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How to start a business: a business plan

How to start a business a business plan


You've already devised and presented a plan for the expansion of your company. Now it's time to calculate everything in detail. Step-by-step instructions will help you with this: how to write a business plan.


A business plan is a full explanation of your concept, complete with figures and future projections. Potential investors or the bank to which you will apply for a loan, as well as partners, middlemen, your team, and, ultimately, you as the project's originator, will require it.


Typically, a business strategy is created three to five years ahead of time. But you can take a year, as economic conditions change rapidly.


If you have a unique business idea, you will need to create your own business plan.


A business plan includes a description of a product or service, market analysis, a production plan, the organizational structure of your company, a marketing strategy for promoting products, and a financial plan that summarizes all the basic calculations. A business plan must answer the following questions: how much money is required to launch a project and how long will it pay off?


one.Summary


The summary is at the beginning of the business plan, but you will write it at the very end. This is a summary of the entire document - the conclusions that you will draw on the basis of detailed calculations. After reading the summary, investors decide whether to study your plan further or not to spend time on it.


A brief overview of the project and its competitive advantages, as well as information on possible clients and collaborators, are included in this item. Tell how you are going to sell your product or service and how to advertise it. Specify what kind of start-up capital you need and where you plan to get it. Describe the key stages in the development of the project and be sure to include the payback period and planned profitability.


Consider how to write a business plan using the example of an online chocolate store with delivery in a small town. Unlike analogues, in this store the buyer will be able to choose the original filling, design and packaging. For this, the site will have a special constructor.


2.Product description

How to start a business a business plan


In this section, you need to describe in detail the service or product that you offer and analyze its potential.


You can compare your product with similar products and suggest ways to improve your product.


Product description example


Business type Online store of original chocolate products with an online constructor for self-assembly

Product/service Colored chocolate with unusual additives, unique design and unusual decoration, which the buyer can choose for himself. There are no direct analogues in the city

Business model Development and promotion of the product in-house, production first independently, then with the help of a private factory, sale and delivery with the involvement of freelance contractors

Relevance   Online trade is growing, interest in confectionery products is not decreasing. New interactive format can attract audience

Development options Expand the assortment, open a chocolate store and sell a franchise in the future


3.Market analysis


From the already developed business strategy, transfer the market analysis to the business plan. Offers of competitors should be considered in more detail.


In the case of an online chocolate store, competitors will not only be online sweets stores, but also candy stores, gift shops, supermarkets and private craftsmen who make sweets to order.


Supermarkets. There are 5 large supermarkets in your city with a wide range of chocolate. They account for 55% of chocolate sales.


Confectionery shops. There are 50 points of sale of sweets in the city, 5 of them sell online. 10 sell only chocolate and only 1 of them has a website. 25% of the market in terms of sales.


Shops of original gifts. 30 online gift shops. 10% of the market in terms of sales.


Private online sellers. About 20 profitable private traders. 10% on sales.


Based on the analysis, draw a conclusion: what market share can you claim.


For example, you estimate that in the first three years of operation, your online chocolate store will take a share of 35% of the online chocolate sales in the city.


four.Characteristics of potential buyers


Describe in detail who you're aiming for and who you'll be selling your product or service to. The answer is "all," which is inaccurate. It's like shooting sparrows with a cannon. You should have selected your target audience during the company planning step.



For example, for an online store of original chocolate, you have selected original buyers. They love out-of-the-box things and should appreciate the opportunity to make chocolate to their own taste and design. You estimated the share of these users at 20% of the total number of those who buy sweets online. This should ensure sales of 2,500 chocolate bars per month a year after launch.



5.Production plan and cost calculation


To calculate the cost, you need to estimate:


  • direct costs for the production or purchase of raw materials and packaging from the supplier;
  • wages of employees per unit of goods;
  • Rental of buildings and equipment, as well as utilities, are examples of indirect expenditures.advertising and promotion costs;
  • the financial cost of servicing a loan or loan.


