[toc] When creating a business, the question arises of its profitability, possible risks and many other nuances. Drawing up a special document, called a business plan, will allow not only to transfer an abstract idea onto paper, thereby materializing it, but also to obtain a response from investors.
The main tasks of business planning:
- Providing complete information about the project to outsiders (future employees, investors, various state organizations);
- Evaluation of the prospects of the future project (some successful ideas during overall view turn out to be completely unprofitable);
- Preliminary search of problems and ways of their solution (since the document implied the calculation of risks, the entrepreneur will immediately know what to do during their occurrence);
- Determination of the main indicators by which the cost-benefit ratio will be adjusted.
For some entrepreneurs, it seems that drafting a business plan is a simple task. It will be enough only to calculate all the incomes, possible losses and laconically expound the idea in order to achieve the location of investors. In practice, many newcomers do not even know how to start a document and what are the requirements for it.
In order to create a successful idea, skills of creative thinking and the ability to find ways out of extraordinary situations will be useful. A resource BrainApps will help to develop these functions, where a lot of effective games and professional articles are concentrated.
The first steps to drafting a business plan
The business plan shows the quantitative characteristics of the new business, but its creation can be a waste of time if the inexpediency of its implementation is initially understandable.
Before drafting up a business plan, an entrepreneur pays attention to the following nuances:
- Value of advantages and disadvantages of the future project (if the number of minuses exceeds the benefits, you should consider how to turn them into benefits or at least neutralize them);
- Studying of competitors and features of the market;
- Full consideration of sales, taking into account all possible factors affecting the stability of the need for a product or service;
- Payback on the enterprise and prospects for its future development;
- Approximate time of receiving the first profit (at the moment it is possible to calculate the amount that you initially need to invest in a project).
After taking into account all the above nuances, you can start drafting a business plan. The document does not have an unital determined structure since each entrepreneur creates a plan taking into account the individual characteristics of the enterprise.
General document requirements
The following principles of writing are applicable to any business plan, which the entrepreneur is obliged to adhere to. These include:
- The language of presentation of information should be simple and concise. The text should not contain long and difficult sentences for understanding.
- The size of the document may vary depending on the type of project, but in average it is recommended to draft 20-25 pages.
- The plan should include full information about the future project and all the necessary information that the investor can request.
- The document is drafted on the basis of real, not presupposed or invented facts. The plan should contain rational proposals, confirmed by appropriate calculations.
- The plan should clearly describe the main objectives of the enterprise and the basis on which they are built.
- The document must be systematic, and its individual points are interrelated. At the same time, an important feature of the plan is the complexity.
- The business plan necessarily indicates prospects for development of the project.
- The document should imply making corrections and additional recommendations that the investor or the entrepreneur himself can make.
- The plan clearly specifies ways to control work of the future project.
When creating a document, the entrepreneur should be as attentive as possible so as not to miss important details or make mistakes in calculations. Dealing with daily training sessions on BrainApps, a businessman can be confident in maintaining cognitive functions in a tone and gradually improving attention, memory, concentration and thinking.
Business plan structure and nuances of each section
The main document for the future business enterprise has certain sections, the presence of which are mandatory. An entrepreneur can add new categories if necessary, but the foundation always remains unchanged. It guarantees the availability of the full amount of information that may be useful to the investor.
Includes the following information:
- The name of the project and company that intends to implement it (indicate all available contact details);
- Data on the project manager and team;
- Business plan drafting date;
- Some, the most significant quantitative indicators (not necessarily).
Memorandum of confidentiality
This clause is written copyrights, which provides liability for non-compliance with the following requirements:
- Prohibition of document transfer to third parties;
- Prohibition to copy a document or duplicate its individual parts;
- Return of the document at the first request of the author;
- Prohibition of disclosure of information written in the plan.
With the help of a memorandum, an entrepreneur protects himself from plagiarism and can offer a project to several investors easily.
