If you seriously decide to stop working for someone else’s uncle and start your own business, we congratulate you on the best choice of your life! We’ll warn you right away that he won’t make your life easy and calm - rather, on the contrary, you will lose sleep and peace for many years, but we assure you that after many years you will be sure that it was the best decision to establish your own business in your life. However, business is not an activity that can be performed, as they say, without a calculator in hand. Therefore, you definitely need to plan your future venture. A logical question arises - how to calculate a business plan, and what items should be included in it? We will talk about this in this article.
First of all, the purpose of the business plan is to provide the future businessman (as well as the investor potentially interested in investing in the future enterprise) with clear and understandable information about the planned activity, the necessary investment volumes, risks and the predicted indicators of costs, revenue, profit, profitability and payback of the project.
There are many standards for drawing up business plans that govern how to draw up a business plan, which items should be included in it and in what order. As a rule, all these standards change only the form of data presentation, depending on in which form it is convenient to analyze the representatives of a particular organization, and as for the content, the requirements for it are similar in all standards.
Starting to answer the question of how to draw up a business plan, we recommend that in the first section of the business plan we present your idea of your future business as concisely as possible. It is worthwhile to choose an idea carefully and not try to implement a super-innovative idea if you are not sure that the product or service you provide will be in high enough demand. In the first section, also called a summary, it is worth mentioning a few predicted figures in order to interest the investor in further reading the document.
We propose to devote the second section of the plan to a more detailed description of the production process and a description of the final product. Thanks to this, your investor will immediately have an idea of what you plan to do.
Starting from the third section, calculations begin. The third section is recommended to analyze the potential market, for this you need to analyze the geography of distribution of products and find out all demographic information about the population of the target region: age, sex structure, level and structure of income, housing provision and much more . Thanks to this, you can evaluate the target audience of your product. After that, you will be able to determine a plan of marketing measures to attract consumers.
In the fourth section, you will need to calculate the production plan based on the received data on the consumer audience. Based on the planned number of products you can calculate the unit cost of production.
The fifth point is the most important. This is the financial plan of your business. If you do not know how to draw up a financial plan, then you do not know how to draw up a business plan as a whole. In financial terms, you must indicate all the costs of starting a business and starting the production process, you must also describe how to get the necessary funds - investments, bank credit, investing your own savings (it is also possible to combine several sources in different shares). Having described all the costs, proceed to revenue planning and based on a comparison of these two indicators, calculate the net profit. The last step in drawing up a financial plan and a business plan as a whole should be calculating the payback period of the enterprise - based on this indicator, you and your investor will be able to understand when the money invested is fully returned and the company starts to make a net profit.
We hope that by reading our article you will get rid of doubts about how to draw up a business plan. Good luck to you and your future business!