Is a business plan essentially a necessary tool in your business foundation?
Business plans are still popular tools, and unfortunately, planning is indispensable. According to Google keyword searches, in Germany alone, 165,000 Internet visitors search for keywords"business plan". This suggests that many aspiring businessmen have not dealt with writing a business plan. This fact is not surprising since most of them do not recognize the importance of a business plan. But is it really so necessary today?
"No! The business plan doesn't survive! says Steve Blank. – Before going into the reasons why I think business plans are unnecessary, I would like to say that this opinion is based on my own experience.”
Why is a business plan not needed?
1. You can create enterprises on the Internet.
Today, almost anyone can start an online business with minimal capital expenditures. It makes more sense instead of spending weeks of preparation on a business plan. Low start-up costs for Internet business models will allow you to create a foundation without the help of banks. If you can start a business without borrowing money from anyone, you don't need a business plan.
Today, the most important reason for the emergence of a business plan is the need for borrowing. A dependent company cannot ignore the business plan. This would be much more important in the context of a business model, but it is required for banks, investors and consultants.
2. Existence of alternative sources of financing.
Only very few people who want to start an online business will take out a loan from banks or investors. Because this would be a prerequisite for the collapse of the company from the very beginning. The most common sources of funding for small business owners are parents, friends, or a wealthy uncle.
Another source of business financing is a sponsor.
3. Time flies faster than the business plan data is updated.
A business plan is always based on assumptions. Assumptions, in turn, are based on the circumstances prevailing at the time of creation. But now we live in a time that is unstable. In the technology industry, we face change every day. The business plan figures generally refer to the next 3-5 years. And six months pass and the basic data becomes outdated.
4. Nobody reads the business plan.
Bankers, when reading resumes, look at the numbers and imagine credit scores. Banks have lists in each sector, which are classified by risk category. The business plan can be created so carefully that the bank has no criteria for refusing to borrow.
There is a difference between a business plan and business planning. Every business must be planned. The planning process is important, but more attention needs to be paid to the business model going forward.
The business plan as a document as we know it today will soon disappear. Very good tool, which is the market leader today, is PlanCruncher.
Good luck in business!
Is it worth the time and effort to write a business plan? After all, this document, unlike, for example, the charter, is optional, and in order to draw it up, you need to work hard. Some quite progressive business representatives believe that any plan is a framework that prevents you from reacting flexibly to new circumstances. To understand why a business plan is needed, you will have to consider what information it contains.
For external use
It is important to understand that any plan is just a blueprint for your activities. You can always put it aside and write a new one. Words and numbers written down on paper are not limitations, but tools that can help you achieve success. But you may not achieve it if you don’t do anything. In general, you should not take a business plan as some kind of immutable given: draw it up and benefit from it.
For investors
One of the common reasons why people with a business idea make a plan is. No matter how good the prospects for your activity are, in order to receive money for development, you simply need to convince those who have it of this.
In addition, a properly drawn up plan helps you see whether you need other people's money at all. It is quite possible that at some stage you will have additional resources and you will be able to refuse loans.
Mini start
By the way, in order to do without injections from investors, you only need to start production with very small volumes. This will require additional time, but will allow you to test the process and make the necessary adjustments as you go. And most importantly, it will save you from possible debts.
For buyers
Before, it needs to be properly assessed. Services for such assessments are provided by specialists. But it will be easier for them and potential buyers to navigate if you show your business plan.
For enterprise
Why does a company need a business plan? It will also be useful for you, as an owner, to see what your actions may lead to in the near future. This contributes effective management both strategically and financially. You probably make preliminary sketches that only you can understand in a notebook or on a napkin. So, a business plan is the same records, only put into a form that is understandable to everyone around you.
For the team
Why do you need a business plan within an enterprise? It will also be useful for your team of like-minded people (even if it consists only of your spouse) to become familiar with the prospects for the development of your brilliant idea. If everyone at their workplace clearly understands what goals they need to strive for and what tasks are being solved, this is additional motivation. It is no less important for the people working with you than for investors to know that their place of work is not an adventure that has no clear outcome.
Selection of partners
Having made preliminary calculations, you will be able to understand, for example, at what price it will be profitable to purchase raw materials (products), and which suppliers it is better to refuse. If there are no suitable ones nearby, you will look for them elsewhere, including delivery in the cost. And in the end you will find what you need.
That is, the conclusions you receive as a result of calculations should push you to some effective actions. And this will be the first result of your planning.
Growth Opportunities
Any enterprise is an active form of life that strives for development. But you can also develop in different ways. For example, you are planning an expansion. You need to know when your business will start making enough profit to buy additional capital goods (another truck, bus, machine).
