A well-designed business plan is a key to success for any entrepreneur, whatever goals they set for themselves.
Not only does it become a roadmap for building a business, but it also helps to attract partners and investors, which are so necessary at the start.
You don’t have to address writing services to put together a good roadmap. We offer you five simple steps to create a working business plan.
Five components of a good business plan
Step 1 — Market analysis
- Scan and analyze the internal and external environment
- Analyze competitors’ prices and products
Proper market analysis and assessment of the competitive environment of the enterprise allows you to create a sustainable competitive advantage of the product or services, choose the right channels of communication, and reduce operational risks.
Moreover, when analyzing the market and your competitors, you will understand your target audience and whether your services or goods will be in demand.
At this stage, you will realize that you need to change something in your product or services to make them more competitive.
Step 2 — Marketing and sales of products (services)
- Goods (services) description
- SWOT – analysis
- Pricing of goods — tasks and pricing policy
- Methods of goods (services) distribution and promotion
Describe your services or product and identify strengths, weaknesses, opportunities, and threats. This analysis will help you evaluate the company’s internal and external resources.
You will understand what can get in the way of achieving the goal and calculate how to minimize risks. It is always better to start with a SWOT analysis.
Its results will help to compose each section of the plan objectively.
Describe how the product differs from your competitors and why people will buy it.
Provide statistics on the market: how many people are looking for the product, how many are buying it, and how demand increases over time.
Here you need to describe your market entry, promotion, and sales strategy. Specify an approximate sales plan by quarter, year.
The marketing plan also reflects the pricing policy and advertising budget. Events and promotions should be marked on the calendar.
For each event, you need to calculate the approximate budget and the planned effect.
Step 3 — Production plan
- Production planning
- Production Planning Tools
Everything about the production of the product or services is reflected in this part.
If you manufacture the product yourself, you should describe how many resources and materials will be needed, how many people are involved in the process.
Don’t forget to reflect the cost of rent, energy, water, gas. Here you also need to describe the required equipment, tools, uniforms for workers.
If you purchase the product externally, the plan should include the suppliers, purchase and delivery costs, where you will store the product, and how you will deliver it to the customers.
Step 4 — Organizational Plan
- Types of Organizational Structure
- Organizational Structure and Employee Behavior
You need to prescribe specific steps for organizing the business with deadlines and planned effects.
You must include in this stage the signing of leases, the hiring of employees, their salaries, the organization of the work process, and so on.
This part also describes the organizational structure: the number of subdivisions, the number of employees in each of them, and the vertical and horizontal subordination.
Step 5 — Financial plan
- Cash flow report
- Financial planning
- Efficiency analysis of the investment project
You will have to make a detailed estimate of costs and projected profits. Keep in mind that investors will study this part of the business plan with great attention.
What you need to include:
- A monthly, quarterly, yearly, and 3-year revenue and expense plan;
- An approximate balance sheet of the company for the first year of operation;
- The timeline for implementation of the business plan;
- The prospects for development with graphs of financial activity, which marked the break-even point.
