The business plan is a tool of fundamental importance and extraordinary usefulness both for entrepreneurs who intend to start a new business activity and for those who have already opened it but want to develop a growth path. An excellent business plan must be a point of reference for the entrepreneur and a tool capable of measuring the growth of the company. Financial hedges, cash flows, business growth planning, financing programming and monitoring of the processes carried out. In this article we will talk about business plans, with particular reference to the help it can provide to new entrepreneurs in focusing their attention on business, to draw a guideline during the company’s growth path, to acquire awareness of products and services.
Make the business plan before starting a business
I know two reasons why a person decides to open a business: the first, and perhaps the most common, is the one that opens a business because there is no job and, therefore, rather than continuing to send CVs that nobody he will never read, he decides to do business; the second is that which is strongly believed in business and the time has come to make a dream come true that for years had been crammed into a drawer. Regardless of the fact that opening a business is a choice or a condition, a preliminary planning activity is necessary, without which the risk of failure is very high.
Of course, there are many companies that arise spontaneously, that take root and manage to achieve success. In these circumstances we go on thanks to the intuition of the entrepreneur, the so-called nose . But in a good entrepreneur, intuition is not enough. Intuition must necessarily follow the appropriate investigations, analyzes and reflections.
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Plan the birth of a business in extremely synthetic words, it means concentrating on the business, assessing its risks, opportunities, threats, strengths, forecasting sales, estimating costs, analyzing the market, defining marketing strategies. All this must be understood before even having made the decision to open a business. And that’s not all. An asset, economic and financial plan covering a period of at least five years must be prepared. All of this is called a business plan.
Who prepares the business plan?
Stuff for accountants and accountants? Surely. But the business plan is also stuff for entrepreneurs and managers: the only ones who are aware of the business idea, their talent and intuitions. With the business plan, in fact, you are able to evaluate your entrepreneurial attitude, fine-tune the business idea and convince any shareholders and potential investors. It is not a document with a predefined or standard structure. The editorial style and its shape depend a lot on the entrepreneur and the type of company you want to start. Same goes for content and length.
So, briefly summarizing: the business plan is a document to be written absolutely before starting a business, which allows you to assess whether the activity you want to undertake involves more risk than revenue and whether it will be possible to cover any losses without going bankrupt.
Business plan content
It should be noted that the business plan must contain only real and uninflected data . For example, if the analysis shows the first year of the loss-making activity, it is important that this is highlighted so that the necessary hedges can be identified. Writing a business plan with untruthful data mainly means deceiving yourself and wasting the greatest opportunity to plan the success of the business.
To be effective, the business plan must be credible, demonstrate in-depth knowledge of the market, demonstrate ability to find the necessary funding. The content must be easy to read, clear and simple, with concrete and useful data, well-defined objectives and already established roles and skills.
First step: clear ideas
Therefore, before starting to write a business plan, you need to have clear ideas. First of all, clearly identify the recipients of the document: it is one thing to write it for yourself, it is another to write it to get funding. First of all, therefore, it is necessary to establish the objectives to be achieved. The recipients, in fact, can be multiple:
- themselves , in order to verify the performance of the company;
- potential shareholders , who may be interested in entering the business of the company;
- lenders , called to provide the necessary capital;
- public institutions , to obtain grants or subsidized rate loans.
Depending on the recipient’s purpose, the business plans can take different forms and contents.
Length of the business plan
A good business plan is not completed in half a day. Often months of work are needed : the necessary research, market analysis and the necessary capital must be conducted. Activities that require time.
If it is true that there are no rules for the compilation of the business idea, it is common opinion that a good business plan is between 15 and 20 pages and, in any case, never more than fifty pages. Generally it is composed of a descriptive part and an analytical part . Within this, the business idea and the operating model must be indicated of the company, with particular indication of the resources necessary to launch and manage the business.
Business plan sections
The sections that usually make up the business plan are as follows:
- executive summary : it briefly describes the project and the objectives to be achieved;
- market analysis : describes the market and the sector in which you want to enter;
- products and services : describes the characteristics of the commercial offer;
- business management : describes the corporate structure in all its parts;
- marketing plan : describes the characteristics of the brand and corporate communication and defines the promotional activities;
- balance sheet : it is a very important part of the business plan and reports the company’s assets, economic and financial data over a five-year period.
Business plan models
Writing a whole from scratch, looking at a blank sheet of paper, is not a very simple thing. Very often it is not known how to start, some topic to insert first, which prospects and graphs offer a better impact. The suggestion, therefore, is to resort to business plan models to be compiled. These are already compiled files which facilitate the entrepreneur to present his business idea and facilitate the preparation of the business plan. In this way you will be able to have the maximum result with the minimum effort, a professional and complete product (without the risk of forgetting important data or information).