Introduction
Business plan is the first step on the road to success. It is a written document describing the current situation of the company and paint the tasks that should be done for several coming years.Plan specifically includes the future opportunities for the company and describe organizational strategies, operational, marketing, and finance, which will enable the company to achieve its objectives.
Banks and financial institutions require business plan of companies that are looking for the necessary investment funding.
Such a plan does not help the entrepreneur to raise the required funding only, but also provides a comparison stations to monitor the progress achieved at the level of the company's objectives.
The Business plans also help to clarify the strategic thinking at an early stage and provide a map for the future of the company.
There is no general unified plan for all business plans, but the precise details are changed depending on the expected possibilities for each project, but whatever the structure of the plan, it includes the following components:
1-The plan summary.
2-Ownership and management structure.
3-Business characterization.
4-Products and services.
5-Operations
6-Study the market and competition.
7-Marketing strategy.
8-Assumptions (external factors) and risks.
9-Financial plan.
10-Supporting documentation.
Now I will explain the plan components in detail:
1-The plan summary.
This chapter should be very brief (3 pages maximum) includes the key elements identified in detail in the following sections, and helps the summary reader to understand the logic of the work and the organization that governs the new project, and refers to the key financial elements, including external funding required size.The summary aims also to attract the attention of the reader (investors, banks ...), and encourages him to complete the reading.
If the entrepreneur could not explain the idea of working clearly in two or three pages, it is difficult for an investor to follow the reading of this business plan to finish.
2-Ownership and management structure.
Business Plan identifies the company's shares distribution and organizational structure that comprise the other sections, and the responsibilities must be specified accurately, it is useful to use the charts in that, and you must insert a brief overview of key partners and directors as a supplement in the Business Plan.This chapter shows also owners and managers abilities to labor management profitably, especially in the case of emerging companies.
3-Business characterization.
This chapter shows the activity of the company and the sector in which it operates, and must include a brief overview of recent developments in the sector and how they impact on the activity of the company, it is very important to highlight all the new products that have entered or will enter into the market and assess the positive and negative effects.4-Products and services.
This chapter presents the products and / or services that are generated within the company, if there were large number of products, there must be a general characterization for them followed by a more detailed description of the main products.The reference to the percentage of annual sales size for the main products help illustrate their importance, if the purpose of the Business Plan is funding the company's development and introduction of new products, it must then provide more details about these products.
It is particularly important in this chapter illustrate the characteristics of the main products and value-added, or the benefits will be provided to customers because these elements will determine the profitability of the work as a whole.
5-Operations
This chapter describes the production and distribution processes and materials used in the manufacture of products and / or the provision of services of the company.The purpose of the Business Plan in most cases to help raise funds to finance the purchase of assets / property, so it should include a careful assessment of the costs of new assets, and the capital required and other work-related issues, Such as additional workers, the necessary training, raw materials, extra energy, maintenance ... etc.
6-Study the market and competition.
Market study determines the size, rate of growth and shares of markets which have great importance for the company. These markets must be evaluated and, if possible, in terms of size and value, and expected rates of growth during the period covered by business plan.The study must also characterize sectors targeted by company's products.
The study must select the main competitors to the company in the market, along with their shares and expected share of the company in this market, and that be linked to the previous quarter by pointing to the impact of product attributes on its market share.
This study shows also whether the market is large enough to accommodate the new project or products that the employer is planning to put forward, it is important to understand the mechanisms of the market and how to determine the project site.
7-Marketing strategy.
If the purpose of investing is the production of new goods and services, or create a new company, you must build an effective marketing strategy consistent with previous strategic options,These strategies must include the expectations and objectives of the sale and how to achieve them, and this chapter includes promotion and drainage channels and partnerships activities, and pricing strategies ... etc.
8-Assumptions (external factors) and risks.
The main goal of the business plan is to focus on the future of the company, and to achieve this, the business plan must be built on the basis of certain assumptions, and since it cannot be certain to achieve all the assumptions, there is a risk element in the plan and financial projections contained therein.This chapter shows the most important assumptions which the business plan is built on, potential risks and their impact on the project.
Of useful tools here, the analysis of the strengths/weakness model, opportunities and threats, which summarizes the information under four main headings strengths and weaknesses of the company, opportunities and threats facing the new project. That must lead to formulate policies aimed to achieving the available opportunities to the project and mitigate the impact of the risks that lie ahead.
9-Financial plan.
Financial plan include the financial statements of the prior three years at least, as, the budget and profit / loss account and expectations associated with the financial statements for the three years (and sometimes the following five years), and these expectations are built on the current situation of the company as well as the assumptions for the coming years.Financial expectations include financial projections also budget and profit / loss accounts and cash flows for each year of the plan.
It should highlight the major investments in fixed assets in addition to the needs of share capital in the budget, as well as the sources and the size of the funds needed to finance the purchase of these assets.
This chapter should also include financial analysis of income elements, expenses, assets and main liabilities.
Presence of a limited number of main performance rates is necessary as well as the goals that will compare with it.
To evaluate the potential impact of the change in these factors, it is advisable to follow the sensitivity analysis, which calculates the extent of change in the financial projections that would result from a change in external factors, this analysis gives some reassurance to the financial institution as long as it facilitates risk assessment.
10-Supporting documents.
Supporting documents helps give confidence in some future assumptions, and may include: a feasibility study, marketing research, budget quotas for the purchase of fixed assets, contracts with suppliers and customers, written recommendation, letters of intent, agreements with unions, a copy of the ownership / rental property bonds and any other legal documents, tax permits for the previous three years, and anything linked to the business plan.Preferably instead of inserting all these voluminous documents in the main body of the business plan, place them either as supplements or in a separate file.
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