If you are entering the wilds of entrepreneurship for the first time and starting your own business, you will certainly need a business plan or, in other words, a company concept. The business plan describes and develops your idea as a project to be successfully implemented in your chosen field. This way you will have an overall view of the activity for a certain period of time. In addition, such a plan helps to build a good structure of the company and points to possible obstacles and their overcoming; indicates the presence of possible gaps. Through it, the entrepreneur can always check whether an initial idea is developing according to plan.
Here are some practical ideas on how to do this.
The plan should cover a period of 3 to 5 years and be up to 30-35 pages long. A business plan generally consists of two main parts. The first one is a written formulation of your idea about: what products you will offer, goods or services they will be, your potential customers and how you will reach them, what marketing concept you will follow. The second step is planning the financing to turn your idea into reality, ie. how much money you will invest, will it be your own income or part with foreign investments, anticipated income, expenses, profits, losses (financial part). In the first year, you must plan your finances on a monthly basis, and in the following years - you can also plan on an annual basis.
Now we will look at the main points of the business plan, relating to the two main parts.
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CONFIDENTIALITY AGREEMENT
This is necessary because, as already mentioned, your concept is likely to be read by different people. This agreement is a kind of protection against someone stealing your idea.
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SUMMARY
The executive summary is usually the first page of the business plan. It gives investors or lenders a better idea of what to expect. A summary is like the contents of a book. And very often potential investors and creditors read only it. And only when they see the potential of your ideas will they want to see the rest of the plan. The summary should above all be informative, logical and neutral in tone and present all the facts.
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BASIC DATA AND DESCRIPTION OF THE IDEA AND STRATEGY
Here you can indicate the name of the company, headquarters and address of management and tell about your experience in the specific field you have chosen. It is good to indicate your education and to what extent it corresponds to what you are doing. Because if you have graduated from a technical university, it is not a problem to offer medical technology. However, it will be different if you are offering the same but spent several years in a tourism college. That the education corresponds to the company's activities is not strictly mandatory, but it is desirable, at least to some extent. Describe your strategy - what you will offer to the market and why - a new product or an improvement of an existing one; or a new product in addition to an existing one. For example, there are many cleaning companies in your area, but none that move furniture; or there are cleaning companies, mostly with human resources, and you offer machine cleaning.
Every good strategy has a focus. It could be the friendly service, the low prices or the variety of products. For example, one airline may emphasize the speed of direct flights, while another may invest in offering more in-flight food and more space. To take the path of success, the company must have a clear motto. One that suggests to customers and users the end goal. If focus is lacking, costs are often high and the overall business model is difficult to implement. So this company is like all the others on the market and has no reason to stand out. It is a grave mistake for any company if it only tries to catch up with the competition. So it just loses its uniqueness.
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DESCRIPTION OF THE TARGET MARKET
It is essential that you have decided who your target market is: whether you will run a B2B or B2C business. Or you will serve governmental or non-governmental organizations. Once you've determined the basic parameters of your target market, it's time to decide which market segments to target. There is no way your company can compete on all fronts at the same time. You must prove that you have a viable market and that you can successfully compete in the market. In this part of the business plan, potential investors will learn information about your competition and how you plan to compete with them. Market research should be both qualitative and quantitative. When you segment your target market, it means analyzing demand and defining individual user groups according to pre-selected criteria. The segmentation of the market, or more simply its division into pieces, we will consider in more detail in chapter six.
Basically, the market is segmented according to several basic criteria, according to the users. The market can be differentiated according to the geographical location of the company, the desires and the purchasing power of the consumers. For example, in a small town with a mostly aging population, it is not appropriate to open a disco... or a store for teen clothes and accessories. Usually, the company cannot tailor its product to the individual customer, so it groups customers into groups according to their common requirements. For example: you start with an auto dealership; Passenger car buyers can be divided into those looking for a simple means of transportation, those looking for high class and extras, or those looking for security. Here, the target market is the drivers, and the segments can be one of the listed or all of them, it depends on the scale of the company and what kind of clientele you are targeting. In this section, you can list the main advantages of your product compared to the competition, not forgetting to mention your weaknesses as well (the latter will certainly instill more confidence in the reader of the business plan).
After you have examined the elements of the market in detail, it is time to describe the so-called SWOT analysis in your business plan. This is a classic way of analyzing and planning the activity of a company. SWOT analysis follows the four elements of a matrix: strengths, weaknesses, opportunities, threats. This method was created by Albert Humphrey of the Stanford Research Institute. Humphrey, along with a team of colleagues, researched firms in the mid-20th century. This research was funded by Fortune 500 companies, and these companies also provided the necessary data for this because they needed a tool to help them see and fix their errors and omissions faster. How is it done You can learn SWOT analysis here.
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DESCRIPTION OF THE MANAGEMENT STRUCTURE
The personnel in a company is constantly changing. But to begin with, you need to have an idea of who will lead the company (probably you as the owner and/or the partner, if there is one), whether you will act alone or have workers/employees. If you have partners, you must specify who starts with what share.
You must have an accountant if you are a company. Here you have two options: hire one on a permanent contract, which means providing a monthly salary and insurance, or hire an accounting firm to which you will pay a fee. You will judge this according to your needs and finances. Even if you have no employees, you should consider whether you will need a secretary/personal assistant to take care of some of the administrative work. However, if you are an artist or a writer or practice another free profession (look for a list of free professions on the NRA website), you may not open a company, but be self-sufficient. In this case, you will still have BULSTAT, which will match your EGN. And of course you will again need accounting services or at least advice on what declarations are submitted to the National Revenue Agency. Always consult a specialist.
But if you do not intend to be a sole proprietor or a craftsman, it is good to have an experienced team for the success of your venture. This practically means that if you are going to hire a secretary or an assistant, he/she must have the necessary education and skills, and their computer literacy should not be reduced to just posting pictures on social networks. If you carry out a more specific activity, it is good to find an accountant who has worked in the field and is familiar with the legal framework. In this part of the plan, you will describe in detail what departments and positions will exist in your company and what the main job descriptions are. For example, what level of language should a supply manager speak - basic or advanced. In terms of personnel, this is the place to find out if you already have qualified personnel or are still looking for them. Describe the number of staff and the tasks of each. It is possible to envisage one or several departments if you are starting a larger company. Note that the same person could hold positions in different units. For example, person A may be both secretary and supply manager, or be responsible for both supply and placement. Describe in detail who will have what responsibilities in your company.
No matter how big your company is, laying out the basic skeleton is very important. If you have a bakery, for example, there are basically several options for staff: you - a manager and a supplier, a shop assistant - one or two, a salesperson. Depending on your qualifications and skills, you can be the manager and the detailer, or you can sell and others are in charge of deliveries. And an accountant was agreed - a person hired on a permanent contract or an accounting firm to serve you periodically. This is the place to indicate the working hours: of the site, of the employees, as it may be different.
© 2023 Iliana Dechkova