What main sections should be included in a business plan?
Hello dear readers! Starting or growing a business often requires the development of a business plan. It may be needed not only to obtain investment support from the outside, but also to understand the business development strategy.
Business plans are developed not randomly, but according to certain standards. There are several popular standards in the world, the most common of which is UNIDO. It implies the presence of certain chapters that reveal the essence of the project, as well as allowing a general assessment of its prospects.
In this article, we will look at the main sections of the business plan that are included in the UNIDO standard. None of them can be excluded, otherwise the document will be incomplete.
But before continuing, a little introduction.
The essence of the business plan
This is a comprehensive document required:
- to search for investors at the initial stage of creating an enterprise, when expanding production, launching a new investment project;
- to apply for loans to banking structures;
- to receive state support in the form of a subsidy or grant (for example, for a peasant farm);
- to provide to new founders when expanding an existing enterprise;
- when entering the international level, creating branches or subsidiaries.
Based on the business plan, investors, banks or founders of the company make a decision to invest and join the project.
Main sections
Let's move on to a brief overview of the parts of a business plan. I remind you that none of them can be ignored, as this will lose the integrity of the document.
Title page and content
The presentation of the project begins with the title. He contains:
- Project name;
- name of the enterprise, its address;
- contact details and full name of the applicant;
- date of compilation;
- brief essence of the business plan (1 or 2 sentences).
Summary
The executive summary is one of the main sections of a business plan. It briefly reflects the entire project, its pros and cons, the amount of necessary investments, net profit, payback periods and other most important characteristics.
The summary should reflect the attractiveness of the project, as investors will not read the document further if they are not interested at the initial stage of studying it. Based on the fact that this is the “selling” part of the business plan, it should be compressed to a minimum, but at the same time reflect all stages of the project.
The peculiarity of this section is that it is compiled at the very last turn, when the remaining chapters have already been thoroughly worked out. However, in the document itself, the summary is located immediately after the table of contents.
It consists of 3 parts:
- An introduction that reflects the goals of the project and its essence.
- The main part, which describes all the key points of the plan - the type of activity, funding sources, implementation stages, risks, etc.
- Conclusion - it contains all the factors for the predicted success of the project, as well as describes the actions taken to implement it and maximize profits.
The rest of the business plan is a detailed breakdown of the key points.
Description of the enterprise and industry
Here it is necessary to describe in detail how the industry in question is developing in a particular region and in the country as a whole. What are the prospects for the proposed project? Why was this industry chosen?
Also describe where your business is now. If it is already organized, then what form of organization - IP, LLC, OJSC, CJSC, KFH, etc. If not, when is it planned to open.
If the business is already operating, it is necessary to provide financial indicators of its activities for the last year. If the net income was high enough, this would generate additional interest from investors.
Description of goods or services
It is necessary to describe the properties of the goods or services offered within the framework of the project, as well as the geographical limits of the sales market. In addition, we must not forget about competitive advantages. It would be nice if you attach photos that clearly demonstrate certain products.
Answer the following questions:
- Are certificates and licenses required?
- Where will the products come from (self-release, resale, etc.):
- What will be the terms of sale?
- Is there a guarantee?
- How will customer service be provided?
Market analysis and marketing
In this section, it is necessary to characterize the target audience - its age, gender, location, financial condition, main problems. How will the products be sold - retail or wholesale? How are you going to find clients? How will the product or service be marketed?
In the same chapter, you need to consider competitors and show how your company will compare favorably with them.
Production plan
It is necessary to determine the production technology, the availability of the required raw materials, materials and equipment. This is necessary in order to calculate the cost of the product or service provided.
If the project is related to production, then its environmental assessment is given.
With the help of what labor resources will the project be implemented? It is necessary to indicate whether there is a staff or whether it will be formed anew. What positions are planned to be hired? What will be their main responsibilities? Will further retraining and retraining of employees be required?
Financial part
For investors and lenders, a financial plan is essential. It indicates all costs that will occur during the implementation of the project (fixed and variable). An income forecast is also made for a year or several years ahead.
Based on the estimated income and planned expenses, the main financial indicators are calculated:
- book profit,
- profit taxes,
- net profit,
It is best to arrange the financial part in the form of tables and graphs - this is much clearer and more understandable.
Performance analysis
To understand how effective a business project is, it is necessary to evaluate some parameters:
- payback period,
- breakeven point,
- margin of financial stability,
- various types of returns.
Based on these indicators, it is concluded whether it makes sense to invest in the implementation of the project.
More about such an analysis is written.
Risks and guarantees
In this final chapter, it is necessary to answer the question which risks are the most serious for the enterprise. What can cause them? How much can they affect profits?
It is advisable to foresee all possible risks, as well as write down the methods by which they will be reduced.
As can be seen from the brief description, all sections included in the business plan are interconnected and inseparable from each other.
It should be noted that investors, creditors, banks or government agencies may have their own requirements for the structure of a business plan. Therefore, before proceeding with its compilation, it is necessary to clarify these requirements.
If you need help in developing a business plan, then I am ready to offer my services. You can leave a request in the comments to this article or by writing to me by e-mail, which you will find on the "Contacts" page. I will be glad to help you!
