Sometimes called a business plan or development plan, the Business Plan is a document that formalizes in writing and focuses the situation and development projections of your company.
The term Business Plan is sometimes used in a reductive way to designate only the Financial Plan whereas it covers and should cover several other components that we will see here.
There have been, are and will be many articles on the subject. The purpose of this article is not to be exhaustive but to remind what is the purpose of a Business Planet. I will also give you some personal recommendations!
A. What a business plan is and what it is used for
In summary, your Business Plan describes your project and your prospects, lists the information and your assumptions, argues your choices and summarizes these data in tables.
It is a tool that allows your contacts to understand your project and gives them confidence in its viability:
- investors such as bankers and financiers, jury or future shareholders
- your partners, your possible associates
- your team and future team
It is also a key support for you, the contractor, as it contains/should contain:
- The structuring of your project
- The reference point for your initial choices and their justification
- The reference point of the projected evolution
- The activity/project strategy guide
B. The 11 parts of your business plan
- Executive summary
- A global view of your project
- The business, the sector in which it is inserted
- The main aspects of the project and your strategy
- Key success factors
- Vision and missions
- What is it about?
- Which strategic directions? Vision at 5 and 10 years
- Reasons for your choice
- What values do you defend?
- What are reasonable and ambitious goals?
- The project leader / team
- Anything that helps to demonstrate that alone or as part of a team, you can lead the project to success
- Products and services
- Your products/services in relation to customer needs
- What differentiates these products/services from the existing ones
- The added value of this difference for your customers
- The market, the targets
- The economic and commercial environment
- The actors
- End users
- The size of the market
- The trends
- The development of the sector
- Size of your segment in the overall market
- Key drivers of your segment and the global market
- Periodicity of the request
- Barriers to entry
- The competition
- Competition: how does the market work? What are your differences?
- What are your assets and risks?
- What are their assets, strengths and weaknesses and your responses?
- Structure of the competition, main figures and staff, their leaders
- Catchment area
- Strategic marketing
- Strategic marketing deduced from the market study: your concrete choices and actions to best meet the needs of your target
- Market positioning: your product offer, criteria that will influence the purchase decision
- Pricing policy: Prices and price range, Promotions, Discounts and rebates, Warranty extensions
- Distribution: Direct or On line, Distribution channel: retail, B2B, B2C…, Sales team, Training/motivation
- Advertising and Public Relations: Strategy, Media Selection, Budget, Impact Measurement
- Suppliers and partners
- Suppliers :
- Who are they?
- What recognition on the market?
- What product/service offering?
- How will you work with them?
- What are the conditions of purchase, price and payment?
- Partners (partnership contracts / reciprocal commitments)
- Who are they?
- What is their involvement?
- What are their strengths?
- What would be the risks of working with them?
- What do they bring to your project?
- Management and structure
- Your organization to ensure the process of prospecting to order to production to sale and to face the various hazards
- Which organization chart, which distribution of responsibilities?
- What developments (qualitative, quantitative)?
- Skills and experience present, needed to be added?
- Management methods: objectives, incentives, participation in decisions…
- Financing plan: the essential shift from qualitative to quantitative
I quote Anders Wester, Vice President of Tetra Pack Group 2
“Simply put, you can’t manage what you can’t measure. Measurement is the antidote to ambiguity. It forces you to be clear on concepts that would otherwise remain vague and it forces you to act.
The financing plan is a quantified summary of your analyses. It concretely identifies the needs of the project and the explanations of its financing.
It shall contain:
- Profit and loss forecast
- Balance sheet forecast
- Cash flow plan
- Estimate the initial financing needs and the different sources of financing (loans, subsidies, shareholders, investors …) to cover the needs
- To be done over 3 years with the1st year detailed month by month
- Calculate profitability from the difference between sales and operating costs
- Evaluate your room for manoeuvre
- The cash flow plan is a function of the operating cycle and the terms of payment of customers and suppliers
It is the “helicopter” vision that leads to success. You can present it in a synthetic way on a time scale with the steps you consider important.
C. How to write your business plan ?
An effective way is to review the following questions: Q Q O Q C P C
i.e. Who, What, Where, When, How much, Why and How
And the golden rule for writing it is “keep it simple!”
- Ensure easy understanding by others than yourself
- Highlight the value of your project by focusing on the essentials
- Use short sentences because concise explanations have more impact
- Structure your document so that people can follow the logical coherence of your arguments
- Make sure your text is well spaced out and illustrated with photos, diagrams
- Be factual in your arguments
- Know the reality of each number and only enter the ones you believe in, that you can justify
- Clearly state each of your assumptions
- Review each section carefully and make sure you haven’t used any jargon
- Have you identified the main levers, the major risks?
And three crucial questions to ask yourself:
- Does the PO contain everything that helps to demonstrate that I can successfully carry out this project alone or as part of a team?
- Am I convinced by my BP and my Financial Plan? If you are not convinced yourself, bankers and financiers will probably not be more convinced than you are
- Do I know what I have to do in the next few weeks?
It’s up to you!
Marie-Françoise Terlier, BML Mentor