How to create a business plan for a small business
Making a business plan is nothing more than anticipating situations and creating strategies. Nowadays, digital tools prove to be excellent ways to deal with the crisis, and work with creativity and innovation is a good idea! We must be prepared to face challenges and, most importantly, overcome them. The best way to prepare a business plan is to have a good understanding of the market and project all the actions!
What is a business plan?
A business plan is a document that contains the objectives of the business and its purposes. It will help in making decisions and investments related to the future of the company. The business plan aims to answer the questions: when, how, why, and with whom to do business.
Why is a business plan so important?
Through the business plan, you will have an initial idea of how the company will work in the market, the technical issues necessary for the operation, the investment and projection of financial return, and many other aspects!
To make a business, plan you need to have access to several information:
1. Executive Summary: The executive summary is the first part of the business plan. Here the most important information is summarized: description of the company and its differential in the market, the mission and vision, who are the customers, description of the staff profile, legal form, etc. The executive summary must be brief, precise, and creative to capture attention.
2. Market Analysis: Analyzing the market is essential to understand customers, the competition, and suppliers better. It is crucial to explore these three topics:
- Clients segmentation: One of the essential steps in the plan is to understand who will consume the product or service and reach them. We need to know the buyer’s habits and aspects of their profile: their age, gender, education and marital status, frequency of purchase of this type of product/service, location, and reasons for purchase.
- Analysis of the competitors: Competitors operate in the same industry, and it is vital to be aware of their business. You can also learn lessons about what to do and not to do when analyzing their behavior. The first step in the competition analysis is to check their strengths and weaknesses and make comparisons. For example, a competitor’s product/service quality, price, customer service, delivery services, promotions carried out, reasons for purchase, business differential that justifies buying my product, and not the one from competitors.
- Analysis of the suppliers: Your suppliers are responsible for the raw material, equipment and other goods necessary for your business’s operation. A suitable procedure involves looking for contacts on different channels (internet, catalogs, etc.) and maintaining an updated and diversified list of suppliers to decide which will be the best cost-benefit for the company.
3. Marketing plan: The marketing plan will describe all products and services and present the sales strategy for those products and plan to get them to customers. It is important to see clarified: what product it is and how we describe it if its price is adequate to quality, if it stands out from the competition if the distribution plan is appropriate, and most important of all, how will the customer know that the product/service exists.
4. Operational plan: The operational plan describes the enterprise’s operation and the steps required to sell the product/service. It is essential to estimate how much will be sold in a determined period, to have a better understanding of the time of the entire process of selling.
5. Financial plan: At the end of the analysis of the product/service competence, we will know if there will be space in the market or not, so it is time to do the financial plan. All actions involving money, expenses, investments, and capital planned in the development of the project are calculated here, such as raw material, suppliers, equipment, physical establishments, domains and hosting of online presences, salaries, marketing, etc. The numerical result of all this is the Financial Plan, and with it there is a sense of the total investment of the business. Using the right tools and software for better control of finances is a good practice. It will make life easier for all employees. Everest is a good option for different businesses because it allows you to manage team expenses and control spending through a smart dashboard. Get more info here.
6. Analysis: Now that your business plan is structured, it is important to create simulations with opposite situations: business going well and business going not so well. It will be possible to prepare better for adverse situations, creating concrete plans to face them. Taking risks is part of an entrepreneur’s life. Creativity and innovation are two characteristics that will dictate whether your business is ready to move on and be successful.
The business plan is essential for business, and the lack of a plan can cause bankruptcy in several companies. It is not a good idea to open the company’s door without having a strategy and knowing what to do to make a profit and keep the obligations in days. Keep in mind that creating a business plan is not a one-time step for your company. It can also be beneficial for companies that already operate in the market, but need to reposition themselves or intend to launch a new product or service on the market.