How to make a business plan for your enterprise or SME?
When you decide to invest your savings in a venture, the business plan is the first step to put your ideas and resources in order. By having a guide to the operation of your company, the chances that it will be profitable are higher, because the value proposition is clearer, finances, processes and actions will be better organized and on track in the long term.
If you are still not clear about what a business plan is and how to prepare it, in this post we will guide you so that, in the end, you can organize yours without complications.
What is a business plan and why is it important?
The business plan is a document that allows you to identify and plan the objectives and viability of a company. It includes detailed information about the business identity, operation, costs and growth potential.
Having a business plan for your SME is essential for these reasons:
allows you to define the strategies and goals necessary to achieve real economic benefits.
It is a key tool to attract investors or request financing because, with this document, you can support your business in the face of other institutions and publics.
How to make a business plan step by step
We know that the ultimate goal of your company is to be profitable and, for this reason, we present a guide to the main aspects that you must consider in order to prepare a complete business plan.
1. Executive Summary
In this section, you must establish the corporate identity of your company (mission, vision and values) and clearly explain what the objectives and strategy of your business are.
It is the first cover letter; therefore, it is very important that you define where you want to go with the product or service you offer. You can also include the organization chart of your company, its physical location, geographical scope and general functions of each employee.
The executive summary should be concise but, at the same time, have general information on all aspects of your business that will be explained in detail later in each section.
2. Description of products or services
Once you have defined the identity of your company and its reason for being, it is time to fully describe the products or services that you are going to offer. Remember to include the following information.
Needs that satisfy your products or services.
Description of the design, materials and functions of the product or service model.
3. Market research
When developing a business plan, you need to investigate the environment in which you want to sell your products or services. In this way, you and your potential investors will know how the market you want to enter works , its characteristics, opportunities and challenges. We suggest some important aspects that you can include in this section.
Situation of the place where you are going to undertake: Analyze social, political and economic factors that may positively or negatively affect your business and its profitability.
Competition: look at their price range, where they sell, how they are promoted and what their products or services are like to know their strengths and weaknesses and identify differentiating factors in your products or services.
Target audiences: Define the profile of your clients to know how to impact them. These are some data that you will need: geographic location, age range, needs, purchasing habits, means by which they receive information about similar products and services, hobbies, among others.
A business plan is a living document that must be updated annually to suit the needs of your organization. Regardless of the size or type of company you want to have, a well-structured plan is the roadmap to guide your SME towards profitability, to obtain investment if you need it or to grow it over time.
4. Marketing Strategy
The marketing strategy allows you to define how you are going to sell your product or service and the way in which you are going to approach and communicate with your consumers. When laying out a plan for your small or medium business, remember to include:
- Price: After researching the market and the competition, establish a price range that goes according to the production cost of your product or service and the value that your potential customers are willing to pay.
- Product: describe the characteristics or attributes that make your products or services different from those of your competition.
- Distribution: determine the channels through which you will sell the products or services of your business (stores, supermarkets, online, etc.).
- Promotion: describe how you want to communicate with your potential customers (TV, press, magazines, social networks, among others). Remember to generate content that adds value to your target audience.
5. Operational plan
The operating plan works as a specific map of all production processes, suppliers, logistics, tools, labor and raw materials necessary for the production of products or the efficient execution of the service you offer.
Normally, this plan lasts one year and then you will have to adjust it to new strategies, sales objectives and the financial capacity of your company. Remember to define productivity indicators and do continuous monitoring to identify possible deviations from the objectives.
6. Financial and contingency plan
This is one of the most important components of your business plan, since its real viability is defined here. Your potential investors will rely on the information you provide in this section to decide whether or not to bet on it.
A financial plan shows the projections of a business , taking into account previous market analysis, as well as the costs of manufacturing, distribution, marketing and retail prices.
We recommend that you include:
- Actual budget: add all the resources you need to start operations in your business.
- Cash flow: details the income and expenses of your company and demonstrates its liquidity.
- Statement of income: It should reflect the economic performance of your business. That is, the profits, losses and profitability in a specific period of time.