Proper Business Plan

Proper Business Plan

Definition of ‘Business Plan’

A written document that describes in detail how a new business is going to achieve its goals. A business plan will lay out a written plan from a marketing, financial and operational viewpoint. Sometimes a business plan is prepared for an established business that is moving in a new direction.

The Business Plan well explained…

A business plan includes a description of a company or small business, its services and/or products and how the business will achieve its goals. The plan includes the overall budget, current and projected financing, a market analysis and its marketing strategy approach. In a business plan, a business owner projects revenues and expenses for a certain period of time and describes operational activity and costs related to the business.

The idea behind putting together a business plan is to enable owners to have a more defined picture of potential costs and drawbacks to certain business decisions and to help them modify accordingly before implementing these ideas.

Business Plan Structure…

1. Executive summary (max. 3 Pages)
The executive summary should include the had facts of your business idea, objectives for the first 3 years and beyond, Mission, Key’s to success, Competitive Edge, financial outlook, investment needed, return of investment, company summary (status Q). This section is the most important part of your Business Plan and a summary of your whole work.

If you send potential investors any information, you should start with your executive summary only. Based on that an Investor can quickly decide whether the business proposal is interesting for him or not. All other information’s are provided at a later stage.

2. Market Analysis
You have to know your market well in order to prepare your strategy, so spend a lot of time on that part and include general data and facts about the market/country itself. Based on that you should identify a need and calculate the market potential for your business.

In addition to that you should analyse your

3. Competitive Environment
That section identifies your Competitors and should provide detailed information’s about their size, revenue, unique selling points, strategy and so on. Knowing that will help you in your strategy development.

4. Products
Here you describe the products you offer and underline the USP’s

5. Strategy & Implementation
Your strategy is based on your homework you’ve done under point 2 – 4 and includes your competitive edge, innovative approach and differentiation such as cost leadership, differentiation, business model, sales strategy, target customers, sales forecast, sales force, pricing strategy, implementation strategy, marketing strategy – in example the 4 P’S (Product, Price, Place, Promotion), milestones etc.

6. Management Summary & Personnel Planning
How does your operation will look like

7. Organization Chart
A top down organization chart which shows your organization and reporting lines

8. Risk Management
Every venture has risks and challenges – what is not a problem at all if you identify and prepare for them. They should include external and internal factors, opportunities, threads, risks and solutions.

9. Financial Planning
This part is one of the most difficult ones if you haven’t any market experience because you are writing about a new venture. The best is you start with a projected sales forecast which is based on your homework under Point 2 (Market Potential). Based on that, it should be much easier for you to calculate your variable and fixed expenses and investment plan.

If you have done that, all you need to is including those figures in a nice profit and loss sheet. don’t forget to calculate EBT, EBIT, NOPAT. Based on your first year figures it should be no problem to estimate the growth of your business for at least 5 years!

In addition to that you should prepare an EBIT chances and Risk sheet which will show the real calculated EBIT, worst case EBIT (= -10% of what you have calculated) and a best EBIT (= +10% of what you have calculated).

Last but not least, you need to include your Break Even Analysis which will be feeded by your P&L and Product Calculation.

10. Capital Demand & Return of Investment
The most interesting part for Investors, therefore it has to be included in your Executive summary. Here you show your calculation of the capital demand you have including investment costs, deficits from your first years in operation (operation expenses) and when with which interest you will be able to return the investment.

If you are looking for Capital for your business, I can recommend the following networks to you:
www.fund2.me (worldwide equity and reward based funding) – my own platform:-) www.kickstarter.com (reward based funding only)
www.indiegogo.com (reward based funding only)
www.fundable.com (US equity based funding only)
www.angellist.co (worldwide equity based funding only)

Of course there are more sites out there – estimated more than 800.
Do your homework and research them before listing your idea as most of them are investor driven with a huge database of unserious investors and some cheaters – that’s my personal opinion based on researches and the statement of some of our clients.

Forgot anything or is something not well explained? Then leave a comment below, I am thankful for every feedback. How a Business Plan should look like is available under the following link. I kindly ask you to not copy & paste any of the information’s provided!

[button size=”large” title=”Download” style=”squared” url=”http://krostewitz.com/wp-content/uploads/Cocoon-Systems-BP.pdf” target=”_self” scroll=”0″]

 

Be the first to comment “Proper Business Plan”