You’re about to take that great idea that will make you a millionaire, but… You must have a successful business plan to good start. You already have a business plan? In this article today we will discuss; The difference between success and failure of your business plan and it can be a click away.
What exactly is a business plan?
A business plan is similar to a plan of a building, i.e, a document (in this case writing) where in detail the way in which a business project must be carried out is described. In the case of the plane of a building graphically detailing its structure, installations which will, the way it will be built and will look like when you’re ready.
In the case of the business plan, we speak of a document which aims to detail the structure of a company, the way it should be, how much it will cost (budget opening, operating, advertising, etc.) and the scope of the same (mission, vision and objectives).
Related: Business Plan: 5 Fatal Startup Mistakes You Need to Avoid
Elements of a business plan
There are several elements that make up a business plan, many of them specific to the business in question. However, here are the most common:
In planning the business idea, the name of it, the story of the rotation, a brief description of the company and the products we market the company describes.
Here we try to answer the questions: What business is dedicated? What products or services produced? Commercialization. Later comes the marketing phase, where the market to which the products (target market) will address and define the strategy to reach them (marketing plan) will be analyzed. In this phase the “market research”, consisting run a thorough investigation to determine the commercial viability of the project are included.
It is worth mentioning that it is very dangerous to assume that you will succeed because “you already know the market.” There are always variables not contemplated that may affect the viability of the project: economy, competition, market fertility, growth prospects, and so on.
A market study, to be done by a professional in the field, will minimize the risk of not contemplate some of these variables. The marketing plan will detail the objectives, strategies and skills to implement marketing and their approximate cost activities.
In detailing the steps to get products to market, the means to be used, the distribution channels, the price of products and so on. Arguably this marketing plan is the backbone of the business, because if this fails, the risk of bankruptcy for lack of flow is run.
This section defines human resources needed to operate the business (organizational structure) as well as techniques to produce goods and services and administrative policies. In the organizational structure the number of employees that will be required and their hierarchy, the type of work performed, the payment structure and competences that should have be defined who will lead the company.
In the production section must contemplate:
key suppliers, the minimum stock (if you sell physical products), minimum delivery dates and the necessary elements for distribution: freight, packaging, etc (if applicable).
Regarding the administration should be defined: credit policies, management, creditors, management of accounts receivable and accounts payable, discount policies and the costs of opening and financial plan, i.e, the projection of sales, cash flow, profitability and breakeven. Also, if you’re not the only investor, you should describe how you plan to obtain the necessary funds.
The executive summary:
This section, normally one page, the most relevant information of the entire project is summarized: the project idea, the investment required, the target market, as the goods or services to be offered to the competition are differentiated, etc. This section is particularly useful for capturing the attention of investors who review hundreds of projects.
Tip: Write this page at the end, because it is at this point that will have all the necessary information.
Importance of business plan
The real importance of developing a business plan is not in the final document; actually lies in the exercise of researching, thinking and planning for all possible internal and external factors that will affect the business. This exercise could prevent unexpected results and even fatal for the new venture. It is clear that the business plan is not a simple task, but implementation often takes no more than two months.
Many times, people who undertake a business think they have all the information in his head, but this is equivalent to having a new puzzle within the closed box. It is true that you have the complete picture, but if we decide to realize the picture and hang it on the wall, you must open the box and assembled piece by piece, until the picture is fully detailed.
Large companies dedicated to franchise their business (and they are really successful) know in detail each of the pieces that comprise it, and therefore control each of its processes. This does not mean that no unforeseen occur, but they occur less frequently. So before starting, make your business plan with the assistance of a professional in the field. Remember what dictates the popular saying: “. He who fails to plan plans to fail …”