Business plan: what is it and how to do it?

Por: Pedro Ferreira - August 18, 2022

Business plan: what is it and how to do it?

If a person has a vision problem , it is very likely that glasses will help him to have better vision and, therefore, a better quality of life and, consequently, he can work longer. The same applies to a visually impaired driver: glasses can prolong his or her life and other people on the road will be safer too . If you are an entrepreneur , your employees will be more productive if they can get a sense of the company's mission and values and if they are sure where they are going and what steps to take towards growth . But for this to happen, the entrepreneur needs to have his glasses, meaning, the tool that helps him to improve the business vision and better orient himself: the business plan. So, what is it and how to do it?

What is a business plan?

A business plan is a document that defines in detail a company's objectives and how it plans to achieve its goals. It is this plan that sets out a written roadmap for the company to follow as it relates to its financial and operational life. But more than that, a business plan is used to attract investment before a company has established a proven track record. Not to mention that it can also serve to keep the executive team of a company in tune with regard to strategic actions to meet the established goals.

One of the main reasons for fleshing out a business plan is to allow owners to have a clear picture of the objectives, goals, resources, potential costs, and advantages and disadvantages of certain business decisions , before and after implementing them . It also allows owners to design the type of financing needed to get their business up and running. This is why, above all, a business plan should not be a static document. As the business grows and changes, so should the business plan, thus allowing an opportunity to assess the plan's capability and help the business grow.

Why should you create a business plan?

There are benefits of creating a good business plan. This includes being able to think of ideas before investing a lot of money in them and anticipating possible obstacles to overcome in order to succeed. A good business plan should outline all the projected costs and potential pitfalls of every decision a business owner makes.

How to make a business plan?

A well thought out and well written business plan can be of enormous value to a company. It should include an overview and, if possible, details of the sector the business will be a part of , and it should explain how the business will distinguish itself from its competitors. One must be formulated in a clear and understandable way so that any person can understand the main idea. You have to be very careful with the language so that it is uniform and very well reviewed.

How to structure?

Although there are no mandatory rules for its structure, it is important that the business plan has a clear structure . This, however, does not mean that when writing a business plan it is necessary to strictly adhere to a specific business plan outline or template. Use only the sections that make the most sense for the specifics of your business and your needs. Therefore, we can suggest the following sections:

Idea, offer and target group

The initial part of the business plan text begins with a chapter in which the business project is explained in more detail. What problem does your idea solve and how? In this field, you must describe your product and your offer, formulated in the most concrete and exact way possible and adapted to your target group , highlighting the innovative aspects . If there is any particularly interesting aspect of the business, it should be highlighted and used to enhance the attractiveness of the business.

Market and competition analysis

How big is your market? Who are your competitors? What can be difficult when starting out in the market? What does your business add to the market? A significant part of the business plan deals with market and competitive analysis. Knowing the industry and the market is extremely important. A proper market analysis shows with solid facts and figures whether or not the planned business can be successful.

Vision and goals

Your business is still more of an idea than anything else, so you must put in a lot of effort and time to outline a clear vision as well as your goals. Where should you go in terms of your business model, how your business should develop and in what timeframe you want to establish yourself in the market.

There is no business plan without marketing

No company works without proper marketing. Define the channels you will use and even the partnerships that you will need to establish yourself in the market . Identify the strategy to use to position yourself in the market. How will you convince your customers? What measures will ensure growth?

Founder Team and organization

How is it organized, what structures do you want to build, who is already there, who should be added. In this section the entire team and the company´s organigram are presented. The founder's personality is essential to success. In addition to motivation, this chapter should also contain the technical and business skills that founders bring with them.

Financial plan

Serious financial planning is the foundation of a business plan. It is important to demonstrate the financial means available and how much capital is needed. In addition, all costs are listed as well as a liquidity forecast. Particular attention should be paid to the profitability plan and the investment plan. A complete business plan should also include a set of financial projections for the business that convey a clear idea of how the company will achieve the desired profitability.

Analysis of strong and weak points

It seeks to honestly show its strengths, but also its weaknesses, formulating opportunities and risks and showing how you want to control weaknesses. A good entrepreneur must be aware of the opportunities, but also the risks. Therefore, at this stage of the business plan it is important to make a realistic assessment of the chances of success.

Executive summary

he executive summary summarizes all the essential content of the plan, it should be written at the end of the business plan, but it is then placed at the beginning of the plan. Approximately one or two pages long, it gives the reader an overview of the initial project.

Remember that markets and the economy can also change and that without giving flexibility to your plan, you may not be able to switch to a new course that guarantees the success of your venture. It is necessary to understand that even if you have a good business plan, a company can still go bankrupt, however strong leadership focused on the plan is always a good strategy.

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