Anyone who wants to open a company or is already an entrepreneur but wants to see better results cannot do without a business plan. It is a crucial step in structuring a company , helping to organize its functional and financial structure into a viable model.
In other words, it is a very important step towards success. Those who are starting a business can use it as a tool to assess the risk and benefit of an investment, as well as refine an idea to have a greater chance of thriving in the market. And those who already lead an organization can apply it as a tool to make adjustments in order to promote improvements in performance.
However, many entrepreneurs still feel lost when it comes to business plans. It can be difficult to know where to start and how to develop one that adequately addresses your needs, your value proposition, and the solutions you intend to offer to the market.
With this in mind, we have prepared this article specifically to help you with this task. Here you will learn what a business plan is, why it is so important, what the main types of business plans are and how to create your own, according to the individual needs of your company.
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What is a business plan?
From the segment of activity, geographic reach, operational requirements, resources and equipment needed to set up the structure and staff to the necessary investment, among other factors essential for creating the business.
In addition, it lists the organization’s objectives , both in terms of mission, vision and values, as well as in terms of finances. Another important aspect is that it not only outlines these goals, but also describes the steps needed to achieve them.
Why is it important to have it in your company?
The business plan is the foundation of a company, it guides the path to follow and indicates the viability of the project, allowing the risks and potential returns of the investment to be analyzed. In this context, the business plan is an important document for internal organization and for raising funds.
For example, when you want to attract investors to your organization, a business plan is a blueprint for your project that allows potential partners to understand what it’s all about and how valuable the investment is. It also helps companies with no previous business history demonstrate their value in a tangible way and set realistic expectations for future returns.
Internally, the business plan allows executives and managers to work assertively, aligned towards a common goal. This way, resources are better used and it is possible to obtain a greater return on the application of strategic actions.
It is worth remembering that, despite being of great value for the implementation of new ventures, even established organizations must create a business plan. Furthermore, it is important to keep in mind that the market is dynamic and constantly changing. Consumer behavior changes, competitors come and go, new solutions are launched, technologies become obsolete, threats and opportunities arise all the time…
Therefore, it is recommended that every company review its business plan periodically . You can check and update the goals, as well as the steps to achieve them, or even create an entirely new plan.
Types of business plan
In general, there are three different kinds of business plans. Take a look at them below!
Complete or traditional business plan
This is the most classic model, and also the most comprehensive . It covers in detail the company’s structure and objectives, as well as the specificities of the market in which it will operate. Thus, it can be around 40 pages long.
It is generally applied in highly complex businesses, such as in industry, franchises, organizations with multiple headquarters or multinationals.
Another situation that requires a more extensive plan like this is when a larger investment is needed. The wealth of information helps to increase investor confidence , improving the potential for raising funds.
Simplified or summarized business plan
This business plan can be the organization’s official document, or a condensed version of the traditional plan . When it is the company’s official plan, it usually applies to smaller businesses with less complex operations.
When it is a summarized version of a more complete plan, it serves to provide a sample to potential investors. This way, they can evaluate the potential of the business before dedicating themselves to analyzing a more extensive document.
Operational business plan
This business plan is for internal use only . Its purpose is to demonstrate to executives the company’s objectives and resources in order to align management efforts. It is also an excellent tool for onboarding new management team members.
Its size may vary depending on the complexity of the business.
How to do this planning in your company?
Now that you know more about this document, it’s time to create your own. The process is detailed, but if you follow a logical structure it becomes very simple.
See below how to put together your business plan!
- Executive summary: section that provides information about the structure of your company. It includes data such as partners, business segment, legal characterization, tax classification , share capital, source of resources, mission and values.
- Market analysis: this section is dedicated to the different factors that make up your market, such as consumer profile, technical feasibility, suppliers and competitor analysis.
- Operational planning: details your business model and everything the company needs to operate, based on the data collected in the market analysis. It includes physical space requirements, inventory of equipment and machinery, fixed and variable costs , necessary staff, projection of production capacity and operational processes.
- Marketing planning: to sell, you need to advertise. This step helps to outline promotional actions to make your business known to your target audience. It should include: detailed description of products and services, geographic scope of service, feasibility of promotional conditions, promotional calendar, budget available for actions.
- Financial planning:Â based on the other information, it is possible to make a financial assessment of your business. This section presents investment in equipment, real estate costs, personnel costs, fixed and variable business costs, working capital, input costs, estimates of marketing costs, revenue estimates, estimated payback period, and summary of the necessary investment.
With your business plan completed and your company open, the next step is to closely monitor the results and financial performance of your business. This will ensure that your return on investment comes within the expected timeframe and that your goals and actions can be adjusted as needs arise.
