Simple and practical business plan
To develop a business plan, it is important to understand what this management tool means. A business plan is a document used to plan a company or business unit, whether in its initial stages or not, with the aim of defining and describing its operating strategy for the future. It is also a guide to the strategic management of a business or business unit.
Business Plan as a Guide
Its development becomes clearer when analyzing the entrepreneurial process. Because business plans are widely used by entrepreneurs who compose the creation of new businesses, they can be understood as a guide for planning a new business or even for planning a new business unit, in the case of an established company. In many situations, the entrepreneur’s personality determines business success. Therefore, some positive habits need to be a part of everyday life. Motivational readings like 7 habits of highly effective pdf are highly recommended.
But why plan? When answering this question, the entrepreneur must think of the business plan as an aid tool in the planning process and not as an obligation. A business that is created without planning is a company known as a “lifestyle” where entrepreneurs do not have a clear vision of growth and what the company is like in 5, 10, or 20 years. Therefore, when setting growth goals for the business, both in relation to revenue, profits, number of customers, market share, etc., it becomes increasingly clear the need to plan every step that will be taken so that the goal is achieved.
Steps to facilitate the work of entrepreneurs
The entrepreneurial process summarizes these steps to facilitate the work of the entrepreneur. Starting with a business idea is usually the starting point for every company. Then, the opportunity is analyzed, which is trying to understand whether the idea you have has the potential for economic viability, and having potential customers in the market to consume the product or service that results from the idea. After opportunities are identified, a business plan is developed. A complete business plan will enable entrepreneurs to identify the number of resources needed and sources available to finance the business. After these initial steps, company management begins. Note that the process can be very dynamic and the steps can be reviewed anytime, interactively. It is important for entrepreneurs to plan their business structuring process from the analysis of initial ideas to find out whether they are opportunities, to then choose the best opportunity, develop a business plan, and, thus, be able to dedicate themselves to the management of the company.
The importance of review
It is clear from the analysis of the entrepreneurial process that a business plan can and must also be used after business establishment. In this way, it will be the entrepreneur’s responsibility to periodically review and update his business plan to ensure that the implementation of the business strategy takes place properly. The time limit for this review may vary depending on the type of business and market in which the company operates. The entrepreneur must remember that the business plan must be revised as soon as the important premise is used in the projected change in the plan. Important assumptions can include: variations in market growth rates, entry of new competitors in the market, changes in laws that directly affect your business, reviewing strategic partnerships, and winning or losing important customers (representing a large percentage of the company’s corporate earnings: 10, 20, 30%), etc.
No strict rules or a single methodology
There are no strict rules or a single methodology for developing a business plan, but a good starting point is to plan activities that must be developed, including tasks, managers, deadlines, and desired outcomes. This will make it easier to get your business plan in a reasonable time so that you can control the activities. Business plans will hardly be developed in a single-step sequence. It is likely that many interactions will occur and after several sections are completed, you will need to review them when a topic that applies to more than one section has been changed. It is important to be clear about the level of detail sought for the plan and the deadlines set for completing it, otherwise, you will never get the final version of your business plan.
The possible sequence for developing a business plan starts with analyzing opportunities (following the entrepreneurial process) and then proceeding to rigorous market analysis, target audience, and competitors. From there you can dedicate yourself to defining: a) your business model (what should be sold, what business is, how to sell, to whom, what price, marketing plan …) and initial projections of income, b) initial investment needed, c) human resource needs, d) project costs, expenses and income from time to time, e) closing the business model by matching resource requirements with results, f) making financial reports, g) conducting a feasibility analysis through investment returns, profitability, etc., h) a complete review of all steps, i) completing the writing of the plan and closing the model.
Note that all the steps shown can be done without you having to dedicate yourself, from the beginning to write a complete business plan. The steps listed above suggest that you create a spreadsheet with several linked folders. Thus, when certain critical variables in your business plan are changed, all folders that depend on this variable will be updated automatically.