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The Business Plan: what is it, benefits, characteristics, formulation, and structure

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The business plan is a crucial step for any project leader. Indeed, it makes it possible to translate a business vision and make it understandable for all. Entrepreneurs, do not neglect its writing.

1) What is a business plan?
A business plan is a carefully written key document for planning, financing, evaluating, and managing business activity. It is an indispensable foundation for a successful and profitable business.

A business plan presents the business model of your company while describing your objectives, your organization, and your financial forecasts for the next 3 years. Before embarking on writing your business plan, it is therefore ideal to have a clear idea of ​​the economic model of your business, to know how your creation will prosper.

2) Why make a business plan?
Many establishment pioneers create a business plan because the bank, investors, or employment agency asks for it. This is one of the reasons why you can make a business plan. But it would be advisable to do it for yourself.
Just as the business plan is a fundamental document for outsiders, it is also a contribution to the entrepreneur. Here are three basic functions of a good business plan:

a) Review structures of all relevant areas: For the success of a business idea, it is essential to resolve what will become relevant to the business, such as; Who is part of the target group? How do you reach the target audience? What influences purchasing decisions? Who are the main competitors? What location is ideal for the company? This information can be obtained from what is examined when making the business plan.

b) Calculate profitability: It is important that when creating the business plan the business idea is critically examined to verify the practical possibility (is it a feasible idea?). And to calculate the profitability of the business idea. This reduces the economic risk of the project.

c) Indicator of strategic and operational measures: If the idea can be carried out and has economic reach, in that case, it depends on the start-up. This is where the business plan helps as an essential guiding tool. Finally, specific marketing activities are decided, important sales decisions are made, and while the business plan is being created, business development goals are set.

3) Elementary reasons for making a business plan
Having a well-projected business plan helps to examine the critical areas of the business idea. It makes it feasible to avoid premature completion of the business by planning for possible errors. It is essential to bear in mind that this is one of the main reasons for failure in the first years. These are some of the reasons why it is elementary to have a business plan:
i) To provide a lower risk of failure.
ii) To provide orientation and structure.
iii) To discover the right market.
iv) To ascertain a detailed analysis of the competitors.
v) To determine the demand for capital.
vi) It promotes the evaluation and control of success.

4) How to create a business plan
Content topics like the business idea, market, marketing, and financial plan are the essence of the business plan. But apart from the content, a business plan must also meet the formal requirements to fully convince the readers. A business plan with a clear, compelling, individual structure and easy language also has a shock in the reader’s judgment.
An attractive structure helps the reader to better delve into the business plan, so it is essential to pay attention to the following tips:

a) Make a cover.
b) Index the content and number the pages.
c) Present an executive summary before going into detail.
d) Have a fixed structure with a clear heading hierarchy.
e) Make use of paragraphs and subheadings.
f) Create graphs and tables, especially in the market section (market analysis).

5) Content and understandability of the business plan
It is necessary to make sure that the business plan has simple and understandable writing since most likely some of the readers are not familiar with technical terms. Hence, it’s crucial to watch out for these clues, before setting up a business plan:

i) Insert references with dates.
ii) Make sure that the language is understandable. Make use of short sentences and, if the use of technical terms, these should be explained.
iii) Have present executive summary that goes to the end.
iv) Finally, read the document from beginning to end to verify that there are no contradictions in the text.

6) Instruments to prepare a Business Plan
It is essential to carry out careful and structured programming in the following principles:
a) Financial plan
b)Price calculation and product positioning
c) Marketing budget
d) Location description
e) Service and offer concept
f) Exposure of the competitive situation
g) Advertising strategy
h) Calculation of gross yield

7) Important sections for a successful business plan
The most relevant sections of the business plan include:
i) Market and Competitor Analysis: After having described the idea and target group in detail, conduct a thorough market analysis. This should also be associated with market research.
ii) Corporate objectives and strategies: knowing the market and competitors will help to develop objectives and strategies for the company in the business plan. Here, consistency is essential to achieve the objectives that are set.
iii) Marketing mix: This aspect elaborates on the ways to reach customers. Because of this, the marketing mix section is reserved in the business plan.
iv) Startup and management team: Many investors are often heard saying that they do not invest in ideas but teams.
v) Finance: The core of the business plan is the financial plan, as it determines the condition of the capital and shows how you want to cover it in the business plan.

CONCLUSION

i) A business plan is a carefully written key document for planning, financing, evaluating, and managing business activity. It is an indispensable foundation for a successful and profitable business.
ii) A business plan with a clear, compelling, individual structure and easy language also has a shock in the reader’s judgment.
iii) Developing a business plan benefits the entrepreneur a lot since it allows him to see beyond and thus avoid possible failures.

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