Why do you need a business plan. Tasks, structure and goals of the business plan

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Everyone who has decided to start their own business needs to understand what a business plan is for. Without understanding the importance of planning and its principles, it will be difficult to fall into the category of successful entrepreneurs. First of all, because the market is an aggressive environment where you need to be able to gain a foothold in order to improve your position later. Without analysis and planning, it will be extremely difficult to do this. In addition, such a document is extremely important in the process of attracting investors.

Why do you need a business plan

The main task of such a document is to translate a specific idea into numbers and points. That is, the most detailed planning of future business activities.

A full-fledged business plan has the form of a document - electronic or paper. It provides answers to questions such as:

• is the idea worth the resources needed to implement it;
• will the business pay off, and what degree of profitability will it have.

Soidentifying risks and possible profits is the first thing a business plan is needed for.

In order for planning to be effective, it is necessary to conduct marketing research. We are talking about a thorough study of the direction of activity, the product itself or a specific service, while taking into account the current market relations.

If we are talking about an enterprise, then business planning in this case will include the following areas:

• Full analysis of the manufacturing, trade and economic sector. The main goal of such a process is to identify the features, distinctive features, advantages and disadvantages of these areas.
• Development of a specific company project. For each new product, you need to create a separate plan for its introduction to the market and subsequent promotion. To do this, it is necessary to determine the characteristics of the market and the product/service.
• Results of a study of commercial, financial, technical and organizational mechanisms, the use of which can help achieve the goals.

Internal and external goals

To understand why an enterprise needs a business plan, you need to pay attention to such options for its application as:

• Solving the internal problems of the company. In this case, the purpose of the document is to identify prospects, strengths, as well as weaknesses, shortcomings and various threats. Such a plan is used as a management tool that makes it possible to objectively evaluate a specific product or the company's activities as a whole.
• Provision to third parties and organizations. An external business plan is used to attract individuals and companies beneficial to the firm. These can be government agencies, banking institutions, various funds, business partners or investors.

Such analytics gives the greatest effect when, immediately after the formation of an internal business plan, an external one is created. This is explained by the fact that qualitative monitoring of the state of the organization and the subsequent correction of the identified disadvantages greatly facilitates the formation of a truly interesting proposal.

Moreover, it becomes clear what kind of investments and partners the company needs at the moment.

Management tool

Understanding why an enterprise needs a business plan, it is worth determining the practical benefits that a company manager can get from such a document. Directors use it in the process:

• entering a new market;
• increasing sales;
• developing a tactical plan;
• search for promising directions;
• assessments of the financial condition of the organization;
• strategy formulation;
• define short-term and long-term goals;
• development of a marketing policy in order to establish the company's position in the market;
• sales and production cost estimates;
• determining the criteria for the quality of goods and services;
• formation of the correct personnel structure, allowing maximumeffectively achieve the goals set for the near future.

Given what is needed to create a business plan (analytics, strategy, performance assessment, risks, etc.), the manager, using such a document, can see the weaknesses of existing processes and pay attention to them.

Benefits for small businesses

Entrepreneurs, especially start-ups, carry out activities that involve the risk of significant losses or even closing the business. To avoid mistakes that entail significant costs, it is necessary to be able to anticipate possible problems and at the same time reasonably estimate the level of income in the near future.

That's what an entrepreneur needs a business plan for - with the help of competent analytics and accurate planning, prepare for the successful start of a new business.

In addition to taking into account all possible risks, such a document simplifies the solution of several important tasks:

1. Fixing the main thoughts. It is about placing emphasis in the planning process. When preparing for a new business, you need to understand what is important and what elements in the launch process will be of secondary importance. When all the key thoughts are detailed, it becomes possible to evaluate the plan as a whole and see its weak points that have not been worked out.
2. Designation of goals. It is important to display on paper all the tasks that need to be achieved. In this case, it is necessary to indicate all the dates and figures necessary for evaluating the result. That is, an entrepreneur must have a clear picture of what, in what volume and for how much he should receive.
3. Evaluation of team performance. The work of employees and their results are easier to evaluate using a benchmark, which is the business plan. Such checks allow you to make the necessary changes in the strategy for implementing a specific idea in time.
4. Search for investors. In some cases, it is financial injections from outside that can give the necessary impetus to the development of small or medium-sized businesses. But investors, being experienced players, want to understand exactly what they will be investing in. Both the details and the big picture are important here, with numbers, deadlines, identified risks, alternative development paths, etc. The more accurate and thoughtful the plan, the higher the chances of getting money.

During the planning process, it is good practice to write down any hypotheses regarding business processes. They can later be tested and, with positive results, implemented.

