Properly preparing a business plan has three important tasks. First, it means managers share common goals. Second, when thoughts put down on paper, it is possible to look closely and reflect on the feasibility of the project. “The business plan – a kind of rehearsal, a chance to realize the potential problems, not losing money,” – said Mike McKeever, author of “How to write a business plan.” Finally, the business plan needs to attract professional investors who only have time to skim their proposed projects.

Creating a clear business plan requires thought, time and money. You can order it from a third party (in Ukraine firms specializing in business plans, ask for 1 000$). Most often, entrepreneurs are consultants to the document on pages 30-40, which does not disclose even the most basic questions: What does business and where does the profit.

Investors of such business plan is unlikely to please. “If after reading the first few lines the essence of the business plan remains unclear, it is a bad sign,” – says Jim Caspari, CEO of The Venture Alliance, which advises start-ups wishing to attract the attention of venture capital funds. It is not only a coherent concept. “You have a few sentences, explain what competitive advantages in their field has this project because I need to know exactly how you’re going to succeed. Most business plans do not do “- continues Caspari.
The effective business plan must be said, what is the value of the project, why people would want to pay for that product or service, how much money will it take to start, what are the opportunities for growth, what are the risks and how the entrepreneur plans to deal with them, who are competitors who are partners who the team members. Must include a detailed description and all sources of income and expenses. An important question: how much profit it will bring? And more importantly: when the company begins to generate revenue? Therefore, in the business plan needs a section containing the latest financial figures (if the company is active) or predictions.

For start-up companies with limited resources are critical statements of cash flows, which reflect the accounts receivable and payable for each quarter. “People misunderstand the movement of funds”, – says Tim Berry, president of Palo Alto Software, which develops software for business planning. “They think that if the company is profitable, then they will come money. But most companies are killed, while remaining profitable, because the profit – it’s not cash. ”

Grind your plan to perfection, do not send it gather dust on a long box. “The business plan – this is only the beginning of the process – Berry warns. – Plan activities that the company will still keep a ship at sea: you have to constantly adjust the exchange rate. The plan itself is of little value. It is important to go back to him and see where you were wrong, and what it cost you. ”

title page and contents

Start with the essential: the company name, address, telephone number and contact information of all the founders, as well as the contents of the document. The volume of the business plan should not exceed 30-40 pages with all the necessary applications.

Introduction

No more than two pages list all of the most important. First, tell us what is the value of the project: what will the your company, how much profit have and why people would want to pay for your product or service. If you send your plan to investors, report the capital, you’ll need and how you plan to use it. To highlight the essence, we must imagine the whole picture, so this part is better to start after the completion of the entire plan.

Market Opportunity

Market opportunities

Explain who you will sell your product or service and why this group of customers for you attractive. Need to answer several key questions. How big is the market? How fast it grows? What are the growth opportunities and potential threats? How will you deal with them?

Most of this information can be found through industry websites and the media, the official statistics, analyst reports and even other businesses. Be sure to include the source of information – in case you are asked to confirm your statements or to update your information.

Market Overview

Market Overview

Make no mistake, your business is not unique. Try to look sober view and assess the contenders. Who are they? What sells? Which part of the market is occupied? Why buyers choose your product or service and not them? What obstacles can arise when entering this market? Do not forget the indirect competitors that are still working on another segment, but have similar capabilities and can make you compete later.

Team

Team

Performance almost as important as the idea itself. Therefore, investors are interested in who you are as a team. Attach a summary of all the founders, partners and managers: what are their skills and achievements. If the firm a few shareholders, explain why you chose these partners (all resumes should be attached).

Business Model

Business Model

This section includes a detailed description of all sources of income (sale of products or services) and cost structure of the company (payroll, rent, operating costs). Make sure that you have mentioned and justified all the possible revenues and costs. Also include the names of the major suppliers and customers. In fact this section – the production plan for the future of the company.

Financial performance and forecasts

Financial performance and forecasts

If you operate a business, attach a statement of profit and loss account, balance sheet and statement of cash flows for the year. Then make a prediction for all three parameters for at least three years ahead. Also provide an analysis that shows how to quickly pay off the starting investment.

Risks

Risks

Do not wait for trouble to find out how to cope with it your business. Work through the possible scenarios: worst, best and average. Make sure you have enough money to survive any storm.

Sources of funds and their use

Sources of funds and their use

If you are trying to get money from investors, they will want to know how you plan to dispose of the capital. In this section, you must specify the projected cost of the launch: building, buying new equipment, design, logo, etc. Most entrepreneurs underestimate the cost of starting a new business. So spend a study in advance of treatment to the investors.

Applications

Applications

A good business plan only briefly describes the foundations of the enterprise, so in the end to make all the necessary documents. This may include summary information about the creditworthiness, market survey, scheme, plan promotion, copies of contracts, including leases, letters from prospective clients, the certificate of registration of patent and trademark, the partnership agreement, certificate of registration of a company.