You have an idea for your business activity but you are not sure if your business is going to be profitable and you do not know in which direction it should develop? Are you looking for capital for development of your company? A helpful tool for you will be a business plan. It allows you to set goals and methods of action, assess the profitability of planned enterprise and evaluate the risk of failure. It will be a very important document not only for planning but also in case of attempting to obtain funds for investments e.g. from a bank (you can find more information on financing your business activity in the section Subsidy and financing your business activity.
Parts of business plan
Irrespective of type and size of planned activity, basic elements of business plan are similar and they should consist of:
Introduction – here you should present and justify your idea to future readers of business plan. Keep in mind that your idea should stand out. Specify clearly your mission and goals of your company – short-term as well as long-term.
Description of the company – will allow recipients of your business plan to become acquainted with your activity Here you should specify such information as: material resources, human resources and the company's experience. Moreover, describe how the organisational scheme looks like and who (qualifications, experiences necessary in an enterprise) carries out particular functions.
Products/services – that is what you want to sell, phase of development of your products/services and the date of entering the market. Describe them, compare with competition and show your competitive advantage. Stick to facts and support with figures. If it is possible, give results of studies or tests. Use language which is clear for unprofessional recipients. If you have licenses, ownership right, patent, registered trademark or utility model - write about it.
Market and clients –here you should elaborate on the topic of market and clients. Describe the potential customers and how you are going to target them and what needs will your offer meet. Other information which should be included concern the market on which you want to operate, in what phase the market is and which direction it is going to develop. The important thing is expected share in the market ( write if you carried out any market and clients' preferences research – if you are planning to do it, state the person in charge of it and the cost).
Strategy of the company – here present the methods of production/ provision of services. Characterize the registered office of your company and equipment which you need to realise your business objectives. Provide information on planned employment and introduce the team Potential investor already knows your product/ service but it is worth describing how you will deliver them to clients (distribution channels e.g. Internet, wholesale, retail, own chain of shops etc.) and who will be responsible for sale. Describe also after- sales services, warranty, refund policy etc. Explain the pricing policy and the activities connected with promotion and advertising. You might find useful the 4 P's principle, consisting of: 1. Product, 2.Price, 3. Promotion, 4.Place.
Finances – remember that from the perspective of potential customers the financial assessment of your enterprise will be the most important part of your business plan. Try to dedicate to it a lot of attention. You need to convince investor that your project is viable for him. In order to do so, you need to present financial forecast with: profit and loss statement i.e. expected expenses and revenues ( usually for 5 years), balance ( it will allow to measure growth and development in some period of time), cash flow. One needs to calculate the break-even point and profitability ratio. This part should also contain details on what amount of credit ( loan, capital contribution) you expect with clear indication on what it will be spent. It is important to inform capital provider (bank, fund) about the amount of credit that you will be able to repay in the next few years. In addition, you should specify how the financial side of your activity will look like after repayment of external support. Keep in mind that all the data used for calculations in the financial part must result from plans and assumptions, must be solid and credible.
Control of business activity – very important for the assessment of your business plan will be the approach to control and monitoring of the activities of company. Write how and how often financial control will be conducted and by whom. Specify how you will monitor sales (which system of sales registration), promotion, advertising. In addition, submit information on the forms of controlling of production/ provision of services, quality and complaints, human resources and products/services development plans.
Attachments – that is documentation confirming information from a business plan. It consists of: CVs of key persons, projects and technical data, patent documents, copyrights, researches and analysis regarding products/services and market, information on preliminary contracts, orders etc., scheme of organisational structure of the company and data on professional consultants and chartered accountants.