But first you need to assess the need for such an expansion. For this purpose, market analysis is carried out. It is quite possible that the demand for your product is completely satisfied and the consumer is waiting for something else. This means we need to expand our range. How? Write in the plan.
Maybe you decide to develop in a different direction, and instead of another bakery, buy a mill to provide yourself with raw materials of your own production.
You will make all these conclusions based on some calculations, and they will also be reflected in your plan in the form of tasks and deadlines.
Fight against competitors
How will you get around? How will your product or service be different? To do this, you need to know who and to what extent is your competitor in the fight for customers’ money.
Maybe you will do flexible pricing policy, making sales, giving away to regular customers discount cards. This will reduce your revenue. How much? How often can you afford to sell a product at the lowest price? What is the expected result? A business plan should also help answer these questions.
You may decide to buy out competing businesses, becoming a monopolist on your street - it all depends on the area and scale of your activity.
In case of failure
Don't forget about possible failure. What will you do if raw materials suddenly become more expensive, demand is not what you expected, or a fundamentally new product appears on the market that will replace yours? Rains, drought, inflation - it’s impossible to foresee everything, but additional reserves must be included in the plan. They will allow you not to give up, but to start a new startup.
So, a business plan is not such a useless thing; it will help you stay on course and achieve your goals.
Business from scratch. How to write a business plan: Video
As Wikipedia assures us, business planning is, in a simplified way, drawing up plans and strategies for achieving them in business.
Business planning is a long-term plan for achieving business success. Although, not necessarily success. A business plan, after its detailed development, may well show that this business should not be undertaken.
That is, for now, we will highlight 2 main tasks for business planning. First– identify the objectives facing the business and ways to achieve them. Second task– assess as accurately as possible how profitable it will be to achieve the planned profit targets, reach the target audience, and so on.
We have roughly decided what a business plan is. Now one of the most important questions is: is this plan worth drawing up? After all, many startups start and even become successful without any business plans . Maybe a business plan is just a relic of the past, of old businessmen who lived in the last century and who, with their ossified thinking, are no longer able to keep up with young and ambitious people who do without any plans?
No, business planning is still relevant today and will always be relevant. But not for everyone. Let's figure out who should pay attention to careful business planning, and who just needs to figure out a project on their knees and get down to business!
Who needs to write a business plan?
First of all, large businessmen who, when launching new business They're investing serious money in it. How do you feel about risking a billion dollars without even working on a business plan? Absurd.
Many experienced businessmen, before investing big money in new project carefully weigh the risks and calculate the business model.
Often, drawing up a business plan is carried out with the involvement of contractor companies that specialize in this matter, assess risks, and conduct research.
Creating a thorough business plan can take a long time, it is not a quick brainstorming session for a couple of days, as startups often do. A serious business plan sometimes costs tens or even hundreds of thousands of dollars. But it's worth it, because the risks are very high.
To summarize, I will say that it is necessary detailed business plan should be done in cases where you are handling a lot of money and the risks of a new project are very high. But for those who actually implement such projects, this article is hardly interesting. I provide this information for information purposes only.
Who doesn't need to write a business plan?
As I already said, if you are just starting a business and want to get a taste of what it is, then you can completely do without a business plan. It’s enough to roughly estimate what you will offer to the market, why people will buy from you, how you will communicate about yourself to customers, how much it will all cost, and what you will end up with.
Some startup projects begin without a business plan at all, relying solely on the adventurism and boundless energy of their creators. In 99% of cases, such “businesses” turn out to be unprofitable, by the way, largely due to the fact that the business plan was not worked out and could not be worked out. After all, on serious research There are no resources, and there is not enough knowledge and experience to carry it out independently, at least at an overview level.
The main idea that I want to convey in this paragraph is that you can do without a business plan if you are a beginner businessman and do not risk serious money. By “not serious” money, I mean an amount that is no more than yours monthly salary. It is quite possible to use it for experiments and accumulation of experience, since you have matured enough to start a business. Moreover, if you do not give up the idea of doing business, then for this money you will buy yourself irreplaceable experience. Many people go exactly this way.
If you are from the start of your first small business is separated by the idea imposed by someone that it is necessary to draw up a business plan in a long and detailed way, then to hell with it! Figure it out on a napkin and try it! This will give you more benefit and understanding the real situation than endless theorizing. But let me emphasize once again, this is provided that you do not risk a significant amount of money for you!
What is the most important thing a startup needs to do to create a business plan?
When choosing a middle ground between whether to draw up a detailed business plan or not, I suggest choosing this option. It is suitable for budding entrepreneurs.
The point is that a business plan is drawn up, but not too detailed.
