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How to develop a Business plan

The business plan is a program of entrepreneurial activity. He describes the company’s planned products or services, market their implementation, financial needs and planned financial results. It is used for:

1. investment attraction;
2. of the loan;
3. a sober assessment of the real possibilities

To develop a business plan that can lead to success, it is necessary to spend a lot of time.

You will need to collect and analyze large amounts of information, sometimes to re-examine the information collected or to conduct additional studies.

For the successful implementation of the business plan You need to examine the legislative framework regulating the activities You are interested in business. First of all you need to know is licensed if this type of entrepreneurial activity. And also learn about the changes made in the legislation for the proper payment of taxes and for the use of the tax benefits.

The scope and content of the business plan will vary depending on the purpose of entrepreneurial initiatives and the chosen field of activity.

In the Layout section of the Business plan presents models of business plans and recommendations to their writing, recommended by various structures.

Currently, there are no specific methods of preparation of the business plan, however, the overall structure of the business plan, in accordance with the standards of UNIDO must adhere to the following main sections:

1. Summary
2. Description of business and industry
3. Description of products (services)
4. Marketing and sales of products (services)
5. Production plan
6. The organizational plan
7. Financial plan
8. The focus and efficiency of the project
9. Risks and safeguards

  1. Summary

A resume is a self-promotional document, because it contains the basic provisions of the entire business plan. This is the only part that will be read by the majority of potential investors. And the investor will want first of all to know the following information: the amount of the loan for any purpose, expected maturity, guarantees, who else is going to invest in the project, which own funds there.

     2.  Description of business and industry

This section describes:

• General information about the company
• Financial-economic performance of the company
• Management structure and staffing
• Activities, products, achievements and prospects
• Sector of the economy and its prospects
• Partnerships and social activity

     3.  Description of products (services)

In this section You should give a definition and description of the products or services that will be offered on the market. Here it is necessary to specify some aspects of the technology needed to produce Your products or services. It is important that this part was written in clear, precise language, understandable to the layman, do not use professional jargon.

Describe the main characteristics of your products, with emphasize on the benefits that Your product carries potential buyers.

It is important that you emphasized the uniqueness of Your products or services: new technology, product quality, low cost, or some special dignity that meet the needs of customers. It is also necessary that you emphasized the possibility of improvement of the products (services).

Describe existing patents or copyrights for inventions or give other reasons that could prevent the invasion of competitors in Your market. Such causes may include the exclusive rights to distribute or brand.

     4.   Marketing and sales of products (services)

A marketing plan is necessary so that potential customers into real. This plan must show why customers will buy your products or use Your services. You need to consider and explain to potential partners or investors the main elements of the marketing plan: the pricing scheme of distribution, advertising, methods of sales promotion, the organization of after-sales support, the image formation. If you do not have special education, you should read books on marketing, seek advice from the experts.

  1. Production plan

This section must describe all of the industrial or other work processes in your company. Here you have to consider all questions connected with the premises, their location, equipment, staff. The same should be paid attention to planned subcontracting.

You should briefly explain how the system is organized production (services) and how control over production processes.

You should also pay attention to the location of production areas and equipment layout. Finally, this section should reflect the issues related to the timing of deliveries, number of providers and how quickly it can be increased or reduced output.

     6.   The organizational plan

This section explains how the steering group and describes the main role of each member. Demonstrates command of project management and leading specialists, legal security, actual or possible support and incentives, organizational structure and implementation schedule of the project. This section should provide information about your partners, their capabilities and experience. You must illuminate the mechanism of support and motivation of key leaders, to provide how you are going to interest them in the achievement of business plan objectives. So check how you will be paid for their work (for example: salary, bonuses, equity participation in profits).

   7.   Financial plan

The purpose of the section is to show the main points from the mass of financial data.

Here are the guidelines for financial and economic calculations, are direct (variable) and fixed costs of production, cost of production, cost estimates for the project, the need and funding sources, is calculated table of costs and revenues, the flow of real money (cash flow), the projected balance sheet.

   8. The focus and efficiency of the project

In section specifies the direction and significance of the project, performance measures for its implementation, is the sensitivity analysis of the project.

   9.   Risks and safeguards

Find business risks and possible force majeure, are money-back guarantees partners and investors.

This post is also available in Russian: Как разработать Бизнес-план