Looking at the broad concept of the term, it can be said that it is a plan, a program for implementing various operations and activities, which contains data on such aspects as the company itself, the goods it produces, the markets it sells, and marketing.
It is a program product that is created during the planning of business processes. It makes it possible to define goals and the means of achieving them through the development of specific programs, and actions. Of course, in the process of work, they are subject to adjustment in accordance with current circumstances. There are two options for drawing up a business plan for a small business – for yourself and for external parties.
Here are tips on writing business plan by BidForWriting:
Writing a paper for yourself
The purpose of the paper is to be a guideline for the execution of the tasks. According to the data from this document, the actions for the successful implementation of the project take place. Such an estimate should contain more details, as well as a pessimistic, realistic and optimistic forecast. As for the cost part provided in the calculations to investors, it will be more restrained and specific. The emphasis in this type of planning is on the project’s own needs and implementation schemes.
Drafting for investors
The intended function is to raise debt financing for a project. This type of paper is created for third parties, which are lenders, commercial banks, and government agencies. A key purpose is to be able to prove that the project is viable and able to generate revenues. When drafting this plan, special attention must be paid to the logic of operations, as well as the calculation part, comparing the facts with the plans.
SWOT analysis and its role in writing a business plan
The drafting of a plan starts directly with an analysis of the big picture. This requires the collection of all information and analysis. One indispensable step is the SWOT analysis. Although it sounds complex, it is extremely easy to understand. Thanks to its application, you can easily structure all available information and make effective decisions based on it. SWOT is an acronym that can be deciphered as follows:
“S – strengths” – strengths may include low production costs, a high level of professional competence, innovative product, and good service;
“W – weaknesses – lack of business premises, unknown brand, high level of competition;
“O – opportunities” – opportunities, depend on external circumstances in the form of the political environment, social environment (introduction of advanced technologies, obtaining funding, the age peculiarities of the area);
“T – threats” – threatening factors, force majeure, man-made disasters, other contingencies (availability of customs duties and probability of their increase, competition, and its increase).
The purpose of the analysis is to produce a detailed, high-quality assessment of the organization’s external and internal factors by means of a detailed picture. After these steps have been taken, each section can be described.
How to write a business plan
Niche, industry analysis
This is a mandatory step that will prevent likely mistakes in the initial stages of the business. The purpose of the market circumstances analysis is to explain how the future business will be able to influence the market space and respond to the situation that is emerging or will emerge in the future. This step contains several crucial aspects:
- identification of the demand for the product/service;
- calculation of market power indicators;
- assessment of the level of competition and the influence of other factors;
- results of market studies;
- forecasts of sales volumes;
- description of marketing objectives.
Before the activity, the entrepreneur has to study the niche, investigate the offers of competitors and think about how he/she will be better than them. The evaluation of other companies is based on a detailed study of their advertising, product, service quality, and pricing policy.
Business opportunity assessment
This section is critical for investors as it provides a description of potential development areas. Once the niche is fully explored, it is worthwhile to start analyzing opportunities one year ahead, and then 5, 10 years down the road. Opportunities lie in geographic expansion, the natural increase in profits, increase in assortment, and are determined by the company’s financial base and external circumstances.
Information about the product you sell
The quality of the product is 90% of the success of your business. In fact, so is the quality of its description in your business plan – 90% of the success rate that you will want to be allocated funds. When describing it, you should focus not only on the classic scheme but also on the original presentation of your product. Traditionally, this section contains the following information:
- A physical description of the service or product;
- a listing of the application possibilities;
- The positive aspects in terms of progress;
- readiness of the product to enter the market;
- a list of experts with good references.
Marketing Plan
Marketing is the driving force behind the modern business, so this plan plays an important role in the whole planning process. It contains the following descriptive features:
- pricing data, price forecasts;
- market coverage tactics;
- prospects for the creation of new product lines;
- marketing schemes for products;
- A description of the main distribution channels;
- listing of methods of dissemination of product information;
- definition with advertising strategy.
Modern business involves the existence of a large number of marketing positions. It is worth focusing on those areas that are closest to your target audience.
Interesting facts about writing a business plan
- Additional sections may appear as additional data. For example, they may concern with an assessment of the risks likely to be faced by the project, and what the consequences of unforeseen circumstances are.
- It is important to include a full schedule of all planned activities, i.e. a timetable within which the project will be carried out.
- Production support plan, which includes such data as analysis of the effectiveness of the resource base, estimate of the need for different resources, logistics, and information base. Production support plays an important role.
- Each thoughtful element should include a section on management tactics and process organization. It describes the main participants of the company who occupy certain positions, considers the general organizational scheme, demonstrates internal communications, and reflects the procedure of personnel selection, and the system of their remuneration.
So, we have looked at how a business plan is made from scratch for a small business, and what information is needed. It turns out that you need to proceed gradually and provide investors not with a “dry” theory, but with practical data to back it up. This will increase interest in your project and make it as successful as possible.
