A business plan is a document that describes in detail the goals of a business venture, strategies for achieving them, the market in which it will operate, financial projections, as well as the structure and resources needed to implement the plan. The business plan serves as a guide for running and developing the business, providing a clear vision of the direction in which the company should move. Regardless of size and industry, a business plan helps entrepreneurs to accurately analyze their market, identify potential obstacles, and define concrete steps toward achieving their business goals.
Components of a business plan
1. Company Profile
In the company profile, explain the unique value that the company offers in the market. Specify the business structure, for example, whether you are a trade, general partnership, limited partnership, or joint stock company. Describe the business model you use, including how you generate revenue. List the industry you operate in and the key products or services you offer.
Emphasize the mission and vision of the company, as well as the values that guide the business. Describe the background and history of the company, including key moments and achievements. Define the short- and long-term business goals you want to achieve. Introduce your team, including key people, and their roles to show who is behind the business and how they contribute to the company’s success.
2. Market research
Your market can determine the success or failure of your business. If you choose the right market with lots of customers who understand and need your product, you will have an advantage. If you pick the wrong market or the right market at the wrong time, you could be fighting for every sale. That’s why market research is a key part of your business plan.
The analysis should include an estimate of the size of the market for your products, an analysis of the position of your business, and an overview of the competitive environment. The goal is to base estimates on verifiable data. Sources for market data can be found on the websites of the National Statistical Office, industrial environments, or academic research. A SWOT analysis that looks at your strengths, weaknesses, opportunities, and threats or a competitive analysis can help you with the market research.
3. Sales & Marketing
Determine the best marketing strategy to reach your target audience. Describe the different channels and tactics you will use to find and engage customers, such as digital marketing, social media, advertising, and promotional campaigns. For example, if you are planning to invest in Instagram or TikTok, make sure they are the leading platforms for your audience.
Most marketing plans include information about the price of the product, the product itself and how it differs in the market, promotion, and where you will sell your products. Every marketing activity should be carefully planned and executed in order to achieve the objectives.
4. Operations
Identify the resources needed to start the business, such as suppliers, logistics, technology, and human resources. Describe all operational processes and procedures that will ensure efficient operations, including procurement of raw materials, production, labor, and product delivery. Also, describe the steps that take place after the sale. For example, it is important to provide superior customer support in order to retain customers and encourage their loyalty.
This section also demonstrates a solid understanding of supply chain and backup plans. It provides a basis for making other important decisions, such as setting product prices and planning to realize initial costs. Besides, this part highlights the importance of a planning approach in managing business and minimizing risks.
5. Financials
Regardless of your idea, effort, time, and money – business needs healthy finances. People prefer to work with businesses that they believe are sustainable. Therefore, focus on the long-term profitability and sustainability of the company. Plan to reinvest profits to ensure growth and stability.
In addition, it is necessary to set clear financial goals and strategies to achieve those goals. Potential risks and the way you will manage them should also be taken into account. The level of detail in your financial plan will depend on your audience and goals. Three main financial reviews are usually included: the income statement, the balance sheet, and the cash flow statement.
Templates
Business Model Canvas is a strategic tool for developing and documenting business models. It offers a visual representation of the elements such as value, infrastructure, customers, and finances. It helps businesses align activities by illustrating possible trade-offs. Nine “building blocks” were proposed in 2005. Since 2008, the authors have developed tools such as the Value Proposition Canvas and the Culture Map.
The Flourishing Business Canvas is a new visual tool for designing business models for the 21st century. It recognizes interdependencies with society, the environment, and the economy. The tool provides a common language and visual framework for collaboration with stakeholders. It enables sketching, prototyping, designing, improving, understanding, sharing, and measuring business models. It describes how the company defines and achieves goals over time. The models include factors from financial profitability to social and environmental benefits.
Professor Peter Forint is explaining the Flourishing Business Canvas during ABC Toronto 2023
A business plan is a key document for any company because it provides a clear vision and strategy for achieving goals. It is necessary to attract investors and secure financial resources. A well-crafted business plan leads the company toward long-term success and sustainability. And if you want to learn more about it, make sure to join us next year at ABC Toronto!
