How to make a business plan

BUSINESS CONCEPT

Business idea, or business concept. A business concept is basically how you describe your dream café to your surroundings. "There will be a table with a record player and records to borrow, paintings by local artists will hang on the walls, and coffee will be paid for with a smile." It's basically a concept that can be used later for your commercial purposes. However, it hardly sums up everything you need for your business and it certainly won't guarantee that your business will be profitable. For that you need a good business plan.

A BUSINESS PLAN

A business model, or business plan, as opposed to a business concept, clearly defines how and what you will make money with. It tells you whether your project is viable and highlights possible pitfalls in the future - even before the business has started.

A well-designed business plan can help you in a variety of situations. However, it will be particularly useful if you as a company are applying for funding from a bank or investor or looking for a partner.

Your business plan can also serve as a good motivational tool for your employees. With its help, you will be able to more easily communicate your plans and vision for your business to your employees.

How to draw up a business plan

If you know your vision and goals, you're halfway there. Your business plan should always be in writing, even if you are only going to use it for your personal purposes. This is because when you draw it up, you will be aware of the steps that lie ahead and how much it will cost you to implement your plans. When drawing up your plan, it is also important to think about the potential risks you may face. You should already know at this point how you will deal with the potential risks.

Your business plan should always answer the following questions:

• Who am I selling to? Who am I creating value for? Who are the most important customers?
• What am I selling? What is my value proposition/offer? What needs am I meeting?
• How much am I selling for? What is my pricing and revenue stream? What do customers pay for?
• How do I sell?
  • What are my distribution channels and sales channels?
  • How do I work with my business partners?
  • Who are my key suppliers?
• What is the margin? Is it too big or too small?
• What is the revenue stream? How is it spread over time?
• What is provided for free and what is charged for?
• What do I need to sell (infrastructure, delivery, suppliers)?
• Revenue and cost plan.
• What all can be delivered to the customer?
• Are we addressing an urgent need or offering surplus goods?
• What is the cost structure? What are the most important costs? What key resources and activities are the most expensive?

Make sure your business plan is clear, logical, concise, truthful and realistic, and respects any risks.

Remember that a business plan is a "living document" that will help you to continuously check how you are achieving your vision and plans. Update your business plan at least once a year.

ANALYSE YOUR INDUSTRY AND COMPETITORS

The first prerequisite for a good business plan is an accurate analysis of the current and future situation of your business. This analysis will help you assess your potential customer base and estimate the economic feasibility of your business plan. It will also help you find your place in the market. It is a prerequisite for a proper evaluation of your sales opportunities and financial needs. Various analyses such as Porter's Five Forces Analysis, SWOT or PEST analysis can help you.

In particular, you should focus on the following questions:

• Who are my main competitors?
• What is their strategy?
• What are their objectives?
• What are their strengths and weaknesses?

Porter's Five Forces Analysis

Porter's Five Forces Analysis is a way of analysing the industry you want to do business in and all its risks. This analysis basically allows you to predict the evolution of the competitive situation. To achieve this, it analyses five key influences that directly or indirectly affect a company's competitiveness:

• existing competitors
• potential competitors
• suppliers
• buyers
• substitutes

SWOT analysis

It is the most common analysis tool. It is a general analytical framework and procedure that locates and assesses the significance of factors in terms of strengths and weaknesses as well as opportunities and threats.

We recommend that you start by analyzing the opportunities and threats that come from the external environment of the company, both the macro environment (which includes political, legal, economic and technological factors) and the micro environment (i.e. your customers, suppliers, buyers, competitors and the public). Threats and opportunities are external influences that cannot be influenced by us alone, only by the subsequent behaviour of the company.

A thorough analysis of the external environment is followed by a strengths and weaknesses analysis, which covers your company's internal environment (objectives, corporate resources, corporate culture, interpersonal relationships, organisational structure). Strengths and weaknesses are essentially internal factors that we can partially control and subsequently influence ourselves.