning.
Competitors are an essential part of the analysis. Is it consistent with presenting an existing offer at a price that cannot be challenged?
Who are the potential customers? Can they afford my service?
Before fixing its answers, it is necessary to analyze the offer available in the targeted market beforehand. The business plan must present a consistent proposal and respond to current market shortages.
With the development of communication tools, it has become easier to collect the opinions of potential customers through online questionnaires, for example.
Then, Present your marketing strategy
Marketers know this. A marketing strategy is a chain. The chain has the strength of the weakest link.
A marketing strategy must respond to the different components of the so-called marketing mix: the 4Ps.
First, P as price:
They must establish a list of products or business plan services that the company intends to market. Then, for each of these products, a pricing policy should be drawn up and contain: the sale price, commission rate, possible reduction, etc.
This grid will then facilitate the construction of the financial model.
Second, P as Product
The business plan must establish a list of products or services that the company intends to market. This is a catalog that presents each of the products:
- The technical characteristics;
- The packaging, if any, and the offers;
- Differentiation from the competition.
Third, P like Place
The distribution strategy is an essential component to define. It is necessary to know, for example, if the company will have points of sale or wholesale distributors? If it opts for online marketing?
Finally, P for Promotion
It’s about knowing how you will make your project known to potential customers (Facebook advertising, influencer marketing, spots on YouTube, participation in trade shows, phone calls, etc.).
Indeed, it is necessary to present this product promotion policy in the business plan.
Click here for more information visit https://www.mbplans.com/
Business Plan – The last step, the financial plan
It is customary for project leaders to confuse the business plan with the financial plan. The financial plan, it will be understood, is only the last step.
Now that we have understood how to write a business plan in the different stages,
The financial plan makes it possible to determine and validate the economic model.
These include, in particular, the following:
- The forecast turnover table: Based on the elements indicated in the commercial strategy, a forecast of sales over the next 3 or 5 years is drawn up;
- The table of purchase costs: To achieve the turnover, what materials, supplies, and goods to buy and at what price;
- Table of fixed costs, which includes, for example, Salary costs, rent of premises, water/electricity, telephone, promotional costs
- Provisional profit and loss account, which is a table summarizing the various hypotheses and determining a provisional result;
- Financing plan: depending on investors’ contributions, determine the amount of credit that the company will need.
But still,
Finally, the business plan will have to undergo a stress test of these hypotheses. This test consists of:
- Determine the fundamental assumptions that could impact the success of the project (up to what level of sales the project remains profitable);
- What is the minimum funding needed to set up the project;
The business plan allows at this stage to determine:
- All the needs necessary to start the project;
- The resources are already available (self-financing, for example).
The difference determines the need for bank financing (or external capital). It’s time to get your funding.
In conclusion,
- The business plan is based on reliable business assumptions
- Do not overlook any financial or tax assumptions
Click here to read more articles