SMALL BUSINESS PLAN TUTORIAL
Business

Small Business Plan Tutorial

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Often aspiring entrepreneurs are faced with quite a challenge – how to write a business plan. This task is not easy, because to study each item, you must have some knowledge and understanding of the activities in which you are going to start a business. If not, you’ll, first you have to get acquainted with the information, a variety of techniques, and then move on to the practice.

SMALL BUSINESS PLAN TUTORIAL

How to write a business plan by yourself.

The ultimate goal

It is very important, in the early development of the project, before company registry, to understand what your purpose is. For the successful implementation you must take into account the value of tangible three factors:

  • Awareness of the initial position;
  • Determination of the ultimate goal, achievement of which will be the most important outcome;
  • Drawing a clear sequence of how from the point “A” come to a point “B”, as well as an understanding of its mechanism.

We determine for whom we make a business plan

1) From the selection of the final “reader” will depend on the detail of exposition and the evidence base.

If you write this plan for investors pay attention to the consistency of the evidence base of developed project, as well as the belief in the effectiveness of the use of the resources provided. This information will be urgent for those who give money in the debt, and for those who give them free (subsidies, grants).

It is very important to make all of your actions logical and consistent. Some of the information may be presented slightly embellished for financial support.

The main parameters of the project are such qualities as purity, accuracy and consistency. All the facts have to keep the specifics and explanations. More in this case, are also welcome.

Presentable will depend on the presentation to potential investors; you will need to use slides,  and so on.

2) If you make this plan for yourself. Such a plan is drawn up for action, which will be used to implement in order to achieve maximum efficiency.

In this case, it is important to reflect information about the required and available resources. A business plan should be as close to what it actually is.

It is understood that this is totally two different cases that require individual approach. You can`t make the same business plan for yourself and for potential investors. And of course, it is worth noting that the project for those, who are able to provide the financial resources, will be more complete and detailed.

Preliminary analysis

Work on any project begins with an analysis of the situation. To systematize all available information, descriptions, and filling of all the sections, you need to study the data, analyze them together. If the original information is not enough, you need to get it, by calling the experts or further study of all aspects of the situation.

Make up a title page, summaries, set goals business project

Making every project starts with writing the title page, which must be specified: type of activity, organizational and legal form, the name of the organization, its legal address, as well as data about the founder of the firm and the location.

Then proceed to resume writing. It is important to understand that make up this section starts after the rest of the study. It is enclosed consolidated information that will be considered in the project. Conventionally resume can be called a kind of “squeeze” of the remaining sections of the project. It is important that in this section the reader got the answer to the two most important questions:

  • What benefits will potential investors receive,if they invest money in the project and it will be successfully implemented?
  • What are the possible risks of losses (partial or complete loss)?

In the “Statement of purpose” it is important to specify the whole purpose, tasks, possible problems, actions, deadlines, and the arguments that will allow investors to be confident in the success of the proposed project.

Assessing the possibility of organizing in the industry 

This section contains information about the organization. Pay attention to the regime of work and seasonality, as these factors directly affect the size of possible income. If the business plan is designed for an existing organization that plans, for example, engage in the production of new goods, the description of the section is reduced to listing the known data (organizational-legal form, methods of taxation, products, information on the company, and others).

For those companies that are only in theprocess of opening, it will be necessary to explore various regulations and other documents.

Describe a product or service 

In this section, special attention should be given to goods and services, which will make a profit. 

  • Make a detailed description of the primary and secondary products. It is desirable to provide project photos of finished products (samples) or by the samples.
  • Compare the product description portrait of a potential customer.
  • It is necessary to highlight the advantages and disadvantages of each product, compared with competitive products in the industry. On the basis of the received information is evaluated competitiveness.
  • Describe the process of the supply of goods or the provision of services (wholesale, retail, end user).

Such a detailed examination would help to understand, what is special exactly in your products and market as a whole.

Draw up a financial plan

This section is devoted to drawing up detailed estimates. In other words, there is a plan of all expenses that will be needed. It is better to do it best in tabular form, providing visibility and ease of study. It can be called the basics of every company set up.

It should be understood that any organization has a non-recurring and recurring costs. By the one-time costs are included fixed assets, but periodic in turn are divided into fixed and variable. Fixed costs do not depend on the volume of production. Of course, it makes sense to speak of fixed costs in the short term only, since in the long run all costs are variable.

Consider the risks

In this section, you can create a table for clarity, which will display:

  • Possible risks;
  • The probability of their occurrence;
  • Ways to avoid;
  • Possible losses;

If you are planning to insure any risks, it is also should be displayed in the business plan. Do not forget to include the cost of insurance in the financial plan.

What is this section? Everything is very simple. Every investor wants to be sure of the success of the project or at least to compensate for the loss. By knowing the potential dangers, it is always possible to avoid them or reduce losses. The main thing in this case is the knowledge of vulnerability and exclusion.

Add different applications, which include charts, graphs, tables, certificates, contracts, licenses. You can say that this kind of visual material which is placed in a separate section in order not to clutter up the project.

Applications

It should really contain all those documents, which were discussed in the business plan and that would serve as a confirmation of the above. It can be various schemes, plans, resumes, credit reports, letters of guarantee, the various statutory documents, etc.

The most common mistakes made when drawing up a business plan

  • Ignoring seasonal work. This defect negates all payments made. If the business is seasonal, it must be considered, when calculating the volume of sales, while trying to compensate for the lack in the other months.
  • Oversize planned sales (of production).
  • Incorrect calculation of working capital. It is important not only to determine the profits, but also with that part, which will have to use to continue to operate the business.
  • Understatement of the discount rate. Applies to own resources. Mistake is associated with the fact that was evaluated the possibility of using funds in the wrong amount, which could be involved.
  • Too much of a business plan. No need to clutter up the project with superfluous information.
  • Not realistic data. All information must be supported by solid arguments.
  • Incomplete information about the financial projections. All financial data should be specified for each month separately.
  • Surface analysis of the market. It is necessary to thoroughly examine the segment in which you want to work, because it affects business success.
  • “Approximately” costs. All of them should be taken into account and to be precise, because it will depend on the profit of your company.

At the end

There is no universal business plans. Much depends on the selected industries, especially in manufacturing, and other factors. It is necessary to approach the development of the project consciously, spending a lot of time and effort.

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