What is a (good) business plan?
You want create your business ? You will necessarily have to write a business plan. Definition of this somewhat intimidating Anglicism: it is a written document that synthesizes the ins and outs of a entrepreneurial project. It is also called business plan. The purpose of this document is to convince investors to grant you funds. It is also about having a repository on which you can rely to launch your activity. As a future company manager, it's up to you to write it. I give you all useful explanations about the business plan in this article.
Business plan: definition and objectives
Theimportance of the business plan is essential in any entrepreneurial project: business creation, take back the enterprise, development of new projects. More concretely, a business plan, what is it for ?
- It helps you to measure your strengths and weaknesses, to plan, to quantify. If you are wondering for example how to make a cash flow forecast, know that establishing a business plan helps you see more clearly. It is indeed at this stage that you put on paper the first quantified elements of your project.
- It allows you to check the viability of the project from a strategic and financial point of view.
- It gives you an overview of the development of your business in its first years of life. It allows you to follow forecasts and analyze deviations from them.
- Theusefulness of the business plan expresses itself fully when seeking financing and partnerships (loans from banks, State subsidies and aid, participation in the capital of external investors, preferential tariffs and payment terms with suppliers, etc.). It helps you convince these partners the sustainability of your project and its financial strength.
The components of the business plan
The economic study of the business plan: presentation of the business model
- The activity: products and services. Take some examples of business plans : that of a restaurant, an e-commerce in essential oils and a plumber. The restaurant business plan will give an example of a menu; that of e-commerce product descriptions (HE, broadcasters, etc.); that of the plumber details of his services (unblocking / repair / installation of WC / tap / boiler, etc.). Linger here on your unique selling point !
- Economic potential and market needs to which the project responds, as well as the target customers and the competition. It is necessary very precisely target customers during this step. All of these are based on themarket research which must be carried out upstream.
- The project leader and his team. It's about you! Highlight your skills, career and experience as well as your motivations.
- Commercial and marketing strategy. It is very important to know present his commercial strategy to arouse the interest of the interlocutors. Communication strategy, pricing policy, distribution methods, major stages of development, etc. : you have to say everything.
- Legal status, tax models, location and room chosen.
The financial plan of the business plan: definition of needs
You detail your financing needs and the returns on investments (ROI) expected. This makes it possible to develop a cash flow forecast. Here we must find:
- the forecast income statement;
- the provisional balance sheet;
- the provisional financing plan;
- the cash budget.
The need in funds may also appear in the business plan, as can self-financing capacity and various financial ratios. Don't forget to project the financial development of the business over three to five years.
How to write a business plan?
Know that you must integrate the summary of your market research into the business plan. You must already have at this stage concrete elements and have a sufficiently mature basis to be able to develop a realistic project.
The structure of a business plan is articulated between economic study and financial plan. In addition to these two parts, you must write a summary of your business plan, theexecutive summary, to be placed at the beginning of the file. It is he who will make your interlocutors want to devote a little time to the study of your project. It succinctly summarizes all the elements of the economic study and the financial plan with the help of a few key figures and fundamental points.
The number of pages for a business plan revolves around ten to twenty pages, but this rule is not fixed. The most important thing is to personalize the file according to your profile, your project and the contact person to whom you intend it. Avoid relying only on the most optimistic assumptions: bankers are not fools. You will gain credibility by taking into account possible discounts and different possibilities for development in the coming years.
You now know everything about the business plan, definition, issues and components of this file that thrills beginning entrepreneurs. It's time to take action!
If you want support during this important step, contact me !