What must be in a business plan? Let's look at it in order:
- What do we sell?. I hope everything is clear here. What is our product, what do we sell.
- Expected earnings, which consist of the price of the product sold and the number of sales for the period.
- All expenses. For advertising, delivery, production and so on.
- What results do we want to achieve?. Usually this is the result in money, in net profit, that is, all sales minus all expenses. This is one of the most important points based on which need to do decomposition . Let's take a closer look.
Decomposition
Decomposition is, in fact, the main thing for which this is done sample business plan. Its essence is to, in reverse order, “from the result,” decompose our entire business into its component parts.
For example, we want to receive 100,000 rubles per month. From one sale, we calculated that we received 10,00 net rubles. Therefore, to make 100 thousand, you will need to make a sale only 10 times. This is real in our business, can we do it? By answering this question, the business prospects become clear.
At first glance, such a calculation seems primitive and not worthy of attention. But! This is where the main trap lies. Almost no one does this calculation . People will get enough of the idea that they will earn the planned money just like that. And when they sit down and start counting, it turns out that everything is not so simple.
Conclusion - always do this decomposition. Always. At least this . If you take this conclusion from the entire article, you will save yourself from many mistakes that I myself once ran into.
And finally, it must be said that it is most likely impossible to estimate these indicators quite accurately. The higher the experience, the more time devoted to assessments, the more accurate they are. It is important to maintain a golden mean here. For example, cost estimates with proper experience can be roughly estimated quite quickly. And thus calculate the approximate profitability.
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Nowadays, online stores are becoming more and more popular view business. As a rule, many people start doing this due to the apparent accessibility of the business. At first glance, indeed, everything looks quite simple: created a website, filled out a product catalog, bought contextual advertising and sell yourself goods. Thus, every fifth person makes an online store, which, as a rule, fails sooner or later, because something somewhere was not thought of, not completed, something was completely forgotten, something was not even thought about. It even becomes offensive, sometimes good ideas startups fail at the initial stage of creation, and all due to the lack of a proper approach to business planning.
We won’t talk about the fact that business plans for businesses of this kind need (simply necessary!) to be written. Let's assume that everyone actually writes them. I have come across more than one business plan for an online store, these were clients, potential clients of our agency, my friends, and, of course, young startupers. What did I see in these business plans? These were rather small, superficial records (documents) that described what the online store was going to sell (product matrix), and specified delivery and procurement logistics. Already good :) In some cases, in the business plan it was possible to learn about some more management issues, the presence of a warehouse, your own courier, guarantees and return of goods. Magically! Let's launch! What's next?... And then usually everyone has the same thing - there are no clients, and, accordingly, no purchases. Immediately the owner has thoughts: “How can this be? We paid money to create a very beautiful website, fill the catalog with wonderful products, launched the website, and even invested a substantial budget in contextual advertising! Where are the clients?!” Most likely, an impatient businessman will close this business and start doing something more stable and bringing in a guaranteed, albeit small, income.
But what was really worth doing? It was necessary for initial stages business design, take a more responsible approach to creating a business plan in terms of “Attracting clients” and “Marketing”, consult with experts in these matters, who would suggest that you need to think through not only what to sell and how to deliver, but also think about how the project will be return the funds invested in it, that is, predict the sales of the online store, understand which sources of traffic traffic will provide them at the required level, while it is necessary to take into account the conversion level of the online store itself, i.e. its ability to convert visitors into clients. It is necessary for specialists to forecast traffic and conversion. After all, this is precisely the potential cash flow of your future online store.
Of course, if this is not your first online store, then most likely you have already fully understood some of the intricacies of doing business and have already gained experience. But, if you have decided to create an online store for the first time and do not want to get into trouble, then it is still better to turn to professionals in the industry and consult with experienced people as much as possible. Let these tips cost a certain amount, but you will get a guarantee that your store will not suffer defeat at first, and in the future it will only expand and bring more and more profit. You will be able to understand when you will reach operating profitability and when you will return your investment. Over time, you will probably be able to staff and set up your business so that at some point you will leave the business so that it works without your participation and only brings you income.
But all this is possible only if there is an initially competent approach to organizing a business (by the way, not only an online store, but any other). So what do I mean by “smart approach”? I’ll try to describe it point by point, but in sufficient detail. I will say in advance that the actions described below are not some kind of idle talk for me; all this is constantly done for the clients of our WebProfiters agency.
