If this is the first time you have to write a business plan, you must ask yourself some questions; what is a business plan, what is it for, how to write it, etc.? Discover all about the business plan below.
1. Definition of a business plan
A business plan is a synthetic document that allows an entrepreneur to present the ins and outs of his project simply and effectively.
It must present in a reasoned way the need for financing and the potential profitability of the project as well as the vision of the future leader concerning his company.
2. What is a business plan used for?
You must build a business plan when you plan to create a business, take over one or modify the activity of your existing business (addition or deletion). This document has one and only objective; to convince its recipient. In terms of its purposes, the business plan is essentially intended to:
- Reassure you about the feasibility, profitability, and sustainability of your project,
- Allow you to obtain a bank loan,
- Authorize you to bring investors into the capital of the company,
- Allow you to benefit from advantageous payment terms from future partners.
3. Who is a business plan for?
There are three categories of people to whom the business plan is likely to be addressed:
The creator of the company. Indeed, as the "boss" of the company, the latter has to be able to make a logical plan of all the activities of his company. He is the person par excellence with an overall vision of the company in all its activities. The business plan is, therefore, a "tool" allowing the entrepreneur to make his project coherent, which serves him to clarify his own thoughts, but also to have a better power of persuasion in discussions with bankers or with promoters because knowledge of the business plan gives a better overall vision to the entrepreneur and therefore allows him to better defend his project if necessary.
Then, this business plan allows to communicate. This, therefore, assumes that this document is also intended for investors such as business angels. But also for bankers (one of whose first reflexes when a company director comes to ask them for a loan is to read the project of the said company carefully; therefore, the "business plan"). It is, therefore, one of the many facets of the external representation of the company.
Finally, this document can also be addressed to the employees of the company. After all, they are the first concerned by what is done with their work, so it is only natural that they know what exactly the goal is towards the company to which they belong.
4. What is the standard structure of a business plan?
A business plan generally follows the following order:
- Company (who are we?)
- Products and Services (what do we sell?)
- Market research (to whom?)
- Strategy (how? who are our competitors? what is the timeline?)
- Operations (how is the product made?)
- Financial Plan (what are the financial needs? what is the return on investment?)
5. Building a business plan: how to structure the business plan?
The construction of the business plan usually follows logical reasoning, which demonstrates step by step that the business project is built and viable.
The planned activity can generate significant profits:
- There is a strong unmet need
- The solution envisaged meets this need and is sufficiently attractive to trigger a purchase
- This need concerns a large number of potential customers
- This activity will generate significant turnover and will be profitable
The team includes complementary profiles that bring together:
- The necessary technical, commercial and financial skills
- Experience and contacts on the market
- The ability to run a business
The company will have a large and sustainable market share:
- The actual or potential competitors are identified
- The company enjoys competitive advantages
- Competitors are penalized
6. What does a business plan contain?
The content of the business plan varies according to the type of project. However, you must, at least mention in this document:
The activity of the company: present your products or services by highlighting the advantages of your offer.
The management team: show that the management is made up of people whose skills combine to carry out this project
Market research: demonstrate that the business opportunity is real. Define your target customers as precisely as possible.
The strategy: explain how you will differentiate yourself from your main competitors and how you will find customers.
The financial plan: what are the financial needs and the expected returns on investment?
7. When to make a business plan?
There are two kinds of cases in which writing the business plan is necessary.
The creation of the business as a franchise or not. This is undoubtedly one of the crucial stages in the life of a company; it is also the moment when it is most necessary to clarify one's ideas by writing them down on paper because the number of subjects of reflection is extremely broad. A fledgling business also requires funds and resources to get started well in its industry. The business plan is one more weapon in the arsenal of the entrepreneur to interest potential promoters and thus increase the company's figures according to the cash flow and resource costs for the implementation of these steps.
The establishment of new activities. When launching new activities, it is necessary to have the ideas as clear as the company's launch. The reflection is moreover more or less similar, because it is a question, here again, of displaying the whole of the project, the objectives, the strategies of the company, the profitability, the study of the costs, the rest work to do, etc.
8. How to write a business plan?
An effective way to write your business plan is to use specialized software.
Indeed, business plan software has many advantages:
Efficiency: you are guided with a precise plan, examples, and advice to follow so as not to omit anything
Time-saving: easy to use, the software allows you not to waste time with calculations and formatting the plan
Professionalism: the rendering of your business plan is very qualitative and will help you make a good impression on your partners.