Guide and tips for developing a business plan
Any company has a long way to go from the idea from which it springs to success. In this itinerary, there is a map that serves as a fundamental guide: the business plan. We explain to you what this tool consists of and how to do it so that it can be really useful when it comes to set achievable objectives.
When talking about successful entrepreneurs, the focus is always on the new idea on which their business is based. But ideas are of little use if you don’t know how to develop them. How the start-up of the company is financed, whether it aspires to become an SME or a large multinational, what income will be obtained, what growth objectives must be achieved to make it viable, what phases must be completed and in what time frames, what personnel is needed… All this and much more is included in a good business plan.
This map is very useful when looking for investors and financing because it helps to present the guidelines and the potential viability of a business. But it is even more important for the entrepreneurs themselves because it helps them to think about the management challenges they will have to face and how they want to solve them in order to reach their goals. That’s why it’s essential, to be honest in your work and to set realistic goals. These tips can be very helpful in writing it up
A good plan: complete and systematized
Although there is some flexibility in its development to allow it to be adapted to very different types of business, the model of a good business plan is already very systematized. The concepts and general lines that must be included are valid for all types of projects and allow a complete overview to be given to potential investors or to financial institutions that, like Bankia, finance the venture. A good business plan must be complete and respond to this systematized model, including the following chapters:
Executive summary: always leads the business plan, but is written at the end, when the other chapters are already clear. This is only logical, because it is, after all, a shortened version of what will be explained later. The concision is essential to put in a few words the keys that sustain the project.
Description of the activity. The product or service that is offered is the axis around which the future of the business revolves and must be explained in detail. Its usefulness to the consumer, the origin of the idea, the target audience and what needs it can meet are key issues. It is not so much a question of the technical characteristics of the product or service as of its value to its potential users.
Competition and market. It can happen that the product or service offered is so innovative that there is none like it: in this case, it will be necessary to focus on the capacity of the market to accept it. The other option is that competition does exist: it will be necessary to explain whether there is a gap for another product of the same type, whether it is going to focus on a specific segment, whether it is a question of taking advantage of a geographical environment with demand…
In this chapter, it is useful to start presenting numbers with market studies, their evolution, the costs of the distribution channel, etc.
Marketing, marketing, and sales. If the previous chapter identified a potential market, explain the strategy for accessing it. Prices, advertising strategies, sales channels and techniques, promotions, loyalty, commercial network…
Business model and financing. If the other chapters are well constructed, it is logical to think that the company will be viable. The necessary question is: When? Revenues and expenses change over time and it is necessary to detail, on the basis of reasoned and honest calculations, how they will change during the first two years of the project. In addition, it is necessary to consider how it will be financed until economic viability is achieved. And one more detail, very important when looking for investors: what will be the valuation of the company in each phase of the process and how is the disinvestment contemplated for those who contribute capital in search of profitability.
Personnel. The promoters of the project, their professional career, their successes and previous experiences, are information that any recipient of the business plan will want to know. But this is only part of the story: how much staff the project will need, what profiles, in what phases, where they will be sought and how they will be attracted are other issues to be included in the document.
Developmental stage. Before putting an end to the document, a chapter should be devoted to explaining what stage the project is at. Whether you have already achieved partial targets and to what extent the objectives have been met. Locate where the company is currently located.
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