A business plan is a document that describes the main aspects of entrepreneurship, analyzes the main problems that an entrepreneur may face, and explains the solutions to those problems. Usually, it consists of such sections as the resume, the description of the product, market analysis, competitor analysis, marketing strategy, production plan, and financial plan. A resume is a summary of the organization’s plan that is mostly written for potential investors. The product description explains how the product covers the customers’ needs, which benefit it brings to the buyer, and what are the good’s peculiar characteristics. The next two sections examine the market and competitors by conducting various analyses and defining the core ideas of competing companies. The marketing strategy depicts the good’s positioning, advertisement methods, and marketing tools that will be utilized during the product introduction. The production plan includes a description of the manufacturing process. The last section, where the financial plan is depicted, is one of the most important parts of the business plan as it depicts the company’s costs, expected profit, and other essential variables.
For the creation of a strong financial plan, accurate financial data needs to be implemented. It is essential for the provision of a well-planned production process as companies choose the volume of production, rent or buy production tools, and employ a certain number of workers according to the financial plan. Almost all processes’ effectiveness and profitability are estimated by utilizing this plan. Therefore, the majority of potential investors are at first interested in the financial stability of the project. To attract sponsors and creditors, the business plan needs to stand out of the line of average suggestions, which can be provided by adding some other elements.
A forecast for the next 3-5 years that depicts the company’s potential financial results, balance, and predicted profit needs to be present. Investors pay attention to numbers. Therefore, the business plan should present evidence of strong demand for the product, and the potential benefit for the investor has to be estimated (Shpak, 2020). The current achievements on the project may be depicted as sponsors preferring to work with highly motivated, progressive, and trustworthy companies.
Reference
Shpak, N., Naychuk-Khrushch, M., Kohut, U., Honchar, M., & Sroka, W. (2020). The usage off modern instruments of business planning administration for small enterprises: a case study analysis.Central European Business Review, 9(1), 20-42.