Monday Dec 06, 2021

Business plan – what it is and how to elaborate it professionally

There is a lot of information about what is a Business Plan, especially in these times where we can find a lot of information on the Internet.

Sample Business Plan Formulator This article is based on a Professional Business Plan developed by the Business Incubator of the Oxford University, which is one of the most prestigious private universities in the USA. Which is an institution in the highest ranking worldwide and number 1 in the USA for several years in the area of ​​Masters?

The reality is that there is no single format of Business Plan, each one can have variations, however, if there are points that all must include and serve, such as SWOT Analysis, Business Model, Financial Projection, which Are of paramount importance and basic for all Business Plan. In the same way, every plan may end up more expensive than another, this depends on the turn of the business for which it is being written, the magnitude of this among other factors.

The most important thing in a Business Plan is that it be elaborated under the following characteristics:

Professionally. That it be elaborated complete, without omitting points, well written, in order and thinking that this will be the first step of the future of a business.

Consciously. Each point must be drafted and revised as many times as necessary to finally have a quality and meaningful document.

With time. It is important to dedicate and invest so much time is necessary for the elaboration of the business plan avoiding at all costs to elaborate it fast and that important aspect are omitted since they can increase the possibilities of making mistakes.

Advice. It is advisable to be advised by another person for their support during the preparation and a final review. It can be someone related to the turn of the business or who has experience in the theoretical or commercial field.

What is the Business Plan?

Business plan The Business Plan is a document that serves as a guide for structuring, describing and analyzing the feasibility of a business that is intended to be undertaken.

This document will serve to analyze the external (competition, economic, etc.) and internal aspects (Capital, Infrastructure, Personnel, etc.) as well as to structure the idea and the organization that is intended to have and analyze from the point of view of Financial view the feasibility to finally know if the numbers go according to what is intended, make changes or make the relevant decisions according to the results and interests of the owners, partners or investors.

It is common to make a business plan not only for the owner to visualize the business but also on many occasions to present it to investors or banks from which it is sought to raise capital to start the business.

Download the EXAMPLE FORM OF BUSINESS PLAN

Below we will see how to do professionally and elaborate the Business Plan based on the model or format that we mentioned previously.

STRUCTURE OF THE BUSINESS PLAN

  1. Company Description

Describe in a single sentence what your company does. The description should be clear, concise and in simple terms that anyone who is not specialized in your turn can easily understand. Being the first thing an investor will read, the business concept must be clear, otherwise, the reader might lose interest.

If your product is innovative, we recommend adding an image that will make the definition of your company more illustrative.

  1. Proposed Value

2.1 Describe what problem (s) the customer is facing in the market to which you are focusing your business.

Write down what needs your client needs that are currently not being satisfied by any competitor in the market.

2.2 State how the customer (s) is currently working.

Write how your customer satisfies this need in the absence of being able to satisfy it in the market.

2.3 Specify how your proposal provides a solution to the needs of the consumer and how it adds value.

List specifically what features your product/service offers to meet that unmet need.

The added value lies in offering attributes that make up an advantage over your competition and that the customer perceives as such.

Make a list of such characteristics.

2.4 Describe the characteristics of the product/service and examples of use.

If your product is very innovative, it is important to explain in which cases it can be used.

  1. SWOT Analysis

This is a summary of the internal strengths and weaknesses of your company, as well as the opportunities and external threats that your company faces in the market and its competitive environment.

Each element of the SWOT analysis must be considered from the general business perspective.

It is important to do an initial SWOT, and as the subsequent sections of the business plan index are developed, you must review it to validate or modify points.

  1. Market Analysis

4.1 Description of the target market.

This section should describe the market to which you plan to sell your product/service.

It is important that you know how to differentiate that sometimes the end user of your product is not your target market. Example: My product are toys, my target market are toy distribution companies, while the end user is children from 0 to 12 years old.

Identifying your target market is the most important point of the business plan. If the identification of your target market is correct, it will lead to a correct sales projection, a core point that will demonstrate the business potential of your project.

4.2 Description of the historical market and/or potential markets

What is the history and forecasts of market growth?

Is there a trend that indicates that your project has the potential for success?

4.3 Competence

Main competitors that currently attack the market.

You must list your competitors both direct and indirect.

4.4 Competitive Advantages

How will the company compete in the market? Will it compete on price, service, quality, convenience, new features, and benefits, by focusing on a very specific market (niche), etc.? Is the difference with other products something that is really going to matter to your customer/buyer?

You should do benchmarking with your most important competitors in such a way that you analyze what you do better than them.

Competitive advantages should also be included as strengths in the SWOT analysis.

4.5 Synthesis of a commercial or market introduction plan.

What is the marketing strategy for your products?, In which benefit or the main attribute will you focus?

How will you make known the existence of your products to your customers?

Will there be any marketing approach or assistance specifically directed at your intermediaries – such as distributors?

Explain that you can expect results from the marketing plan and how you plan to monitor and control the effort to ensure its effectiveness.

4.6 Relationship with current and potential clients.

Do you have an alliance with a client? What stage is it in?

