Search Your Query Here

The Three Main Elements Of Business Planning

No one will argue that everything starts with some preparation and starting a company is not an exception. It starts with a business plan. Such an outline for an enterprise contains a written review of the products that you are going to sell or services you will provide. Also, you can choose, as well as a description of your competitors and people engaged in the deal. If you are an experienced entrepreneur, then your plan should include the previous financial documentation, like the income statements and the balance sheets.

1. The Essentials of a Proper Business Plan

• Business concept.

The description of the main idea: the product and what it represents on the market. It should be mentioned about the quality of the product, to whom it will be sold, define its opportunity for growth and popularization, and explain why it will be able to remain competitive.

Financial opportunities.

This part contains the most important financial items, including sales, profits, financial flows, and returns on investment.

Financial requirements.

It is obvious: in this part, you should state the approximate amount of money necessary to establish a company and expand it and how it will be used. If the loan for initial capital is based on security, you must indicate the source of the collateral.

The current state of the company.

 Provides information about the company:
 o When it was created, 
 o Its legal operations,
 o The main owners and main employees.

The main achievements.

Here will be the details about events or important turns in the history of the company that matter for the success of the business. Such information includes such elements as patents, prototypes, key contracts, test marketing results if any.

When writing the stated goals, do not try to write a lot of words. Nobody will read the declared goals posted on seven pages, because it will be quite clear that this enterprise, regardless of its merits, should not be invested. The principles of its owners are not decisive and, as a rule, they themselves do not know what they want.

2. The Elements That The Business Plan Should Include

Potential investors are usually interested not only in the profitability of the offered idea but also in the risks associated with the profit, positive and negative aspects of the certain enterprise. Therefore, the best business plan should also assess threats and possible risks.

The essence of business plans depends on some factors that affect the business, so it is natural that their structure will not be similar in different cases, but the process of creating a business plan structure for different purposes has much in common. In particular, in the structure of a standard business plan, you can define three elements:

The first element is a description of the key, most important and most significant details of the future enterprise, such as a description of the state of the business the organizer of the enterprise aspires to;
• The second element contains a description of the processes that have to be implemented to achieve the stated goals;
• The third element summarizes the results of calculations made in the second block using financial indicators, which become the most important factors used to assess the attractiveness of this project for the investor.

3. What Are The Main Parts Of A Business Plan?

As a rule, while writing a business plan you should indicate the following parts:

1) Title page;
2) Introduction;
3) Analysis of the state of the industry;
4) The essence of the project;
5) Production plan;
6) Marketing plan;
7) Organizational plan;
8) Risk assessment and insurance;
9) Legal plan;
10) Financial plan and budget;
11) Management plan;
12) Applications.

Sections and parts of business plans depend, first of all, on the goals set by entrepreneurs before themselves. Simply put: what they want?

Attract external capital, model the management of the future enterprise, identify previously obstacles and problems, develop their own managerial habits, and check the viability of the main idea before its implementation?

The specificity of enterprise outline means that they are complex documents that show all the main aspects of projects, they consider a wide range of problems that an entrepreneur or company can face, and ways of solving them are determined.

What else to keep in mind? In the process of developing a document of this type, many factors specific to the particular project have to be taken into account. For example, if an entrepreneur wants to run a network of Australian paper writing services, he has to adjust his outline in accordance with this sphere of activity, but not something else that does not relate to this business. This is an essential rule.

Of course, many businessmen survive and achieve success even without engaging in planning, which means that having this outline is not a guarantee of your success. But if you devote enough time to preparing this document, you will clarify your thoughts and understand what exactly you need to achieve in the first place. Thus, it is important to do it! And the numbers mentioned or indicated in the document, will confirm your intuition, or point out that you need to pay attention to other segments of the market. And, of course, expressing goals in the structured and detailed plan will give you more competitive ability.