12 minutes of reading
How to make a business plan
Let's analyze what a business plan is and what it is eaten with.
Content
21.11.2023
How to make a business plan
A business plan is a document that describes a business idea and a strategy for its implementation. It helps an entrepreneur to assess their capabilities, identify potential risks and make informed decisions.
Drafting this document is mandatory if you want to take out a loan or cooperate with investors: this way they will be able to see the whole picture of your idea and the necessary costs.
Drafting this document is mandatory if you want to take out a loan or cooperate with investors: this way they will be able to see the whole picture of your idea and the necessary costs.
How to get started?
Here are a few points that must be done before drawing up a business plan:
1. Study the market
When making up ideas, do not forget to probe the ground for their implementation. Study your competitors and analyze the demand for your product or service in your region. This will help you understand how successful your project can be.
If you are going to open a local business, and there are no direct analogues of your idea in the city (this is a good sign!) – explore how things are in regions with similar economic conditions and populations.
If you are going to open a local business, and there are no direct analogues of your idea in the city (this is a good sign!) – explore how things are in regions with similar economic conditions and populations.
2. Choose a franchise
A franchise is the transfer of rights to any type of activity and the use of a developed business model from one company to another. This is an optional item if you want to work from scratch and on your own, but a great way to give yourself a good start and avoid a lot of mistakes. We talked more about choosing and working with a franchise in our series of articles.
3. Formulate goals
Surely you have already heard about SMART – a universal and effective goal setting scheme. It will help to concretize your goals, because it will be more convenient to draw up an implementation plan for concrete ones.
The SMART goal setting technique is universal. We recommend using it in all aspects of your business to plan and develop as efficiently as possible.
For example, we have the idea of "opening a service center". Let's turn it into a goal with SMART. This scheme is divided into five blocks:
- Specific (specific). What result will we achieve and by what means?
- Measurable (measurable). What results will we get in quantitative terms?
- Achievable (achievable). Is it realistic to achieve such results with the available resources?
- Relevant (corresponds to interests). Why do we need this? Do customers need it?
- Time bound (limited by time limits). In what specific time should we achieve a result?
Here's what we got: to open a service center for the repair of Apple equipment in the Northern district with an income of 200 thousand rubles per month.
This goal is more precise: it covers all the main aspects of the future project, and it will be easier to start from it when drawing up a business plan.
For the formulation, we analyzed the nearest competitors and their approximate incomes, and found the best area to open our business, that is, we have already conducted a superficial analysis of the market and outlined the general features of what we want to get. Now we can finally proceed to the business plan.
This goal is more precise: it covers all the main aspects of the future project, and it will be easier to start from it when drawing up a business plan.
For the formulation, we analyzed the nearest competitors and their approximate incomes, and found the best area to open our business, that is, we have already conducted a superficial analysis of the market and outlined the general features of what we want to get. Now we can finally proceed to the business plan.
What does a business plan consist of?
There is no single standard for this document: there are many variations of its content, and each company decides for itself which items to include in its own. But Russian companies most often work with the UNIDO standard. That's what it consists of:
- Resume;
- Product or service Description;
- Market Analysis;
- Marketing and Sales;
- Production plan;
- Financial plan;
- Organizational plan;
- Risk assessment;
- Application.
Let's consider each item in detail.
1. Resume
Resume is the “face" of your business plan. It should include general brief abstracts of the entire document and answer the question “What is it and how will it work?”.
Write down why you took up this idea, what problems it solves and how you plan to develop in the market. It is also worth describing the target audience, advertising, and be sure to include information about the start-up capital and payback periods.
It is advisable to put all the main theses in the first paragraph. It will quickly bring readers – investors, bank employees or your colleagues – up to date and set the pace for all work. This is often where investors decide whether your project is worth it.
Write down why you took up this idea, what problems it solves and how you plan to develop in the market. It is also worth describing the target audience, advertising, and be sure to include information about the start-up capital and payback periods.
It is advisable to put all the main theses in the first paragraph. It will quickly bring readers – investors, bank employees or your colleagues – up to date and set the pace for all work. This is often where investors decide whether your project is worth it.
We recommend starting to write a resume after compiling all the other items – this way it will be easier to collect and describe the general thesis of the work.
2. Product or service Description
Describe your product or service in detail. Focus on the advantages of your idea: how is it better than the competition? Why should customers go to you? Think about all stages of the life cycle and production of your product, and offer the most effective solutions.
It is also worth mentioning the factors that will affect production and how you will deal with them. The whole process of creating and providing a product or service should be transparent and understandable to the reader.
It is also worth mentioning the factors that will affect production and how you will deal with them. The whole process of creating and providing a product or service should be transparent and understandable to the reader.
Здесь же можно описать интеллектуальную собственность, если в вашем бизнесе встаёт такой вопрос. Укажите, за кем остаётся авторское право и что может считаться коммерческой тайной.
3. Market Analysis
This section describes the state of your industry, development prospects and factors affecting the market. Here you need to describe the volume of the market and calculate what share you can claim.
Start with the global market of your industry: the general dynamics and trends affect all local enterprises in one way or another. Taking into account global trends will immediately show investors that you are keeping up with the times and that your project has potential.
But if you are going to start a business inside the country, it is important to describe the Russian market with its features and how these features can play into your hands.
