Do you have an innovative idea for a business?
Do you want your business to be successful, profitable and sustainable?
You must identify the need, plan your way to success and then… benefit!
Always start with a Business Plan!
The BUSINESS PLAN will be your guide in a new and unknown environment. Drafting a detailed and well thought BUSINESS PLAN will be one of the most important steps. It will give you a clearer picture of the path you will need to follow, especially during the first years of your business’ development. Business Plans usually project for a three to five year period and define the path that a business must follow to achieve set goals. A detailed plan is crucial to help you think objectively on the factors which will affect your business and take informed decisions in every step. Your BUSINESS PLAN will help you think very carefully about your idea, develop it further and consider all the difficulties that you might face on the way.
Our guide on drafting a business plan will lead you step by step.
The Summary is often considered the most important part of a Business Plan. This part sums up the essential information by answering the questions:
- Who are you?
- What is your goal?
- Why do you think that your idea is important?
The summary of a Business Plan is the first opportunity to grab the attention of readers, or potential investors. It must emphasize the strongest points of your general plan and it should be always written last, after you have analyzed all the elements of the business plan. Yet, it must be always positioned first in your business plan.
What kind of information should you include in the summary?
The summary of the business plan is the first encounter with every reader, and this is precisely why its content is extremely important. You may find below the main points that the summary of your business plan must contain. Each of them should be applied during different phases of business development. If you are a person who owns an existing business and has been in the market for some time, then your summary must contain:
- The goal of the company-In this part you must explain the main idea which leads your business. You can explain this in few sentences, up to a paragraph. The sentences must be short and direct.
- Information about the company – In this category you must include information on the company's history, the names of the shareholders, management team , the number of employees and the location of your business.
- Development and Growth Highlights–In this part you must include the data you think is crucial to the evaluation of your business’ success. (you might include the market share, annual revenues etc.) You can enrich this part with graphs and charts.
- Products and services offered by your business–You can shortly describe your main products or services.
- Financial Information–If you will be asking for financing for your business, you will need to include in the summary any information about your current banks and investors.
- Future Plans–Explain where you would like to position your business and what you would like to achieve.
The information mentioned above will be written concisely and summarized in a single page.
If you will start a new business
If you just thought about starting a new business, then you should consider the following rules:
Give detailed information on the specific reasons which drove you to start this particular business.
Show that you have done a detailed market research and analysis. Include information on a specific need or a gap, which you have observed and think you can fulfill with the product or service that you will be offering.
You must be careful to convince your reader that you have all the chances to be successful in this initiative that you are undertaking.
Description of the Company
This section of your business plan must contain a detailed description of the specific elements of your business. Through this section you must help your readers and potential investors to understand the main objective of your business and the unique proposal that you offer to the client. In this part you must:
- Describe the nature of your business and list all the market gaps or needs that you are trying to fulfill.
- Describe how your products or services satisfy customers’ and market’s needs.
- List your target groups: specific consumers, organizations or businesses that you will serve.
- Explain how the clients benefit from your products or services. List your strengths, which could be:
- Easily accessible location
- Professional staff
- Efficient activity
- The ability to bring value to your customers
This section of your business plan must give detailed information on the specific field of your business and about the market where you will compete. In this section, you will need to list all the conclusions and the findings you have obtained from your research activities.
What kind of information should you include in the market analysis section?
- Detailed description of your field of expertise – Providing information about market size, market growth or other characteristics you might believe would help the readers. You will need to list your target groups within your market.
- Information about your target market – narrow your target market, so that its size is manageable by you. Many businesses try to attract more customers and markets than they can afford. Research the market and include the right information about :
- Distinguishing characteristics – You need to answer the following questions:
- Which are your potential clients’ main needs and requests?
- Do you fulfill these needs and requests with your product?
- Which are the demographic characteristics of your target group?
- How can you reach your target group?
- Are there seasonal or cyclical trends which could impact your business’ activity?
- The size of the primary target market – Despite the size of the market where you would like to undertake your activities, you must also include data on the annual purchasing power of your specific field or industry. You must also define the forecasred growth of your target group.
- What market share could you gain? – Which is the market share that you aim to gain in a specific geographical area? In this section of your business plan you must explain the logic behind your calculations.
- Pricing and gross margin targets – You will need to define the pricing structure, gross margin levels and the discounts that you plan to use.
If you will include information obtained from market research, you will need to focus only in the results of these researches. All other operation details must be listed in the Appendix.
- Competitiveness analysis – This analysis must identify the competitors in the segment of the market that you operate. You must list the following characteristics:
- Competitors’ market share
- Competitors’ strengths and weaknesses
- How important is your target market to your competitors?
