A well-thought-out business idea that is formalised as a business plan will help you achieve success and is important for investors and other business partners.
Summary of the business project
The summary, which is one to two pages long, is written after the business plan is completed. The summary must provide a quick overview of the entire business plan and answer the following important questions:
- what has been done to date
- why was this business idea chosen and does the management or key employees have previous experience in the chosen field of activity (work experience, education, training);
- do you plan to devote yourself to the company full-time;
- what is the product/service and who will it be sold to (markets, customers);
- who are the main competitors and what is your competitive advantage;
- what is the budget for starting up the new company or project, and what are sources of financing.
More details should be provided on the nature of the connections and work functions – describe how these will help to make the company financially successful. The sellers of the fixed assets should also be included, as well as the total cost of the project, and how the expenditures will be covered.
General information about the company
Include the general information about the company: name, address of the place of business, registration address, registration date, Commercial Register code, phone numbers, e-mail and website addresses, size of the share capital, shareholders and their share of the capital, members of the management board, contact person, and his or her phone number and e-mail address.
Business idea, vision, mission and objectives
This should explain the following: what business you are in; in which target group do you expect to find your customers; which needs of this target group do you plan to satisfy; how you will satisfy these needs; and how do you differ from your competitors.
What is your ultimate goal? The vision is a description that is as realistic as possible about the future you would like see for your enterprise. The vision is determined with a perspective of at least five years. The vision reflects certain ideals and does not include any numbers.
How will you accomplish your vision? The business mission – the main principle of the company’s existence – describes the needs that will be satisfied by the company in the long term, how this will be achieved and for whom.
This is a formulation of the company’s short- and long-term objectives, and how they will be achieved. It is important that the short-term and mid-term objectives be based on the long-term ones and that they support their achievements. Longer term goals are formulated more generally. The closer the objective, the more concrete the description should be.
- short-term goals (up to one year);
- mid-term goals (1–5 years);
- long-term goals (over 5 years).
Team and management
- Describe the competency of the management: work experience, education, and personal data. Work experience should include references to entrepreneurial and management experience, and work experience in similar business fields. Education should be included, as well as information on any courses or training related to the given field of activity and entrepreneurship.
- Include the obligations and responsibilities of the management.
- Describe the structure of the company.
- Describe the wage system and calculation of possible performance pay.
- Describe the company’s labour needs, existing workers and their qualifications.
- Analyse the company’s labour needs during the next few years – how many people are required, and what should their qualifications be.
Describe the wage system and the calculation of possible performance pay.
Products and services
- Detailed description of the product/service and its potential target group. The product/service prices are included, along with the pricing principles. The product/service prices are compared to the competitors’ product/service prices.
- Position of the product in the added value chain, i.e. whether it is a raw material, component or finished product.
- Is the product/service already available on the market or it is a new product/service.
- Any supplementary products/services provided with the main product/service (transport, consultations, maintenance, repairs, and/or spare parts).
Describe how the product/service range will be changed/developed in the future; how the products/services are developed, and where the ideas are found for developing the product/service.
Describe the advantages of the product/service compared to competing products/services.
- Describe the premises, buildings, and lands that the company will use for its activities, and indicate their owner(s).
- Indicate the size the premises, and their conformity to the requirements for production/provision of services. If the premises required renovation, include the renovation costs.
- If the company is renting the premises for its activities, provide a summary of the lease contract. Include the following: the landlord, term of the lease contract, address of the rented premises, size of the premises, and general costs related to the premises (rent, electricity, heating, security, etc).
- Describe the advantages of the location (geographical location, service area).
Provision of services/production process
- Describe the main processes of the company: what the company must do to produce the product or provide the service.
- Describe the production process in detail: what raw materials are needed, where the production will occur.
- Describe the technical needs: what production or office equipment is needed, and what vehicles.
- Describe any possible restriction on the production/provision of services (e.g. licences, operating permits).
- Describe the market in detail.
- Assess how the market has changed in the last few years and what changes can be expected in the future.
- Describe the demand for similar products/services in the market: how large is the total volume of demand; what should the company’s market share be.
- Assess the demand seasonally. If the demand is seasonal, how do you plan to “survive” the off-season?
- Describe the prevailing price level in the market, or what prices do similar products/services command on the market.
Describe the company’s existing and potential customers, to whom you plan to sell your product/service. The following information should be included for the business clients: location, size (turnover, profit), number of workers, provided services, and other relevant information. The following information should be included for private customers: gender, age, education, residence, jobs, income, etc.
If the customers are from different target groups (e.g. 30% companies and 70% private individuals), specifications for both groups should be compiled. Based on the above, compile a sales forecast – what volume of product/service do you plan to sell to your customers and at what price.
Describe the company’s main competition.
- Include the general information on the competitors: names, time in operation; place of business/service provision; website address; the number of employees; distribution channels; and sales methods. If possible, provide an overview of the competitors’ turnover, profits and other financial indicators.
- Thereafter, describe the product or service of the direct competitor, by including the following information: product/service, its quality, warranty conditions, price, payment terms, delivery times, target group, market share, market niche and reputation. Highlight the competitor’s strengths and weaknesses.
- Describe the similarities and differences between the new company and the competitor.
The marketing plan is the programme for conducting the marketing activities (time schedule, people in charge, deadlines, budget and expected results). In addition to the activities described below, which require financial resources, also think about the advertising channels that are available for free (e.g. effective website, output from google.ee searches, social media, etc.).
You should plan the following activities.
- Advertising. Where to advertise? Explain why you would advertise in these channels (newspaper, magazine, radio, online, etc.). How often will you advertise? How much will the advertising cost? How will the results be controlled?
- Sales promotion activities. This includes campaigns, discounted prices, direct sales, client events, articles, etc. Sales support is also provided by all kinds of promotional items that are related to the product or service. Which promotional methods will you use and why? Where will you order them from and why? To whom will you distribute them, how and why?
- Participating in fairs. Which fairs will you participate? Where and when will they take place? What do you wish to achieve by participating? What is the budget?
SWOT analysis a very well-know and popular analysis model, which is used to map an organisation’s strength (S), weaknesses (W), opportunities (O) and threats (T).
- Assess and describe the volume and sources for the financing necessary to start up the company/project.
- Reasons for the investment(s): what you plan to procure, for what reason, from where and at what price.
- Assess the risks of finding and used the financing sources.
A financial forecast is comprised of a cash flow statement, income statement and balance sheet for at least the last three financial years (the most recent year by months and the next two years by financial year).
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