Business Insights

Business plan in simple terms

If you've ever thought about starting your own business, you've likely heard of a business plan. But what is it, and why do you need one?

A business plan is your step-by-step guide that helps you understand where you're heading and how to achieve your goals.

A business plan can take various forms: a table with key sections, a presentation for clarity, or a Canvas business model that visually reflects the main elements of your business.

Start creating your business plan with us – step by step, without unnecessary complexity, and with a clear understanding of each stage!

FlagMAN-D provides consultations to help develop your business. We are ready to assist you at every stage to make your project successful.

Why do you need a business plan?

A business plan is essential for understanding your business goals, developing an action strategy, and attracting external resources.

Here are the main tasks a business plan helps you solve:

Understanding of what you want to achieve. A business plan helps you formulate specific goals, such as increasing sales by 15%, expanding into two new markets, or launching a new product to capture 10% of the market share.

Planning your steps. Define specific tasks such as finding suppliers, renting a space, or hiring employees. Estimate how much time and resources each stage will require and allocate them based on priorities. This will help you avoid missing important details and act consistently.

Attracting investments. If you need money from investors or a loan from a bank, a business plan will help demonstrate that your project makes sense and has a chance of success.

What a business plan consists of: 5 key sections

A business plan consists of several key parts, each of which addresses a specific stage of business development or a critical business function. Let’s break down each of them simply and clearly:

Business description. Here, you describe your business: what you do, what you sell, and who your target audience is. This description helps you and your future partners understand what you aim to offer the market.
Market analysis. In this section, analyze customer needs, consider current trends, identify key consumer segments, and highlight your competitive advantages. This will help you understand how viable your idea is and how you will stand out in the market.
Marketing and promotion. This section outlines how you plan to attract customers. Will you use social media, online advertising, or special offers? It’s important to think ahead about how people will learn about you and why they will choose you.
Operational plan. This describes all the operational and production processes necessary to launch and run the business successfully. This includes finding and renting a space, purchasing equipment and raw materials, organizing production lines, coordinating with suppliers, hiring and training staff, and ensuring quality control. The operational plan also sets deadlines for each task and assigns responsible individuals to ensure the smooth operation of all departments.
Financial plan. Here, detail all the financial aspects of your business: how much money is needed for the launch and day-to-day operations, projected income, key expenses, as well as the break-even point and payback period. The financial plan helps evaluate the realism of your expectations and determine when you can expect profitability.

How to create a business plan in 4 steps: questions that will help avoid mistakes

You don’t need to be a finance or marketing expert to create a business plan. The main thing is to start with simple questions:

What do I want to do? Describe your idea, what product or service you want to offer.

Who will I sell to? Think about who your customers will be and why they need your product or service.

How will I sell it? Decide which customer acquisition channels you will use, how you will promote your product, and which methods will be most effective for your target audience.

How much will it cost? Estimate how much money you need to start and what your ongoing expenses will be.

Before creating a business plan, make sure your idea has profit potential. → We explained how to choose a niche in a highly competitive market through market analysis, a unique value proposition (UVP), and audience focus.

Business plan example for a café: how to calculate payback period?

Let's look at an example of a simple business plan for a small café:

Business description:
A small café with a cozy atmosphere offering fresh pastries and quality coffee. The main target audience includes local residents and office workers.

Market analysis:
The area already has several cafés, but they don’t offer fresh pastries. This café will stand out with its product assortment – quality coffee and fresh pastries unavailable at nearby cafés.

Marketing:
Promotion through social media, a photo zone, and a coffee subscription for regular customers. This innovative approach will also increase sales volume.

Operational plan:
Rent a space, purchase equipment, and hire two baristas and two bakers.

Financial plan:
Initial expenses — 300,000 MDL (rent, renovation, equipment, raw materials).
Monthly cash flow: 80,000 MDL (revenue) − 60,000 MDL (expenses) = 20,000 MDL net profit.
Break-even point: 300,000 MDL / 20,000 MDL per month = 15 months — the payback period of the initial investment.

A business plan – your path to success

A business plan is your guide to managing your business. It helps you see the big picture, set realistic goals, and understand how to achieve them. Don’t be afraid to start with something simple: even a basic plan will help you identify areas of focus and avoid missing important details.

If you need consulting on business development, we are always ready to offer our professional services.

FlagMAN-D

2024-11-27 18:00