- Is there any barrier that could create obstacles during your entrance to the market?
- Which is your opportunity in this specific market?
- Do you have any indirect competitors which could affect your business’ success?
- Are there any obstacles in this market? (for example the changing technology, the high investment costs, lack of professional staff)
- Legislative obstacles – In this part you must include all the legislative information related to your business. You must specify how you plan to fulfill all the regulatory requirements related to you business. In this part you could also explain how will certain regulations affect your business.
Organizational Structure and management
This section must contain information on the organisative structure of your business, must provide detailed information on the shareholders as well as present in detail the profiles of the management team.
- How have you structured your business?
- Which are the members of the board or the managing team and which is their profile?
In your business plan you must provide a detailed description of each department and its specific role.
A well detailed, organizational structure demonstrates that the work in your company is well organized and efficient.
In this section you will need the write about your board members and give explanation on the way you plan to fulfill their business needs and requirements. You must specify the financial packages of your employees and also the benefit plans, which are important to motivate them give their best for the business development.
A simple and effective way to write down the structure of your company is to create an organizational chart with the description of each specific position.
In this section you need to define the legal structure of your business. What is your business? Or what will your business be?
- Individual Business
- General partnership
- Limited Liability Company
- Joint Stock
- Foreign Company
- Government owned Corporation
- Public Corporation
- Agricultural Cooperative
In your business plan you must also include the following information:
- Names of the shareholders
- Their share in the company
- Extent of involvement to the company
- Management Profile
- Short description of the role in the company
- Previous employment
- Engagement in the community
- Years of work in the company
- Quantified achievements
Offered products and services
This is an important part of your business plan. It will introduce the plan to the reader. You must be careful to write in this part a detailed description of your products, by emphasizing the innovation you bring in the market:
- Which is the main characteristic which makes your product or service better than the competitors?
- How does your product fulfill the needs of your target market?
What kind of information should you include in this section?
- A detailed description of the product or service that you offer and the current development stage
- Products’ lifecycle
- Intellectual Property (list all the documents that you have from the registrations)
- Activities related to market research for products or services
Marketing and Sales
Marketing the products and services that you will offer to the client is one of the most important parts of your business plan, because Marketing is a process of creating customers. Clients are the lifeblood of your business and the ones who will define its success or failure. In this section we list all the main points that you need to know, in order to create an effective marketing strategy.
A general marketing strategy generally should include four different strategies:
- Market Penetration Strategy
- Growth Strategy which can include:
- An internal strategy on the growth of human resources
- An acquisition strategy
- A franchise strategy
- A horizontal strategy which allows you to offer the same product to different customers
- A vertical strategy which allows to offer the same products at different levels of the distribution chain
- Distribution Channels Strategy – Choice of distribution channels could include the involvement of the the internal sales force, distributors, sales points etc.
- Communication Strategy should explain how you think you will communicate the right messages to the right clients. The communication channels could be:
- Apots in radio or TV
- Public Relations
- Promotional materials like posters, catalogues, flyers, leaflets etc
- After drafting a marketing strategy, you can continue with the sales strategy. The latter is the one you will need to follow to sell your product to the right clients. How do you actually plan to sell your product?
Your sales strategy must include two main elements:
- Sales Force Strategy
- If you will have a sales force, will this be internal or you will use representatives who will not be employed by you?
- How many representatives will you recruit?
- What strategies will you use?
- How will you train your sales force?
- What compensation schemes will you use?
- Sales activities-It is important to fragment your sales strategy in different activities. Initially you need to identify the potential clients base and then set priorities, by focusing on the channels which have the biggest potential clients.
If you will seek funding for your business, in your request you will need to include the following information:
- The specific request for funding
- A request for funding you might have in the future ( in the next five years)
- How to use the funds that you will be granted
- Every strategic financial plan that you may have drafted for the future: sbuyout, being acquired, investments of interest to the creditor, because they could directly impact your ability to pay back this financing.
To support your request for financing you must also include in your business plan the right financial information and the historical and prospective financial information.
The Appendix will change in accordance to the information that you will need to attach to your business plan. Creditors or other potential investor may have the need to access this information, in order to decide on whether to grant you the loan or the fund that you requested. It is important to have the appendix within easy reach.
It should include information about:
- Credit History (personal and business)
- Resume of the management team
- Pictures of the products that you offer
- Reference Letters
- Details of Market researches
- Relevant Articles
- Licences or Patents
- Legal Documents
- A list of business advisors, including financial and legal advisers.