At the initial stage, you plan to brew chocolate yourself.To make one bar, you must calculate the costs of chocolate, milk, sugar, and other materials. You may need to rent a room where you will produce it: divide the cost of rent by the number of tiles you plan to sell in a month. If you need a refrigerator, estimate its lifespan and recalculate the price for a month, and then again for one tile. And so it is with all expenses.


6.Promotion plan


The goal of promotion is to successfully bring the product to the market and capture its share of consumers.


The promotion plan answers the questions:


What offer to make to the buyer?

It includes not only the price of the product itself, but also additional services, such as free shipping, discounts and special offers.

What sales channels to use?

It can be not only direct contacts with customers, but also partner channels.

How to stimulate sales?

You can enter bonus programs, discounts for regular customers, customer cards.

Which advertising support to choose?

You can use direct advertising, participate in partner events, write articles for popular online resources, become a sponsor of social media contests, and so on.


Suppose you decide to set the price for the finished chocolate bar - 15$, and for the one made according to your personal design - 20$. If you buy two tiles, the third one will be free. In the future, to stimulate sales, you can offer customers a bonus card.


Since you are selling online, most of your advertising support will be online. But it is also planned that your company will participate in master classes, promotions and barter partnerships.


Partners can be a local online flower shop and a trendy beauty salon. They can offer discounts and coupons for your chocolate, and you for their services.


7.organizational plan


Here you describe the structure of the company.


  • Organizational and legal form LLC or IP
  • The structure of the company Planned divisions
  • Management Composition Name, age, education, work experience
  • Staff Number of employees, their positions and their remuneration


Specify which departments will be included in it, who reports to whom, and also draw up a staffing table: a list of necessary specialists with salaries. It is important to determine the scope of their responsibilities and the order of interaction between departments.

For an online chocolate shop, everything is simpler: you hire employees for remote work. Your main labor resources are a website developer, a copywriter, phone operators for taking orders, couriers, an accountant for one-time jobs. In the early months, while sales are low, you can brew chocolate yourself, take and deliver orders - and save on this.


If you plan to attract partners for the production of goods or purchase a ready-made product for resale, for example, you will sell postcards along with chocolate, also include them in the organizational plan. Describe the terms of cooperation.


eight.Financial plan

You need to describe all sources of funding and income, as well as all expenses - one-time, recurring and recurring - taking into account marketing, production and organizational plans.


Consider in advance how much money you will use to develop the business. How much of your own money are you willing to invest? Who could borrow extra? For example, banks or microfinance organizations. Or maybe you will turn to investors who will receive a share in the company and become your partners. Do not forget about the  possibilities of state support for small businesses and  crowdfunding .


Let's say you are willing to put $35,000 of your own money to work and you are able to raise the same amount from investors. This amounts to a total of $70,000. It is also worth considering how much money you will make in the first month. For example, let's say you want to sell 300 bars of chocolate for $5 each. The estimated total income for the first month is $1,500.


Example of cost plan for the first month


Company Registration (IP) Costs                 80

Buying a domain                                         20

One-time Site creation                                 1500

Purchase of equipment                                 7000

Advertising campaign to launch the project          800

Advertising                                                  300

Monthly Employee salaries                          3000

Production costs                                          450

Periodic Production of booklets for events  250

Making business cards                                  100

Total                                                          13500


And this calculation will need to be done every month.


Do not forget about the taxes that will need to be paid at the end of the calendar year. To calculate taxes, choose one of the five taxation systems .


For example, you can choose a simplified tax system for individual entrepreneurs for a modest Internet store. Under this system, you pay only tax on individual entrepreneur income - 6%, and in some regions - only 1%. If the profit is negative, no tax is due.


You will be able to calculate how much money you will need to establish the project, when it will attain self-sufficiency, and when you will be able to return all of the invested cash using the financial plan.


Conclusion: the store will break even in the third month. By the end of the year, the project will fully pay off the investment. A business idea worthy of implementation.


If you doubt your calculations, it is better to involve a specialist in drawing up a financial plan. It costs some money, but the costs will be much lower than in the event of a mistake.

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