The content of the business plan of the enterprise and the procedure for its development

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

Planning is a very important process in the daily life of modern society. It all starts with setting tasks for the current day and continues in the future for a month, a year, a five-year period and longer periods. Planning also plays a key role in building a business. If you want to successfully implement your idea, you need to draw up clear instructions for action for yourself. In addition, it is necessary not only for the businessman himself, but also for his partners, investors, banks. In this article, we will analyze what it is, why it exists, the content of the business plan, the main provisions, the procedure and stages of development.

The essence of the business plan

So, what is and what should be the content of a business plan? Are you thinking about starting your own business but don't know where to start? Any undertaking should not be based on a thoughtless impulse. You should develop a behavior strategy, learn everything about the industries in which you are going to work, monitor the market and competitors, calculate possible risks and profits. All these points are the content of the business plan in a short version. At its core, this is a document from which any considered business begins, large companies and successful companies are born on its basis.entrepreneurship. This document has its own standards, although, of course, it does not have a mandatory normative form. But the recommendations on its structure should be heeded, as it will come in handy many times in the life of an economic entity.

Why do you need a business plan

First of all, the content of the business plan will allow the entrepreneur himself to act clearly and consistently. Without instructions at hand, performing operations and transactions in a chaotic manner and without preliminary calculations, you can make a lot of mistakes than soon destroy all your work. Planning should be based on the best available information. Such an approach to business will allow us to calculate the possible consequences several steps ahead, avoid negative incidents and find additional ways to resolve emerging issues. The content of the business plan will allow you to push yourself to action, since all people are afraid of the unknown waiting for the next step, and here it seems like everything becomes open and clear.

The second reason to compile this document is to attract additional partner programs, invest in the project from external sources, gain access to large amounts of loans. Any self-respecting partner, and especially large organizations, do not want to get involved in projects of dubious profitability and viability. But the structure and content of the business plan may well convince prestigious and we althy organizations to invest in the development of a new project. Contribution mustpay off, and therefore it is necessary to provide analytical information on the upcoming case, which will clearly spell out the benefits of this kind of financial injection into a newcomer to the market. Properly drawn up structure and content of a business plan will open the door for an entrepreneur to large bank loans on favorable terms, government support and subsidies, and commercial investments from well-known companies. Such support during the start-up period will ensure a successful and fast start-up, and further strengthen the position in the chosen industry.

Who are investment intermediaries

At the stage of thinking about a business plan, it is very important not to overestimate your own capabilities for foresight and the ability to foresee the turn of events. The ability to analyze situations and identify, based on the data obtained, the immediate and long-term perspective of market behavior comes with experience. Neither education nor natural ingenuity will help here. Some things can only be done by going through the visual representation many times. Therefore, many novice entrepreneurs do not risk even taking on the main provisions of a business plan on their own, and even more so delving into analytical activities.

Young entrepreneurs prefer to turn to so-called investment intermediaries. These are the companies that take responsibility for the execution of this document. Their tasks include many points and processes, but they also charge a tangible fee for their efforts, andoften in the form of an advance payment. Usually the size is determined by the interest rate on the size of the desired investment in the project from third parties. Such companies employ experienced financial analysts, specialists in various economic sectors, theorists and practitioners of building a successful project, which make up the approximate content of a business plan. The sample is provided to you for consideration, decision-making, correction of inaccuracies. All details are repeatedly discussed and specified, a lot of meetings and re-issuances of the first version of the plan take place before it takes on its final form.

Choosing an investment intermediary is a very responsible matter. A big name may be the result of just the skillful work of a PR company. And you can end up with a standardized and tailored, "far-fetched" business plan. There can be no clichés and clichés in the development of this document, each project is developed strictly individually with full understanding of the essence of the business under construction. Therefore, at the stage of signing the contract, discuss all the details with your investment intermediary, so that later you do not get into an undesirable situation with prospective investors.

What is the danger of an incorrectly drawn up business plan

The content of a business plan, a sample of its correct structure, was invented for a reason. It would seem, why be aggravated into some specific forms, if the document does not have regulatory requirements for filling out from the state, tax authorities and otherscontrolling authorities? You can do everything much easier and faster. Look at the first content of the business plan that comes across, an example of which you can find on the Internet, adjust the wording to the meaning of your direction - and you're done.

Maybe for my own use, this option will do. And even then, it will be much more problems than good. But such a document will definitely not attract third-party investments. First of all, investors check the position in the market and the compliance of your data with them. No self-respecting organization will rely solely on the unprofessional statements of an absolute beginner. Not a single bank will provide a loan for such a business plan, not a single commercial figure will see a gold mine in your project. As a result, all funds spent at the first stage will simply be irretrievably lost. And for a novice entrepreneur, these are significant amounts that can delay the creation of a business project for a long time or completely deprive hopes of opening a business sometime in the future.

General document requirements

The content of a business plan at the request of UNIDO should be developed according to several fundamental rules. Without taking them into account, the document turns into a set of completely useless information.

So the first rule refers to the joint work of the project initiators and planners. The initiators draw up the terms of reference, transfer it to the developers, then, in the process of drawing up, all the accuracy andomissions. A full market analysis is needed to accurately forecast losses and gains.

The important point is to draw up a portrait of the client. It is necessary to clearly understand who the product is aimed at. Many entrepreneurs, inventing a completely innovative product, rely on "the right of the first idea." In this case, we should not forget that the most competitive and strong organizations can reproduce this product very quickly and at a lower cost. It is necessary to adequately assess your weaknesses, as well as goals. It is important for lenders to provide information about the refund process and the expected time frame. The content of the business plan of the enterprise and the procedure for its development should be completely under the control of the initiator.