This section is one of the most important parts of the business plan, since the investor begins to study the document at this point. It should contain a summary of all subsequent sections and interest those, from whom future funding depends on.
The main idea of the project
In this section, the author provides arguments and facts that confirm the success of the future enterprise. He clearly describes the goals and objectives of the project, points out possible obstacles and ways to overcome it. The strengths and weaknesses of the enterprise (but not the provided product or service) are indicated. In average, the section volume does not exceed 2 pages.
The project essence
The most voluminous section of the document, which fully reveals the features of the future enterprise. Here it is necessary to describe the following:
- Main objectives of the project;
- Features of the consumer of the product or service;
- Factors ensuring success at the market;
- Description of the product or service (indicating strengths and weaknesses);
- Production stages;
- Characteristics of the company that is engaged in the project;
- Project cost with a clear investment schedule;
- Managerial section;
- Initial development costs of the business.
This section of the business plan is made after analyzing the situation on the market. The following nuances are indicated:
- The growth of the project industry and demand for a product or service;
- Evaluation of competitors;
- A comprehensive description of consumers;
- Impact of internal and external factors on the market;
- Suggested prospects.
Section, which describes effective ways to influence the consumer. Also, here are described the features of the market and methods for improving it. This includes: the organization of advertising, product design, pricing, service and constant monitoring of competitors.
In the business plan there must be an item detailing the creation of products. The investor should know where the raw materials, equipment, personnel and quantity needed are taken. The complexity of product creation and the ability to optimize production.
Plan for company
In this paragraph of the business plan, the company that implements the project is described in detail. They indicate the leaders, their subordinates. The way of company management, the interrelations between the divisions.
This section of the business plan is the most important for the investor, as it shows the profitability and stability of the future enterprise. The paragraph indicates all costs and revenues, prospective sources of capital formation and other features of financing.
Analysis of possible risks and ways to combat them
This section of the document takes into account problems that can lead to a decrease in the profit of the project or the suspension of its development. The entrepreneur studies the impact of all types of risk and suggests methods for their prevention. In addition, strategies are being developed to deal with emerging problems, especially those that are independent of the operation of the project. If possible, the causes of the minimum likelihood of occurrence of various risks.
The last item of the standard business plan includes various documents, references, tables and other specific data about the future project. The text of the document contains footnotes to the applications.
What mistakes are encountered when drafting a business plan?
Mistakes in business plans for beginners are made often enough. It is unlikely to avoid them at work, but the most common are:
- Lack of literacy. Even the most promising idea will not be appreciated if the document contains grammatical and punctuation mistakes and is also written without observing the style.
- Incorrect design. Potential investors will not look at every point, but the overall view of the document must comply with the standards adopted in the state. The whole plan is to be made in one style.
- Lack of important sections of the document. Since it is possible to write a full-fledged business plan only with availability of an exhaustive amount of information, its lack is the most common and gross mistake.
- Lack of clear facts. The plan should not resemble free writing style. Each proposal is drafted for some purpose and carries the necessary information.
- Overabundance of details. Despite the exhaustive description of the enterprise, the entrepreneur should not be distracted by details. If any item of the project requires a detailed description, it is rendered to applications.
- Lack of realism and lack of facts. The document is based on the assumptions of the creator, but each of them must be supported by real facts.
- Absence of an item about risks or competitors. Investors will immediately refuse to finance the project, where possible problems are not indicated and competitors are not described. The statement that such sections are not required, since the enterprise is 100% successful, indicates the incompetence of the entrepreneur.
Most of the mistakes are due to either a lack of experience, or poor attention. The BrainApps resource contains many games that develop this skill. After spending 15 minutes a day for training, the user will gradually forget about the presence of mistakes in any documents.
When creating a business plan, it is recommended to seek help from specialists. This allows you to reduce the burden on the entrepreneur, reduce the risk of errors, add a fresh perspective on the situation.