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Develop a Business Plan!

The importance of a business plan can be compared with the importance of a building project. If the architect is knowledgeable and the workers understand him and observe the project, the building will resist in time and bring the expected benefits to both the constructors and tenants.
 
The business plan defines your activity, setting up the short, medium, and long term enterprise objectives and ways for accomplishing them. It also helps you to efficiently allocate the resources and make the most adequate decisions in the right time.

A business plan pursues three main goals:

  • to schedule the activities in time and delimit the range
  • to ensure an efficient management
  • to attract funds and strategic partners

As a program document, the business plan guides you through all business stages, helping you to protect your actions. At the same time, it highlights the possible barriers and ways by which you can overcome such barriers. It is important to periodically review this document, depending on the market conjuncture and your own possibilities at a certain moment, since it is also a managerial tool that helps you monitor and assess both progress achieved and mistakes made. On the other hand, it serves as a means of communication in attracting funds and signing some profitable alliances.

A business plan contains a description of your business, including data about market conjuncture, competitors, marketing strategies, and financial data.

Structure of a business plan

Nr. Component elements Content
1 Title page
  • Enterprise name and logo
  • Address, telephone / fax numbers, e-mail address
  • Contacting person
  • Date of business plan development
  • Mentions about information confidentiality
2 Contents

Will indicate the chapters and page number where each is located

3 Table of attachments

Will include the number and title of each attachment, as well as the page number where each is located

4

Table of acronyms -  optional

Acronyms + decoded form of these (if they are used in the text)

5 Executive summary

This chapter cumulates and highlights the key points of a business plan. It is of particular importance, since it is the first part of the business plan contents and would, therefore, be read in the first instance by potential creditors or investors, creating the first impression. If the latter is negative, there is a risk that the remaining text won't be looked through. This is why it is necessary to formulate concisely, but also dynamically the business plan goal, market description, and strategic directions of the business, and to mention the income sources and expected profit.

6 Enterprise description

Includes relevant information about:

  • legal form and registration documents
  • area of activity
  • founders, partners
  • enterprise background (if there exists any, respectively if the company is not at the starting point)
  • equipment and machinery, premises, offices, etc..
  • business objectives

For additional information, one can mention a web page (if there exists one)

7 Market analysis
  • industry / trade market characteristics (market size and structure)
  • market development (dynamics and trends)
  • market segments
  • number of existing clients (if there are such) and/ or potential clients
  • information about the competitive environment (eventually information about the market share of competing firms)
  • market research summaries available
8

Presentation of product(s)  / service (s)

This chapter can include information about:

  • product mix/ services
  • production / provision process
  • ownership rights on products / services
  • registered brand (if such exists)
  • quality certification
  • comparative advantages
  • planned (new) product / service launchings
9

Marketing policies

  • Results of marketing studies – as a basis for developing strategies and plans (market studies, consumer behavior studies)
  • Marketing audit report (if such has been carried out)
  • Marketing strategies
  • Marketing mix – by describing each policy separately
  • Procedures for controlling the marketing activity
  • Marketing plan (including promotion plan)
10

Financial analysis

  • Current financial situation (information from various accounting reports – if the company is already operating)
  • Monthly/annual cash flows
  • Balance of accounts receivable / accounts payable
  • Break-even analysis
  • Financial ratios
  • Projected sales / revenues /costs.
11

Company management and staff related information

  • Enterprise organizational structure
  • Key staff – description of skills and responsibilities of the managers and other employees
  • Staff motivation and professional development strategies
  • Plans for creating new jobs
  • Development strategies
12  

Conclusions

13  

Action plan, including implementation deadlines

14 Attachments

The attachments are very important, particularly for obtaining funds and establishing strategic partnerships.

  • Pictures with products/ services
  • Research and audit reports
  • Promotional handouts
  • Financial statements
  • Balance sheet
  • Copies of key contracts
  • Copies of partnership agreements

Other relevant documents about enterprise activity and/or intentions

Business plan models

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