4.7 Estimated market size and estimated share (volume, value, geography, niches, etc.).

How big is the target market and how can you segment it in sectors?

Which segments or sectors do you plan to attack together or in phases?

So what will be the part of the target market that your company will attack?

4.8 Estimated amount of sales.

The previously developed points of this Market Analysis should be the sustenance and justification of the projection of sales.

You must project sales conservatively and realistically.

  1. Business model

5.1 Revenue model

Describe the way or process in which your business will generate wealth.

5.2 Pricing

At what price will you sell your products and what is the strategy behind this price?

Describe any commission/price of wholesale and/or retail distributors.

Check out why the market will accept the price and buy your product or service.

5.3 Process of production of the product, or execution of the service.

In the case of products:

Explain what your production strategy will be – Do you plan to build your own production money, outsource one, outsource whole production or lease technology?

Describe where the production will take place and in the case of subcontracting, define who will do it and a general profile of that company (s), as well as why you chose them.

Describe the physical production process using a flowchart.

In the case of services:

Explain what your service execution strategy will be. Will your company carry out the entire service execution process? Will you subcontract any part of the process? What profile will the subcontracted company have and what will its functions be?

Describe where the service will take place Will it be at the customer’s premises? Will it be in your facility?

Describes the process of executing the service using a flowchart.

5.4 Sales model and distribution

Explain how you are going to provide the product to your customers – sales by each sector.

If you need a sales force, will you develop it or have you identified any sales organization that you can subcontract/associate with?

Where will your products and raw materials be stored? How will your products arrive at the final customer in a physical way? Will you use a shipping company? Will you hire a company that provides you with a complete sales and distribution solution?

What are the payment terms per distributor/sales channel/end customer? Counting, credit or both and in what proportion?

  1. Administrative Analysis

6.1 Founders and Management Team

Explain who is involved, what their positions are, and add a brief resume emphasizing their experience and relevance.

Do you have some non-executive mentors or mentors who add value to the management team, and who provide greater confidence to potential investors through their experience and knowledge, whether industry experts or people with general business experience? Make a list with a brief professional biography emphasizing your experience and relevance.

6.2 Integration of the Board of Directors

List your counselors and if necessary, add a brief description emphasizing your experience and relevance.

6.3 Organizational Chart

What is the right organizational structure for your business?Legal Analysis

  1. Legal Framework

It defines whether you will operate as a natural person or whether you will constitute a partnership or civil society or commercial company.

7.2 Required Contracts

List what type of contracts your company will require in order to operate with greater legal certainty.

7.3 Special Permits / Licenses

List what kind of permits or licenses your company will require in order to operate.

They can be municipal, state, federal or specialized agencies.

7.4 Intellectual Property

Are patents or trademark registrations involved or required? In which process do you find yourself?

  1. Financial Analysis

This section will provide an Excel format so you can make your financial projections with greater ease.

The numbers should show the potential investor that you understand the main financial consequences of your project, that the assumptions/variables are reasonable and that you are not being too optimistic.

Cash Flow (3 years)

Two Excel tables are presented. The first will show the cash flow for the first 12 months, the second will show the annualized cash flow from year 1 to 3.

Income statement (3 years)

An Excel table is presented, showing the annualized summary of the income statement from years 1 to 3.

Balance Sheet (3 years)

An Excel table is presented, showing the general balance of year 1 to 3.

Financial reasons

The following are presented: Internal Rate of Return (IRR), Net Present Value (NPV) and Payback (Investment Recovery Time)

Proposal of participation to investors

– What percentage are you offering, in terms of participation (shares) in the company in exchange for the money?

– What do you expect investors to receive in return for risking their money?

– Do you expect that there will be another round of financing? What will be the number of actions to float in this phase and what security can you provide to the current potential investor that their participation will not be diluted negatively?

Outcome scheme for investors

– How do you expect investors to get their return on investment – profit and when?

– Will it be through a repurchase of shares by management in the medium term or seek continuous independent growth and a very long-term investor?

Download the file to make the financial projections:

Financial Projections Format

  1. ANNEXES

We suggest you include the following:

Copies of letters of intent.

Full Illustrative Financial Projections (Excel File).

A copy of the proposed shareholder’s agreement.

  1. EXECUTIVE SUMMARY

The executive summary is the most important part of your business plan. Many people will only read this. The executive summary itself will not ensure that you get the investor, but you could ensure that you lose it.

Quality – The quality of the abstract should be incredible, and a lot of attention will have to be paid. Get constructive criticism of this summary of as many sources as you can.

Independent – It is also used as a separate document when you introduce the project to others, so you should be able to capture the interest and engage the reader so that you want to go to the next step and ask for more information.

Style – Concise and strong. It should be straight to the point and organized into a series of bulleted paragraphs, each explaining a key area. No jumps.

Size – Definitely maximum two pages.

It should contain:

Company description.

Team Profile.

Brief market analysis.

Business opportunity

Monthly Cash Flow Year 1.

Income statement year 1 to 3.

Profitability analysis (IRR, VPN, Payback).

Initial investment and proposal of participation to investors.

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