Start with the global market of your industry: the general dynamics and trends affect all local enterprises in one way or another. Taking into account global trends will immediately show investors that you are keeping up with the times and that your project has potential.
But if you are going to start a business inside the country, it is important to describe the Russian market with its features and how these features can play into your hands.
Главная задача этого пункта – ответить на вопрос "почему мой бизнес будет успешным?", используя статистику и факты о настоящем положении дел на рынке.
4. Marketing and Sales
This is a plan to promote your business. Several strategies are considered here at once: market penetration, development, sales and marketing.
Starting from the target audience (it also needs to be described), list the channels for promoting your product or service. These can be promotional materials, social networks, work with the media or joint events with partners. We recommend combining them all.
It is also important to describe the pricing strategy here – what the price of a product will be, what it depends on and how it can change.
If your business involves a sales department, describe how many people will work there, what their salary will be, how you are going to train them and what resources are needed for this.
Starting from the target audience (it also needs to be described), list the channels for promoting your product or service. These can be promotional materials, social networks, work with the media or joint events with partners. We recommend combining them all.
It is also important to describe the pricing strategy here – what the price of a product will be, what it depends on and how it can change.
If your business involves a sales department, describe how many people will work there, what their salary will be, how you are going to train them and what resources are needed for this.
Business will pay off faster together with a competent development and advertising strategy.
Sales can be stimulated by promotions, club cards and discounts for regular customers. Think about which method you will use.
5. Production plan
This section tells about the entire production cycle of a product or service. Tell us about all its stages – from the purchase of raw materials to delivery to the client.
A detailed production plan includes a description of the necessary equipment, a production schedule, a plan for the purchase of raw materials, quality control and waste disposal.
A detailed production plan includes a description of the necessary equipment, a production schedule, a plan for the purchase of raw materials, quality control and waste disposal.
Включайте информацию о сотрудниках во все этапы бизнес-плана: планируемое количество и заработная плата.
6. Organizational plan
This section is about the organization of the structure of your business: about employees, founders and everyone who will be involved in it. If you haven't found people yet, describe how you imagine the structure of your project in the future.
The composition and positions of your team should be described in detail here. How many managers and employees of all branches of your project will be needed.
The requirements for employees should also be announced: education, seniority and personal achievements in accordance with their tasks. Don't set the bar too high, but let the reader know that the desired team will do its job.
The composition and positions of your team should be described in detail here. How many managers and employees of all branches of your project will be needed.
The requirements for employees should also be announced: education, seniority and personal achievements in accordance with their tasks. Don't set the bar too high, but let the reader know that the desired team will do its job.
Write about external experts – if you need them. The organizational plan should include all the necessary human resources.
7. Financial plan
The financial plan summarizes the previous ones and provides information not only on the cost of all sections of your business, but also on all possible sources of financing – even one-time and temporary.
Consider your funds and the funds that you plan to borrow and receive, for example, from investors or with the help of a state support program for small businesses. Calculate the price and cost of your product or service and provide all this information in the most understandable language.
Consider your funds and the funds that you plan to borrow and receive, for example, from investors or with the help of a state support program for small businesses. Calculate the price and cost of your product or service and provide all this information in the most understandable language.
And do not forget about taxes!
When calculating the cost, consider:
- Direct costs: raw materials and packaging;
- Indirect costs: rent of premises and equipment, utilities, marketing;
- Salary to employees.
All these items need to be added up and divided by the number of goods or services that you plan to sell or provide in a month – and you will get an approximate cost of your product. From this figure, you can plan the further development of your business.
8. Risk assessment
This paragraph describes any risks and possible force majeure at all stages of the implementation of a business project, and offers their solution.
So, naming the nuances that affect the work and effectiveness of the project, you should describe the factors on which they depend and suggest an action plan for a potential crisis situation.
So, naming the nuances that affect the work and effectiveness of the project, you should describe the factors on which they depend and suggest an action plan for a potential crisis situation.
The main task of this section is to show that you are ready for everything and know what to do if something goes wrong.
9. Application
The last and optional section of any document is also valid for the business plan. Here you can attach any additional and useful information confirming the above.
The application can include product photos, legal documents, your market analysis and brief information about you as a chief executive.
The application can include product photos, legal documents, your market analysis and brief information about you as a chief executive.
General tips
1. Less words – more business
Be brief. Especially in the resume – it is by it that investors determine the value of all further work. Bring to the fore the advantages and good sides of your business, but do not omit the disadvantages: suggest ways to solve them.
2. Attract specialists
Some points of the plan may sound complicated and vague, especially if you are not an expert. If you are not sure about your calculations, it is better to ask for help from specialists. This way the plan will be more accurate and will avoid unnecessary costs.
3. 30 pages is the limit
The entire document should be at least 20 pages long, but you should not spread out for the sake of volume. Write fully and clearly, make the information as accessible as possible – and your business plan will be read. This implies the following point:
4. Illustrate the information
The main rules of the business plan: clear vocabulary and visual facts. For a better perception of information (especially if there is a lot of it), illustrate what you are writing about. For example, the hierarchy of the team in the “organizational plan” item can be shown by a tree diagram, and the development and financial component can be shown by diagrams.
5. Be flexible (advice for the future)
And make flexible plans. Market trends, the economy and the situation in the world are constantly changing, and your plan should be ready to change with them. Even in conditions of stability, the plan should be subject to adjustment depending on the results of the work. Experiment and try to achieve maximum efficiency.
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