Do you have an entrepreneurial idea and have decided to start your own business? Advice and information about the steps you need to take is certainly not lacking.
However, it is often forgotten or considered less important that one of the first steps in starting or growing a business is the development of a business plan. It may sound bureaucratic, but the business plan isn't some kind of luxury document just for a bank or a contest. It is a tool that saves time, money and nerves. By creating it, you confirm to yourself the sustainability of your own idea or see what else needs to be worked on.
What is a business plan?
A business plan is like a ticket, you can travel without it, but you are more likely to get lost along the way.
A business plan is a written document that clearly and in detail shows where we are currently, where we want to go with business and how we will get there. It defines an investment plan, describes products or services, analyzes the market and competition, sets goals and elaborates a financial and operational strategy. It is not a template form, but a flexible tool that adapts to the purpose, whether it is written for ourselves, a bank, an investor or a tender.
A well-designed business plan not only serves to present beautiful figures. Its greatest value is that it helps the entrepreneur to objectively see the feasibility of his idea, anticipate possible challenges and prepare answers to them, recognize competition, set clear and measurable goals, organize financial and human resources, and lead the business towards sustainable growth and long-term success. A business plan is not a guarantee for a successful business, but the more concrete and realistic it is, the greater the chances of success.
To whom and why is the business plan important?
Regardless of the size or type of business venture, a business plan is a document that brings clarity, structure and direction. His role goes beyond formalities. It becomes a tool for better organization, strategic thinking and convincing others of the seriousness of a business venture. A well-designed plan helps to make informed decisions, reduces business risk and facilitates communication with all stakeholders.
- For the entrepreneur
Developing a plan allows the entrepreneur to think in a structured way about what he wants to achieve, why he does it and how he will implement it. This avoids rushed decisions and provides insight into the feasibility of the idea itself.
- For financial institutions and investors
Banks, funds and potential investors will not decide based on enthusiasm, they are interested in a concrete presentation of the business model, market potential and financial expectations. A quality plan increases credibility and gives confidence that the investment is justified.
- For partners and associates
Suppliers, consultants or strategic partners want to understand the business logic and growth plan. The business plan provides them with a basis for assessing the sustainability and potential of cooperation.
- For internal organisation
If the business involves these people, it is important that everyone understands the goals and how they are achieved. The business plan helps align activities and communication and increases clarity of roles and responsibilities.
- For long-term stability
A business plan is not a single-use document. With regular updates, it becomes a tool for monitoring progress and adapting to changes. It enables an entrepreneur to identify challenges in time and make strategic decisions that lead to sustainable growth.
What does a good business plan look like?
A quality business plan does not have to be comprehensive, but it needs to be clear, realistic, concrete and fit for purpose. Avoid writing based on assumptions and desires, your plan should be based on verifiable data and arguments. The more thorough your analysis, the more credibility your plan will have.
Key features of a quality business plan:
- has a clear goal and direction of development,
- realistically displays the market and competition,
- contains concrete figures, estimates and projections,
- explains the investment potential of the business venture,
- It is tailored to its purpose.
The most common mistakes to avoid:
- superficial or incomplete analysis of markets and competition;
- over-optimistic or unrealistic financial assumptions;
- Unconnected structure, unclear logic and vague objectives.
Answer the questions:
- What is the subject of the entrepreneurial venture and who are its holders?
- What market benefits does a product or service have?
- What is the potential for sales and growth in the market?
- What resources are needed to start and operate (people, space, equipment)?
- Where will the activity be carried out and are additional permits required?
- How many employees are needed and what are their qualifications?
- What is the sales and promotion strategy?
- How much money is needed and for what purpose?
- What are the planned revenues, costs and expected results in the coming years?
Structure of the business plan
The business plan consists of three key parts: the descriptive part, the financial part and the annexes;. Each of them has its own purpose and contributes to the overall picture of the business venture.
1. Descriptive part – who, what, for whom and how?
This section explains the idea, the logic of the business and the context in which it develops.
- Summary – Brief overview of key information from the plan, written at the end and located at the beginning of the document
- Description of the company – what it does, who runs it, what is its legal form and vision
- Product/service – what is offered, what is the added value and why would customers choose it
- Location – description of the business premises, what is the legal status (rent, ownership), where it is located and the advantages of the site
- Organisation and employees – description of key persons, their responsibilities and expertise, number and profile of employees required, working conditions
- Market and competition – what the sourcing and selling market looks like, who are competitors and what are their strengths or weaknesses
- Marketing and sales – promotion methods, sales channels and strategies to reach customers
- Investment structure – what is needed to start a business (equipment, services, infrastructure) and indicative costs.
2. Financial part – how much, from where and with what expectations?
The financial part provides an overview of the necessary investments, expected revenues and the sustainability of the business model.
- Estimation of revenue – calculation of planned revenue by year.
- Price calculation – structure of the cost per product/service and formation of the selling price.
- Operating costs — Material costs, external services, personnel, overheads.
- Investment plan – a detailed account of the planned investments.
- Sources of funding – own funds, loans, loans and other forms of financing.
- Depreciation – a plan to spend fixed assets over time.
- Profit and loss account — a statement of income and expenses with a view to determining the expected profit or loss.
- Cash flow – a plan to move money over time and preserve liquidity.
- Financial-market score – Project efficiency indicators and dynamic score: Return Period, Net Present Value (NPV), Internal Rate of Profitability (IRR)
3. Annexes – Evidence and support
The annexes confirm the plausibility of the statements made in the plan. These can be:
- Contracts and Letters of Intent with Partners and Customers
- pro forma invoices and offers and equipment specifications
- visual materials such as design of the space, photographs of the product
- company documentation, certificates, certificates, market research
- CVs of key persons
You need a business plan, but you don't know where to start?
Creating a business plan is a process that requires a lot of research and information gathering, market analysis, financial planning, but also strategic thinking.
If you are not sure where to start, what to include or do not have time to create a professional and clearly structured plan – we will help you.
In cooperation with you, we create customized business plans for different needs:
- self-employment applications;
- tenders and grants;
- requests to banks and financial institutions,
- strategic development and expansion of business.
We will ensure:
- a clearly structured and comprehensible document;
- detailed financial analysis and projections;
- advisory support throughout the process,
- help with registration.
Are you still wondering if you need to hire a consultant or not?
The involvement of experts can bring objectivity, expertise and greater clarity to parts of the plan that you are less familiar with (especially in finance). But no one but you can explain your idea, vision and motivation. That's why your involvement is crucial, and we are here as partners who facilitate the process and help shape the story into a document that you can proudly present.
- The price of the business plan depends on the complexity of the project and the project application and the scope of the investment.
Our goal is your success.
Together, we shape sustainable solutions and create the foundations for growth, competitiveness and innovation.
Get in touch at rraporin@porin.hr or through contact form and arrange individual counseling.
