How to write a Business Plan

The business is the same as traveling. You can make it with intuition, but if you need to communicate your destination to those who go with you or who help you on the way, you must know where you go, which way you go, how much it will cost and what risks you undergo. It is said that the paper can take anything, but who once tried to write a business plan, knows that many things on the other hand, on the “paper” rise to the surface and people will realize what needs to be done, what business idea or startup will cost.

Why do we write a business plan and for whom?

At the very beginning we need to realize WHY and for WHOM we are writing the business plan. The most common reason that force us to write a business plan is to convince some investors to invest their funds in our company, project or startup (it could be a thousand different forms and names). However, business plan can be written for ourselves, for the team of people who share the idea - to compare the ideas, to have clearly drawn, what we want to achieve, by what means we want to achieve it, whether there are customers or demand and so on. The plan can also be used for keeping the same way of the team - that everyone in the team can pull together. A business plan can be used by mature companies as well, not just by startups, teams or entrepreneurs.

The idea is worthless, the key is the realization

WHAT exactly is the subject of our plan and HOW to achieve goals? We can have a brilliant idea or invention, but the idea itself has no value. The world is full of ideas. What makes ideas functioning services or products, which have success on the market, is the ability to implement them. The ability to build a strong team, the ability to transfer the idea to the team, the team’s ability to develop ideas, the ability to secure financing, the ability of team members to pull together and of course the ability to tighten the whole thing up to the sale to real customers to bring profits. That is what investors are interested in.

The aim is to gain

Profit is not immoral. Profit is the excess of business, it is a basic metric of business success and only profit can be a source for further business development. Profit is simply the difference between costs and revenues - it is therefore crucial to know when it will be our intention to profit (whether we need to know it for ourselves or for the investor). We need to know how the costs will be spread in time costs and what they consist from. And so we need to know how they revenues will be distributed in time, and if we manage to overcome the period when we have a lot of expenses, but income is not enough to cover. Only from the profit more ideas and further development can be invested.

Who will pay for it?

Everything is worth something. Every activity and every expense someone has to pay. Either we pay for it from our previous corporate profits, or from working capital (which can only afford a few lucky people) or from the customers revenue, if we already have some or obtain some money (capital) from the outside. Some are lucky enough to have rich parents, friends or other well-known, some will turn to the investor, someone gets money from the state (which however obtained it from income tax from companies, entrepreneurs or employees).

Would be anyone interested?

To not do a bill without a guest, you need to think about the customers. So for those who are willing to spend their money to buy the idea, those who generally pay for everything, up to we run out of funding or money from investors. It is important to know how many of them there will be and what they actually are (see segmentation), how do we persuade them, how and at what time we reach them and get them for our great idea.

The business plan is still a plan

The business plan will likely change in the course of writing - and it is also an important added value for its elaboration and development. Even the work will give you a feedback. The most common touchstones during the creation of the plan is the ability to identify the target group of customers, target markets, to estimate their size and the ability to absorb your idea and assess their willingness to pay for your idea (sorry - the product or service). Remember one million times proven right - even the best plan of the best entrepreneurs will change over time. Yours will also change.

Look at the example of the business plan and remember - it is just a checklist of what should a perfect business plan contain. Yours will certainly vary, because you cannot cover all the differences of all types of business. Thus, as with everything you mainly use your own brain.