What is a business plan?
A business plan will help give structure to your business idea or project, among other things that we detail below
A business plan is a formal approach to an idea, project or business initiative with a set of objectives, which is constituted as a projection and evaluation phase. It is used internally by the administration for planning tasks, and is used to turn to banks or potential investors, to request financing or to invest in the business.
In the business plan the general and specific objectives of the company, the strategy to achieve these objectives, the organizational structure, the investment required to finance your project and the solutions to solve the problems that may appear should appear in detail. Learn more business plan
The business plan or business plan can be a commercial representation of the model to be followed. It is a graphic structuring of what the business is or will have to be. It is also considered a synthesis of how the owner of a business, administrator, or entrepreneur will try to organize a business effort and carry out the necessary and sufficient activities for it to be successful. The plan is a written explanation of the business model of the company to be launched.
General structure of a business plan
Any business plan consists of the following parts, which we will detail below.
- Executive summary: The executive summary synthesizes the entire business project, giving the main points. It should always include a brief description of the business, the reasons that drive us to start it, the estimated investment required and the viability of the project, in short, justify the profitability of the project.
- Business definition: It serves to describe what products or services we are going to offer, including the name of the business and the geographic delimitation of the project. In the same way, we must establish the objectives we have in mind and how we are going to try to achieve them. That is, the strategies that we are going to use.
- Organization: It reveals the organization chart of the business. It is about explaining how the business is going to function based on a structure with differentiation of functions. The areas or departments, the positions and functions, the personnel requirement, the personnel costs and the information systems are included in this sector.
- Market study: In this study we must define the target audience or ideal client, to establish the market niche in which the business will be developed, as well as its main characteristics. We must also analyze future direct and indirect competition, analyzing demand and the marketing plan.
- Investment and financing study: This is where the detailed investment calculations that we are going to need to start the business go and how to assume the expenses, especially until sufficient income is achieved so that the business is maintained independently. Also, the need for external financing is exposed in case it is necessary.
- Technical study: It serves to describe the physical space required for the operation of the business, the production process, the infrastructure and the size of the premises, the production capacity and the plant layout.
- Study of income and expenses: The calculation of the income and expenses that the business will incur. This section should include an estimate of sales, the projected cash or cash flow budget, and the projected operating budget or profit and loss statement.
- Project evaluation: It is the last part. In it, a financial plan for the future business must appear, in which it must appear when we will be able to amortize the investment as well as the profitability indicators that we have used.
- SWOT Model: It is a tool for studying the situation of a company, institution, project or person, analyzing its internal characteristics (Weaknesses and Strengths) and its external situation (Threats and Opportunities) in a square matrix. We analyze the real possibilities of those who are going to implement the business and in the case of being in operation the state of the company.
What benefits can the business plan have?
The business plans have the following utilities, which we are going to detail below.
It is a tool to properly plan the start-up of the business prior to the beginning of the investment.
Facilitates obtaining bank financing. It contains the forecast of economic and financial statements of the business and adequately reports on its viability and solvency, so it can be very useful in this direction.
- Facilitates negotiation with suppliers to obtain better conditions.
- It can help attract investment, partners or collaborators.
- Facilitates financial planning.
- Set specific and general goals.
- Clearly define the expected end results.
- Establish measurement criteria to know what your achievements are.
- Anticipate difficulties that may arise and possible corrective measures.
- Identify potential opportunities to take advantage of in your application.
- It involves executives who are going to participate in its application in its preparation.
- Appoint a coordinator or person responsible for your application.
- It has programs for its realization.
- It is clear, concise and informative.
We know that a business plan can have different levels of complexity and that it takes time, but it will help you to have a clearer vision of the challenges you will have to address to move your business forward.
Csclick provides business plan creation and business consulting services for those who need it. We contact and help you find the path that your company needs.