The second rule refers to the scope and specificity of the document. The structure and content of the sections of the business plan should be clearly formulated, not contain water, too vague and detailed technical production processes. Document size typically ranges from eight to twelve printed pages (both sides). In some cases, the volume can be up to twenty-five pages of double-sided printed text. The content of the project business plan should be simple and complete. The document should present an honest analysis based on real events. It should outline the company's risks.

Business plan content: example

BThe following sequence of project information items is generally used as a standard business plan structure:

• title page;
• resume;
• description of the enterprise and industry;
• product description;
• marketing analysis, strategy and sales;
• production plan;
• management and organizational plan;
• financial plan;
• direction and effectiveness of the project;
• risks and guarantees;
• appendices (accompanying documents).

Company and product description

The title page should contain the following data: name, legal structure, telephones and addresses of the organization, status, telephones, names and addresses of its owners, confidentiality of reporting, date and year of the business plan, as well as the names of its compilers.

A resume is the calling card of your organization. It is it that represents the summary of the business plan and its peculiar outcome. It contains information in a condensed form about the company, the uniqueness of its project, financial needs for the realization of the idea, features of the sales market, guarantees and profitability forecast. The investor must decide to familiarize himself with the business plan in its entirety by reading the summary. Since reputable companies receive dozens of such projects a week, not all of them will be read, which means that maximum specificity and seductiveness of the project should be invested in the summary.

Description of the enterprise and industry require a description of the history of the company, its status today and future ideas. In thatsection highlights the financial results of economic activity, personnel and management staff, what the activity is aimed at, achievements and merits in the industry, prospects for the economy of the industry and the company, relations with partners and activity in the social environment.

Description of products and services necessarily requires the content of the business plan of the enterprise. A description of the production technology is also required. Each type of product is discussed separately, besides, it is best to provide a visual sample or, at worst, a photograph. Describe what technical innovations are required to successfully implement your plan, competitors with similar products, technology patents, the reasons why you chose your product, technology or service.

Marketing, production and management

Marketing analysis is the most important part. The content of the business plan of the investment project requires a particularly careful approach to the description of this paragraph. Whenever possible, truthful, interrelated factors should be consulted in the analysis. This section should show the investor how successful the product is likely to be in the market. Wholesalers and retailers as well as end users should be taken into account. A portrait of the end consumer, his age, gender, place of residence, geographical and regional characteristics of the implied part of the population should be presented. Here, consumer characteristics of the product itself are distinguished: type, purpose, price, expiration date or use,security and more. The approximate structure of the section implies the presence of a clause on consumer requirements for a product and a clause on competition in the market.

The structure and content of the main sections of the business plan requires a paragraph on the production plan. In this paragraph, it is necessary to talk about the production facilities involved in production and planned for implementation in the future. It is necessary to calculate the volume of production that covers the costs of operation, calculate direct and indirect costs, raw materials, and so on. The most complete cost estimate should be presented here.

The business plan should reflect the list of personnel of the organization. The management staff, the role of each specialist in economic activity and production should be specifically described. In addition, the cost of salaries and bonuses to employees is indicated. Potential lenders are closely scrutinizing the management team they are going to invest their money in whose efforts and professionalism.

Finance, focus and efficiency

The content and procedure for developing a business plan requires reflecting all financial information on the project being prepared. In the financial planning section, you should indicate the amounts that need to be spent on the preparatory and current stages, calculate the profit from the project, clarify the cost of lending, taxes, other items, and so on. In this section, it is desirable to indicate the total size of the requested funds, the financial request to the investor, the schedule by whichthe debt will be returned, in what amounts and by what numbers. It is necessary to indicate for what purposes the allocated funds will be used and in what percentage. The structure of the current capital is indicated, as well as the effectiveness of the use of cash available.

The section must indicate direction, sensitivity to market changes, volatility, materiality to society.

Risks and guarantees

In this section, it is necessary to take into account all possible business risks and circumstances equated to force majeure. The lender must be sure that in any circumstances his investment will be returned to him at least in the amount of the deposit. The period of operation of the organization is usually considered from two to five years. The main risks are the reactions of competing organizations, possible weaknesses of personnel or specialists. The risk may relate to the functioning of the technical equipment of the organization and competitors. Even if no risky situations are planned, they should be specified in detail in the business plan. The lender and investor must see that the organization is aware of the riskiness of any business and is ready to take responsibility for its actions.

Applications

It is recommended to attach documents on the basis of which it is based to each business plan. The constituent documents of the organization (legal entity) are also attached here. Such applications include a certificate of registration, the charter and agreement on the establishment, documents confirming data on certification, patents, licensing,diplomas and reference information on the education of key personnel, excerpts from press articles about the activities of the organization.

Applications include product photos, market research data, cost estimates, and spreadsheets. It is desirable to include in these materials photographs of production and outlets, a map of the organization, some contracts with partners, resume data of the managerial staff, analytical results of third-party organizations.

As an attachment to the paragraph on risks and guarantees, you should attach warranty cards, letters, composition and value of collateral, contracts, extracts from legislative and regulatory materials. The more fully the sections describe the current and planned situation, the state of the market today and forecasts for the demand for the goods and services offered in the future, the higher the likelihood of obtaining a subsidy, loan, investment for an entrepreneur, both a beginner and a long-term one operating in the market.