Before setting up a business or developing an activity, it is highly recommended to develop a business plan.
The latter not only makes it possible to clarify an entrepreneurial project and assess its economic and financial viability in the market, but also serves as a medium to communicate the company’s future results (newly created or existing) to its potential partners (financiers, partners, etc.) with a view to on obtaining financing or financial support.
In all cases, a business plan crucial to the success of your business.
We will look throughout this article, the interest in creating a business plan and what plan you need to do it yourself, you can also leave the realization of your business plan to an expert.
What is a business plan?
ONE business plan Where business plan is a multi-page document that defines the entrepreneurial project of a company creator or an existing company that wants to test the launch of a new product or enter a new market, etc.
The business plan also has other goals, including:
- validate the feasibility of the business creation project (see if the project has a market);
- validate the economic viability of the future business through the economic forecast;
- communicate the company’s future results to raise funds from investors, to obtain state aid or to apply for a loan from the bank;
- also serves as a management tool and roadmap that helps guide the business leader in its launch and in its day-to-day management in the first years of activity, it is therefore a common thread.
What plan do you need to write your business plan?
In a business plan, it is recommended to have the following elements:
- presentation of the project, the contractor and his team;
- Presentation of products and services;
- presentation of the market research;
- description of the commercial strategy and business model;
- financial forecast tables;
- appendix: an optional section that contains documents such as CV, complete market analysis, license, etc.
Step 1: Summary
It is a summary of the company’s main purpose, as well as a brief description of the products or services offered, it is presented first in the business plan and is ideally only two pages long. It is important to write it last after the complete completion of the business plan.
An effective summary should include the following elements:
- a brief description of the company and its team;
- a brief description of the products and services to be sold;
- a summary of goals and a launch plan;
- a summary description of the market (rapid examination of competition and target group, etc.);
- overview of financing needs (the amount of financing required to start the project).
The summary is the entrance to your business planremember to write it to make your reader want to move on in his reading.
Step 2: presentation of the project, the entrepreneur and his team
In this first part, the project manager must explain his idea in a clear and precise way, his experiences, his skills and also introduce the team he wants to work with. A resume for each team member is recommended as an appendix to the business plan.
Step 3: presentation of products and services
This section contains information about the products or services that will be offered by the company. For example, it should be explained:
- how the products or services work;
- the added value of the product or service and why it is better than what the competitors offer.
Step 4: Market research
Market research, which is an essential part of the business plan, consists of studying the various components of the market on which the future company will operate (for example, knowing if there is a market for the proposed solution) and therefore designing the best commercial strategy. performed by the project manager.
Market research mainly answers the following questions:
- who is my target market? What’s his size? ;
- who is my target audience and what are their characteristics (financial opportunities, spending habits, age, geography, etc.);
- what are the most strategic geographical areas for my business? ;
- who are my competitors and what are their characteristics (products and services, strengths, weaknesses, prices charged, etc.);
- Who are my potential suppliers (delivery time, agreed payment date, etc.)? ;
- what are the distribution channels in my sector? ;
- What rules are likely to affect my activity? ;
- what are the threats and opportunities in my environment? The SWOT analysis answers this question.
The quality of the information in the business plan depends mainly on the quality of the information collected during the market research phase. This process can be delegated by experts (specialist company, company creation consultant, etc.) or performed by the project manager himself before the business plan is prepared.
If you want to perform this task yourself, start by identifying your target market as well as your ideal customers, once these elements are known, you can start analyzing your market.
Step 5: presentation of the commercial strategy and its business model
Based on the results of the market research, the project manager can present his own commercial strategy as well as his business model, which includes:
- the definition of the business model: the way in which the company intends to make money;
- the selling price of its products or services: the formulas offered (price list, falling prices, etc.), etc.
- the marketing strategy: how the company intends to persuade its customers to buy its products and services;
- communication: advertising, networks, trade fairs, forums, exhibitions, etc. ;
- the distribution strategy: the channels through which the company will sell its products or services (physical store, online, distributors or other intermediaries, etc.).
Step 6: presentation of financial forecasts
In this phase, it is a matter of presenting the preliminary accounts for the project, where the financial consequences of the various decisions taken by the business creator will be examined. These financial statements make it possible to validate the business model (or the financial model) and thus the financial viability of the future company.
Among the most important documents (generally prepared over 3 years) that enable this assessment, we distinguish between the financing plan, the expected income statement and the cash flow plan.
The financing plan highlights the financial resources made available by the project manager and compares them with his financial needs. It therefore makes it possible to know whether these resources are able to meet these needs in the first years of launch.
The expected income statement makes it possible to assess whether the future company is able to generate a profit or not (in the event of a difference between the expected income and the expected expenses, etc.).
The cash flow plan makes it possible to measure and compare expected inflows and outflows in order to understand the need for working capital and the delay in the cash cycle.
Step 7: the supplement
In which you can include any information or documents that you find useful and that you can not put in the business plan with the risk of burdening it (example: CV of the entrepreneur and the founding members, complete market research, etc.). If the attachment is long, you can add a table of contents at the beginning of this section.
Advice for developing an effective business plan
A business plan must be precise, simple and easy to understand in order to attract the attention of funders.it must not be short or too long, a number between 20 and 40 pages is sufficient.
Conduct your on-site market research (search for information where they are, do not hesitate to meet your ideal customers, see how they make their purchasing decision, what they expect, their forecasts regarding their expenses, etc. One of the effective methods to test your market is to try to sell your product or service as if it already existed, your products or services.
Tailor your business plan to your target audience (the people you want to convince): The readers of a business plan are not the same. A banker will know if your company is able to repay the granted loan, he will be aware of certain indicators such as repayment ability, etc. In the meantime, the investor wants to know if your company will be profitable in the future and that it will be able to recoup its investment (return on investment), he will be aware of indicators such as growth rate and economic profitability.
Be objective, realistic and relevant in your assumptions about what is happening in the economy and in your industry.
Finally, the realization of a business plan requires a lot of reflection, preparation and rigor, if you do not have the skills or time to do so, leave this work to an expert who specializes in the realization of the business plan. If you have already written it and you are not sure that your work is coherent, do not hesitate to get it validated by a professional before presenting it to your potential financiers, mistakes will only damage your professional image.