What does it mean to create a business plan?
Experts such as Sebastián Escorne define a business plan as “a methodology that systematizes and integrates the activities that will be necessary for a business idea to become a company and present profitability expectations.” It is a roadmap that allows us to visualize our objectives, opportunities, obstacles and challenges in any scenario.
So creating a business plan is nothing more than a process of analysis and planning that will allow you to determine the viability of your projects and highlight in writing its most basic principles. Without it, how will you know which direction to follow? Below, we show you how to make one for your company or organization:
1. Create an executive summary
The executive summary is the first section you should cover. As its name suggests, this section summarizes the fundamental features of your company so that potential investors have an initial understanding of what you are proposing.
The main purpose of this introduction is to provide an overview of your business and summarize your business plan in one or two pages. In it you should highlight:
A brief presentation of your business idea and your team members.
A description of the main idea of your business, and what product or service you will market.
Your company's mission, vision and objectives.
The description of your target audience.
Key factors that set your brand apart from the competition.
The budget you need to make that idea a reality.
The executive summary should not be a heavy read, but rather a short, precise, and easy-to-understand text. Think of your executive summary as a 90-second elevator pitch in which you present your business idea to a potential investor as quickly as possible.
2. Describe the product and your business model
How to create a business plan for 2020 without specifying what your business idea actually consists of? Investors are interested in knowing how the materials that make up the product will be obtained, as well as how to produce it. The more detailed and transparent you are, the more trust you will generate among your potential business partners.
For this reason, it is important to highlight the description of the production process of that product or service (How will it be manufactured? Will it be sold online, in a physical store or both? With what materials?) and the purchasing processes: the raw materials to be used, the suppliers that are in mind for this, the distribution channels and the economic relationship that is intended to be established with these commercial allies so that the business works correctly and is profitable for both parties.
When describing your products and/or services, it is also important to describe their characteristics and qualities, such as:
Its physical properties (packaging, type of wrapping, measurements, materials)
What value does your product/service bring to the market? What qualities differentiate it from the competition's products? Its importance in the market (attributes, benefits, advantages and differentiating qualities)
Reasons why the customer will buy your product and not the competition (the needs it satisfies and the problems it solves) Identify the problem that your product solves and why customers should prefer you and not your competition
3. Study the market and the competition
To create a business plan for 2020, you must study the market or business environment in which your company will operate. The market study guides you on its behavior and allows you to better understand how you will approach it in the new period that is approaching.
Your 2020 business plan should include a new industry analysis that will allow you to familiarize yourself with the environment again. The Entrepeneur portal states that the market study can incorporate SWOT analysis and an environmental analysis (PESTEL) to better determine what opportunities the market offers and the threats that may come from the competition. Some essential components that such an analysis should include are:
Market development in previous years and an overview of future development.
Economic, technological, political and legal aspects that affect market dynamics.
Past and current trends.
Difficulties that it presents.
When analyzing your market, you cannot forget about your competition. Although you probably already know who your company competes with, creating a business plan requires you to express this understanding of the market with greater specificity. In this sense, some of the questions you should consider when studying your competitors are:
What products do you offer?
What are your clients like?
At what price do you offer your products or services?
What do you think are your expectations for 2020?
What advantages do they have for your business?
4. Identify your target audience
Has your target audience changed in 2019? What characteristics of your target audience will remain the same for the coming year? Creating a business plan for 2020 requires redefining the profile of the potential buyer, the individual your company is targeting.
People change over time, and you need to know what changes your clientele has experienced to ensure that your service remains attractive to them. Customer analysis should include the aspects that best define that ideal buyer who will spend their money to consume your product or service. Traits of this style can be:
Profile (age, sex, profession)
Geographic location.
Hobbies, preferences.
Needs and interests.
Expectations.
Purchasing habits.
Based on these and other features, you can design marketing and sales strategies that are attractive to your target audience and that respond to what they are looking for in the market. As Entrepeneur states, the consumer profile makes it easier to define which marketing options are better and more relevant than others.
5. Structure your business's key operations
Explaining how to make a business plan step by step would be an incomplete task without poland number for whatsapp mentioning the importance of specifying the characteristics of your work team and all the operational logistics that your business requires.
This is one of the most technical sections, but also one that offers the most details regarding who makes the product and how they do it, as well as the organizational aspects of your company.
Identify who is on your payroll, the functions of each, the salary and the salary regime (weekly, biweekly, monthly, etc.). Also, mention the operating expenses that your business will assume during 2020.
Operating expenses refer to the means of distribution and marketing of the service, as well as the location of the spaces that the different departments of your company will occupy. Some points that you should pay attention to in this regard are:
Team: Who is on your team (payroll)? What will their salaries and job duties be? The hours of work your employees will undertake per day.
Operation and logistics: What are the operational expenses that your company will have to consider on a monthly basis? Such as: office rental, equipment, electricity, condominium, etc. How will the product or service provided be distributed?
The operations plan is one of the pillars of the business plan because it groups together all aspects related to the value chain of your products and services (human resources and capital).
It also shows a description of what the work organization of your company will be and how the functions and responsibilities of each member will be distributed to fulfill each of the links in the value chain.
6. Marketing and sales strategies
In this section you will define the marketing and sales strategy for your products. Specifically, you must specify how your company will market and sell the products and/or services it offers. Here it will be important to define:
Pricing, discounts and guarantees policy
The channel through which the product and/or service will be distributed (retail sales, wholesale, online, etc.)
Finally, it is also essential to include sales objectives and the timeframes in which they are to be met, the activities that will be carried out to achieve them, and the resources.
The marketing plan:
Here the marketing strategy and launch plan will be defined. Whether advertising and promotion of the product will be carried out through digital or conventional communication channels.
It is important to include a marketing budget that sets out exactly how much it will cost to carry out each of these strategies and a calendar of actions throughout the year.
We invite you to read: Marketing plan: What is it about and what is its importance for companies?
7. Financial plan and projections
The financial plan includes the economic, accounting and financial analysis of your business. This section presents the numbers and cash flows (ideally positive) that you estimate your company will achieve in 3 and 5 years. It is a projection of your sales, of what you expect to invest and obtain as profits in the short and long term.
Specifically, the data you need is:
Cash flow.