1. For the profitable operation of an online store, you need to know the sales volume that will cover all your expenses and bring profit, what you want to get in the end;
2. You need to make a forecast of the conversion of online store website visitors into buyers. Such a forecast can only be made by a professional in the industry who has already seen a considerable number of online stores and other commercial Internet projects;
3. Using this conversion forecast, the number of site visits that is necessary to ensure a given level of sales is determined;
4. Then the possibility of receiving this amount of traffic, as well as the sources and methods of receiving it, are determined. The main thing here is not to get carried away with the initial profitability of the business, otherwise you have seen such business plans, after calculating the traffic for which it became clear that you could not gather so many visitors throughout the Runet.
5. After carrying out the above actions, we obtain a sales forecast, marketing channels and costs for them. This is the most important part of a business plan that new entrepreneurs so often miss.
Thanks to this approach to organization, the business owner will have a clear mathematical plan for attracting visitors to ensure sales, thus insuring himself against losses that would be very likely with an amateurish approach.
I would also really like to note that it would be great to initially develop the structure of the site using the same approach, to think through possible paths of visitor behavior on the site that will definitely lead him to a purchase. That is, manage resource conversion in advance, and not in “rush mode.”
Our agency approaches all projects with the utmost seriousness. Work on the draft online store business plan is carried out comprehensively at all levels of development. In addition to the structure, work on creating a website should be preceded by a set of works to develop marketing requirements for the site itself. This is the formulation of the goals of the site for business, the choice of tools and methods of presenting products and competitive advantages on the website. We create templates for the main pages in the format of flowcharts of elements for subsequent design, which protects against an inconvenient interface in the future. A comprehensive analysis of competitive sites is carried out to obtain industry best practices; the audience of the current site is analyzed to take its parameters into account when creating a new one. Next, the requirements for the text and graphic content of the site are created, optimal for visitors and search engines, and optimal scenarios for the behavior of visitors on the site are formed. Only after carrying out this work should you begin to create technological requirements for the new site in terms of programming, layout, speed, fault tolerance, reliability and security of the new site, as well as its future promotion in search engines. Designing this format can significantly increase website conversion, its traffic and, as a result, sales and appeals.
In conclusion, I would like to note once again that only such an integrated, comprehensive approach to creating an online store will lead your business in the right direction. Thoughtful sources of attracting traffic to the site will bring you a visitor, an attractive design and clear structure will ensure the visitor’s comfort on the site, designated behavior paths will lead him to a purchase, and you to profit.
You can always purchase a ready-made, professional online store with a beautiful, convenient and modern design at an affordable price in the online store supermarket"Shopegg.ru" .
Business plan. More than a hundred thousand people search for these 2 cherished words in the hope that they will find a great plan that will open their eyes to the essence of what is happening. Suddenly, in some inexplicable way, it will become clear what needs to be done and why exactly.
The truth is out there somewhere
And then there are more sophisticated ones, they find a site where they sell thousands of signs with different business plans, pay for this grail and begin to pray for it day and night. The ground doesn’t hold up, your legs give way, the taste and smell of victory becomes so close that a month later these writings remain lying around in yet another new folder on your hard drive.
There are more advanced ones who are trying to find not a business plan, but how to write a business plan. These are already such seasoned people, you get the feeling in your head that if they know how to draw up a plan, they will be able to apply it to any idea that comes to mind. Accordingly, wealth will know no boundaries; they will be able to proudly say, I am a businessman. Do you recognize yourself?
Are you serious? At some point, did you decide that you were smarter than others and entered these two words into the search? If you find a business plan for a brick factory in a search, will you open it immediately? Yes, even if you find a business plan for a shawarma shop, you still won’t take any action to open your own business. The point is not even that, the article was not written for motivation, the point is that a person who knows how to cook shawarma can open a shawarma shop, but not you. The manager of a brick factory will be able to open his own factory because he knows how and knows how to do it.
Looking for a ready-made business plan is not the best way to start
If these 2 words are still playing in your head and you are ready to search for them again, then get out of your head the idea that you could become a businessman. Business is built primarily on skill and knowledge. IDEAS. Entrepreneurship is a field where you spend every day in the dark. New problems, you belong to yourself, there is no one to tell you, there is no boss who knows more than you. With all this, if you do not know the field in which you work, sorry, you have no chance. All that remains is luck. In general, instead of asking for “business plan,” we recommend asking “how to attract luck.”
If you don't have a clear vision of what you want to do, a business plan won't help. Knowledge will help. Better stay at work, do what you can and develop. Study, and after that it may be worth starting a business in a field that you know better than others. This is why there are so few young successful entrepreneurs, they start from the wrong place. Through a lot of trial and error, you come to understand how to do it right. This article is just to help you avoid one of the most main mistake– spend time re-reading business plans.
Decide on an idea. And then write your own business plan. Calculate all costs. When you understand that the chosen business will bring the desired income, it’s time to get started!