If you could not find a business plan (BP) with a description, characteristics of the product that you plan to promote, then you need to start compiling it yourself. What sections does a business plan include? What are the stages in its preparation? And finally, how to arouse sincere interest among investors? We will analyze all these and other equally interesting questions in the article.
Project product description or business plan
Under the business plan should be understood the company's strategy regarding management, marketing and financial activities. It is issued as an official document. BP allows you to highlight all aspects of the future business, take into account existing risks, calculate investments and the timing of the return of funds. It is advisable to consider in more detail how to correctly write a product description. You should understand how important it is to draw up a document on paper. It's the first thing to look atinvestor at the presentation of the project. As an example, consider the description of a software product below.
Business plan: functionality
Perhaps the main requirement when drafting a document is the ability to demonstrate an idea so that investors clearly understand where they should invest or not invest. If the description of products and services is written correctly, various funds, banks and other structures will certainly be interested. Business planning helps to structure and systematize all information about the project. With its help, you can create settings for the planned expansion of future infrastructure, as well as correctly identify the time suitable for investing money in the development of the project.
Today, many novice entrepreneurs can only write product briefs. They only in general terms represent what functions a business plan performs a priori. Below we consider its varieties that exist today.
In order to present investors with a decent description of the product, it is worth using a number of tips for writing a business plan:
- The text should contain simple and readable wording, concepts: two-valued interpretations are prohibited.
- Business plan should be no more than 25 pages.
- The product description file is compiled in accordance with generally accepted standards.
- It is important to provide a potential investor with full details ofproject.
- All calculations and conclusions in the project must be confirmed by specific figures, facts or studies carried out in advance.
- All sections of the product description must be related. Each of them complements the general positive opinion of the audience about the project.
- After studying the business plan, the investor should see the potential of the project, so it is worth working on this issue separately.
- It's important to keep things flexible. Explanation: if your business plan does not exclude additions, changes or clarifications, then it can already be considered better than the competition.
- It is mandatory to specify methods of control over future activities.
Principles of compiling a business plan
It's easy to make a business plan, the main thing is to think over the main idea of a startup in detail. It is advisable to consider a step-by-step algorithm that allows you to develop a document yourself. First you need to identify the "strong" and "weak" sides of the business idea. You should not stop working on a project in the early stages, if suddenly there are more negative points than positive ones, because every minus is a unique point of growth for the business. A detailed analysis is also needed for the sales market.
Product description. Example
If, after doing the research above and calculating the initial monetary figures, you have not changed your mind about implementing the startup idea, it is advisable to start developing a business plan. The complete BP contains 12 sections. Let's consider them on the example of the description of software developmentproduct.
The business plan includes the following sections:
- The title page, which displays the name of the project and the structure where it is planned to launch and implement the software product project. It is important to indicate the name of the director of the company, the contact information of the people responsible for writing the BP, the date the document was created.
- Non-disclosure memorandum that will guarantee the protection of a unique business idea and will not allow it to be stolen. The file contains a requirement to keep confidential any information obtained in the process of reading the document. So, breaking the rules will be prosecuted.
- Short summary. It is important to keep in mind that you need to draw it up at the end of writing the BP. This is like an excerpt from the entire document, in which it is advisable to characterize the key points related to monetary indicators and the business idea as a whole.
To write a good resume, first you need to describe the product. In accordance with our example, it will look like this: the system for creating X-ray microtomography software involves studying the structure of the object of study from the inside in a non-destructive way. The mechanism consists of a photodetector and a radiation source. The software takes about 360 slices (one step=1 degree). And after receiving the primary information, a reconstruction technique based on the Radon algorithm is used. This is how a three-dimensional model of the research object is built.
In addition to a competent description of the product, the summary should contain a description of the target audience, the number of goods sold in absentia, the planned revenue after the launch within 1 year. It is important to indicate the total amount of investment required, as well as the costs of the project. Things to remember:
- about the organizational, legal aspects of the issue;
- the workforce that will be required to implement the plan;
- list of sources of subsidies;
- terms for reaching the breakeven point;
- payback period.
What is the first thing an investor pays attention to?
It should be borne in mind that the "Summary" section is the most important, since it is on it that a potential investor first of all pays attention. Conclusion: the fate of your idea is almost completely curled by the summary, so you need to present the data logically and concisely. Do not forget about the total income for the year, the total amount of cash at the end of the year, NPV (net present value) and the profitability of the structure.
Business Plan Sections: Part Two
In addition to the above BP sections, there are the following:
- Characteristics of the project (its meaning, what is needed to achieve the main goal, what are the obstacles and risks, ideas for the development of the project, and so on). This section is approximately two pages long. Today, a SWOT analysis is relevant, displaying all the risks and opportunities of the business.
- A characteristic of a market niche. Helper herethere will be such a figure as the volume of sales of an analogue product for a certain period.
- Detailed information about the project, that is, its essence is in the details. Here you need to remember the degree of readiness for the start of implementation, the availability of the necessary resources for this. Be sure to indicate the primary goals of the startup, the target audience, ways to achieve success, the pros and cons of the product.
- Marketing strategy. It is advisable to describe the essence of the strategy, the main performance indicators and the means of achieving the goals outlined in one of the previous headings. It is worth assigning responsibilities to all employees involved in the marketing service, deadlines and methods for achieving marketing goals.
- Production plan. In this section, you must specify information regarding the production of marketable products, taking into account the seasonality factor. There is one caveat, if you plan to sell finished products, for example, the product disassembled in the example above (clothes, shoes, children's toys), then this item can be omitted. The section should contain the following aspects: the necessary production mechanisms, process features, a list of equipment with its technical characteristics and cost, information about the areas for the production process, the necessary raw materials, costs in accordance with each stage of production.
- Organizational plan, where it is important to reveal the features of hiring personnel, monitoring their activities and distributing professional tasks. It is very harmful to neglect this section, because it is with its help that you can understand the compliance with the existingorganizational structure of the main objectives of the project. This section should contain the actual and legal address, the name of the organizational and legal norm (for example, LLC or OJSC), the current management scheme.
- A financial plan that characterizes all the monetary nuances of a business idea: profitability, payback period, and so on. Here it is important to calculate the tax payments, the composition of the capital of the structure, the plan for the income and expense reports of the enterprise, the cash flow and the balance sheet of the structure. You should also calculate the break-even point and net present value.
- Risk management. In the section, it is important to describe all the risks that are possible in the process of organizing and conducting the proposed activities. It should be remembered that those factors on which the profit of the enterprise directly depends have a special role.