A business plan is a document that describes all major aspects of business activity, analyzed the main problems facing the entrepreneur, and identifies the main ways of solving these problems.
Do not think that a business plan is only necessary for large enterprises organize their business in a big way. As world practice shows, it is necessary for all enterprises. And, above all, in order to carefully analyze their ideas, test their reasonableness, realism, and thereby reduce the risk of failure. In addition, the business plan is required to represent those who have a company is going to borrow money or other property for the project, to confirm the correctness planned business and ability to repay the loan, leased property.
Depending on the specific nature and terms of future activity – the volume of production, type of product (service), its novelty, etc. – the composition and structure of the business plan may vary significantly, but substantial side should be the same. Typically, a business plan consists of the following sections: Executive summary, description of the product / service, market analysis, evaluation of competitors, marketing strategy, production plan, organizational and financial plans.
Many lenders and investors like to read a summary of the business plan, i.e. summary, the volume of which does not exceed two pages. This gives them the opportunity to see the important features and benefits of this project over other projects. Content summary the investor often judge about whether he should waste time and read the business plan before the end, so you need very clearly and convincingly Express the main provisions of the proposed project that creditors and investors have been able to get answers to the questions: “What they will receive in case of successful implementation of this business plan?” and “What is the risk of loss of their money?”
To answer the questions posed in this section of the business plan determines all directions and spheres of activity of the firm. The boundaries of the spheres can be produced products, existing market segments and technological capabilities of the firm. After identifying the areas and activities for each firm sets goals to which it aspires. These goals can be to increase the percentage of firms in established markets to a certain value or increase in total sales in several times, increasing the growth of net income, the increase in the share of services or improving product quality and reducing the duration of development of new products, penetrate markets and the displacement of old products.
At the end of the summary reflected the financial results expected from the project in the future. It should be noted that summary is prepared after the preparation of the business plan.
Description of product (service)
The first section of any business plan is the description of the product or service that the entrepreneur is going to produce or provide. In this section you should answer the following questions.
What are the aims to meet the needs of your product (service)?
What benefit you can get from your product (service)?
What distinguishes your product (service) from the goods of a competitor?
A useful effect is what sold the product. Distinctive features of the product is what makes it possible to obtain a useful effect. But do not rely on the exclusive advantages of the product. Better to focus on maximum satisfaction of the needs of the market. The buyer was absolutely indifferent to such important from the point of view of the manufacturer, the properties of the goods, the intensity, material intensity, energy intensity of their production, technology, products in production, many important features of their design. Two elements of consumer properties of the product and price are decisive for the buyer when making a purchase, and the main components of competitiveness of the goods, reflecting its contrast to the product-competitor.
In the end, people tend to buy something. what they like, not what they offer. It is always necessary to remember the manufacturer of the goods (services). Very important and very often overlooked point is the visual image of a product, or a copy of your production, or evidence of at least one customer is fully satisfied of your service. Without this and you yourselves will not have a full picture of its future problems and costs, and your potential lenders and partners will not want to give you money under an idea that has not resulted in at least one instance of your product or service. Therefore, it is always advisable to have the image of your products brought to the presentation, a photograph or drawing of the product, giving it a very clear idea, or a detailed description of the services provided.
In the same section should describe the main qualities of your goods (services), its appearance, if necessary, and packaging, and service. At this stage it is advisable to estimate the price of the goods and the costs that will be required in its manufacture that will allow us to determine the expected profit, and hence your chances of success or failure.
Analysis of the market for
The second section of the business plan – market research of the product or service. Insufficient analysis of the market and potential customers, their tastes, requests, monetary resources, etc. – one of the most frequent causes of failure in business. So before you put the case on a “Grand scale” and to do it seriously, you should carefully study the market. This will give the opportunity to determine the range of consumers, the market capacity of goods (services) I. consequently, the volume of production and sales resources.
If it is difficult to conduct accurate market research or they are quite expensive and not affordable for a budding entrepreneur, you can make a trial batch of goods, the implementation of which will provide valuable information about the market, especially if you do take a direct part in the sale of goods or provision of services.
It is helpful to note the following:
how often and willing buyers to purchase your product or ask you for services;
exactly who is buying your product or requesting your service (useful to ask the consumer what attracted him in your product or service);
how long did it take to implement the whole consignment of the goods or provision of one service;
how buyers react to the price of your product. You can play with the price of the product and see will it decrease the speed of sales and the expansion of the consumer.
Thus, the trial sale, you must obtain the maximum information of interest. It is useful to ask the consumers what changes have they made to the appearance, quality parameters, packaging, services. It does not seek to meet the interests and needs of all consumers at once, target your product or service is always to a certain group of buyers, their needs and tastes, aim the improvement of its products and services, acquire a certain niche in the market for the product (service) and try to hold her.
Assessment of competitors
The third section of the business plan is dedicated to the analysis of competitors. You should not think in terms of our unsaturated market such analysis is a waste of time, effort and money. Because the situation can change at any time, and you are challenging your business with the future in mind. So I should take care about this section of the business plan. It is necessary to answer the following questions:
Who is your competition today and what state his case: stable, on the rise or declining?
What are the differences between your goods or services from similar goods (services) of your competitors?
What are, at least in General terms, the chances and the possibility of the emergence of new competitors?
What do you expect them to surpass?
The purpose of this section is to facilitate the selection of appropriate tactics of competitive struggle and to warn his company from others ‘ mistakes. Among the typical errors include attempts to infiltrate into oversaturated market. A detailed analysis of the actions of competitors may force us to change the strategy and make adjustments to ongoing activities in order to better confront their rivals. Moreover, such analysis must continue unabated if only because the markets are in constant change, and somebody’s successful debut attracts new competitors.
“Fighting on two fronts” is difficult. So focus on those activities where there is a definite advantage over competitors (high quality products and service, experienced staff). Try to match their strengths with vulnerable moments in the activity of the opponent (of course, provided that they are known to you).
If you clearly answer the questions from the three sections of the business plan, you should get some idea about the market niche you want to fill by organizing your business.
The next section of the business plan aims to answer the question: what practical steps should be taken to occupy a certain place in the market?
The fourth section is the marketing plan. In General, marketing is a relationship of two parties: a comprehensive study of the market and potential customers and extensive promotion of goods (services) to this potential customer. “To produce something that is bought and not to sell what is produced” – the main formula of marketing. As in the previous sections, one way or another, was assessed consumers and competitors, in this section of the business plan you most of all should be interested in the second part of marketing: how to produce and bring their product to the consumer.
To produce goods, which parameters corresponding to the requests of the buyer, it is only half the battle. It must be delivered to potential consumers and create the conditions for the transformation of demand into real demand. Commercial