Structure

Planning must be smart, otherwise it will not give a good effect. Here's what you need to write a business plan:

• title page;
• table of contents;
• project summary;
• description of service or product;
• marketing analysis;
• risk analysis;
• financial projections and performance;
• applications.

With this structure, the plan should be set out on 30-40 pages, including applications. This volume is sufficient. Exceptions are possible if the document is drawn up for an organization that has its own special requirements. For example, banksstate corporations and government structures (RUSNANO, SEZ, etc.).

How to write a resume

This part of the document outlines the essence of the idea and the main information concerning it. It is better to write a resume at the end. This recommendation is explained by the fact that after all the research and calculations, there is a more accurate and deeper understanding of a particular idea.

The summary of the project should reflect:

• Business start date.
• The mission of the project. It is about clearly defining the benefits that owners and customers will be able to receive. It will also not be superfluous to draw up a vision of the business in different periods of time: 6 months, a year, 5 years.
• Key idea. In this part, you need to describe what exactly money will be made on and how.
• Key project staff.
• Location of the head office of the firm and its branches (if any).
• A brief description of the product or service.
• Sales results.
• Funding history.
• Prospects for the development of the company.

Of course, not every entrepreneur will have enough experience to fully fill out every paragraph of the resume. The company can only start its activities. In this case, it is necessary to focus the attention of investors on the reasons for the demand for a product or service. It is also worth highlighting those factors that will definitely contribute to the successful process of entering the market.

Any voluminous textual descriptions complicate perceptionideas.

Therefore, in order for information to be perceived easily and quickly, it is better to present it in the form of infographics, diagrams and tables.

Description

Detailing the idea and forming its structure is the first thing you need to write a business plan. The description section contains just such information. It should contain:

• brief description and scope of the target industry;
• marking company goals;
• a short story about the process of the emergence of the company;
• detailed business model;
• indicated factors and planned technological component of the project;
• complete information about the team and the key skills of each employee.

Thus, the main task of this part of planning is to form a detailed picture of the service or product. The more specific the better.

It is also important to pay enough attention to competitive advantages and the resources necessary for business development.

Risks

When preparing for a presentation, you need to be clear about what data you need. A business plan without specific numbers and detailed, well-made forecasts will not be able to fulfill its function.

One of the objectives of such planning is to assess risks as accurately as possible and determine ways to overcome them.

This means that the document should describe specific potential problems that can have a significant impact on the implementation of the idea. Given all the data regarding risks, the businessman mustto develop a competent program to reduce them. Moreover, the methods of counteraction must be convincing enough to make investors decide to invest in the project, despite possible problems.

A sober risk assessment is what a business plan is for for an individual entrepreneur who opens a project without rich experience in the field of entrepreneurship. Those who neglect this part of the calculation often fail, losing all their money.

Financials

Without detailed, up-to-date data, it is difficult to imagine a full-fledged business plan. What documents are needed for the presentation largely determines the format of the business.

If we are talking about a company that has already been on the market for a certain time and has statistics, then investors should provide the following information:

• statement of cash flows for the last year;
• loss and profit data;
• balance sheet.

These documents will make your presentation more convincing.

Both an entrepreneur and an average company can include in the business plan a forecast for all categories of expenses and profits for 3 years ahead.

It is also important to analyze the planned return on investment.

Marketing Analysis

This is the information intensive and complex part. Any entrepreneur who understands why a business plan is needed will not save money and time for such research.

The main task of this planning block is to determinestrategy for bringing the product to market and then strengthening its position.

That is, it is necessary to think about how exactly it will reach the level of sales that is needed to maintain the activities of the company or its specific department. It is also important to clearly build a strategy for increasing customer loy alty to a product or project.

The following actions are important for conducting a full-fledged market research:

• identification of competitive environment;
• selection and subsequent analysis of the target part of the market;
• determining the company's capabilities within its segment;
• formation of sales forecast;
• building a development strategy.

All forecasts and assumptions must be based on verified information.

Applications

Having figured out what a business plan is for, you need to decide how to make it as convincing as possible. And this is where documents play a role. Their presence is desirable at every point, as they act as confirming planning elements.

That said, there are many documents that should be present, but in a separate section called "applications". This part can contain complete and detailed market research data, complex technology information and company registration information.

If an entrepreneur himself does not know how to correctly draw up such a section, he can attract third-party specialists.

Results

A business plan is needed to identify the strengths and weaknesses of a product/service. It is also important for the reason that it allows you to draw up a complete and competent strategy for the development of the project, taking into account the characteristics of the market. In addition, without such a document, investors will not consider a specific idea.