We create a business plan for investors

[Teacher]

Hag Hanukkah sameah, businessmen! You already know what this is, so I'll tell you more about my business plans.

• What sections are included in the business plan and how do I fill them out?
• Resume
• Company Description
• Market analysis
• Product or service
• Production plan
• Organizational plan
• Marketing and sales
• Financial plan
• Risk analysis
• What else is important to consider when creating a business plan
• The main thing about business plans

What sections are included in the business plan and how do I fill them out?
There are no uniform requirements for drawing up a business plan. Each company decides for itself which structure to use and which data to include.

But some large organizations develop standards that other companies use to make business plans. For example, UNIDO, the EBRD, KPMG, and TACIS have developed their own standards. They are used because it is convenient.

Russian companies most often make business plans according to the UNIDO standard. It provides for the following sections:

• Resume.
• Company description.
• Market analysis.
• Description of the product or service.
• Production plan.
• Organizational plan.
• Marketing and sales.
• Financial plan.
• Risk assessment.

Next, we will explain in detail how to fill out these sections.

Resume
The summary includes the most important theses of the business plan. Often this section is the only thing people read in the plan. They use it to decide whether to go deeper into the document or not to waste time. It is important to pay special attention to it.

The first paragraph of the resume should give a clear answer to the question of what the business is going to do. It should briefly describe the business idea and product, so that the reader does not search the text for what it is all about.

Your resume should also include answers to the following questions:

• What prompted us to start implementing this idea? The main reasons.
• What market do you plan to work in, and how big is it?
• Who is the target audience?
• What sales figures — in kind and in money-do you plan to achieve?
• How much money do you need to launch and how do you plan to spend it?
• What will be the main financial indicators of the project (NPV, IRR, profit, payback period)?

It is better to write a resume after all other sections of the business plan are ready. This makes it easier to highlight the most important things and back up the information with the right numbers and graphs.

Company Description
This section includes formal information about the company and aggregated performance indicators. Here's what must be included in the description:

• Company name.
• Business and legal form.
• Location.
• The history of the company — in what year it was opened, how it developed, the names of the owners.
• Brief description of the business model — what the company does, and how it makes money.
• Company goals and objectives — what is the company's global goal and what tasks will help it achieve?
• Financial indicators — data on the company's profit and profitability for the last three years.

If the company doesn't exist yet, this section still includes the business goal and objectives and a brief description of the business model. Financial indicators can be assumed.

Market analysis
Market analysis should show the readers of the plan the state of the industry and niche of your business. It is better to divide this section into two parts — analysis of the world market and analysis of the country's market.

Analysis of the global market. In this section, you need to include information about its size and dynamics, the largest participants, the main trends and key events.

The main purpose of this section is to show readers of the business plan that your project meets global trends and you have taken into account all the important factors. As a rule, if a project goes against global trends, it sooner or later goes bankrupt. Therefore, investors should be relieved of their concerns in advance.

Analysis of the country's market. This subsection is more practical. You need to include:

• Indicators of market dynamics — in physical and financial terms. Data on the Russian market can be found on the Rosstat website.
• Data on imports and exports are also available in money and physical indicators. You can get them in the customs statistics.
• Data about competitors ' financial activities — you can view them, for example, in the tax database.

It is necessary to study what is happening to the main market participants — whether their turnover is growing or falling. If they are growing, the result of the analysis may look like this: "As you can see, the turnover of all competitors is growing. So we'll be fine, too." If they fall, we can draw the following conclusion: "As you can see from the analysis, the main competitors are losing ground — this makes it easier for us to enter the market."

Market analysis in a business plan is not a scientific cross-section of the situation. Its main purpose is to explain why you think your business or project will be successful. Accordingly, you need to use all the facts that confirm this.

Product or service
This section describes in detail the product or service that the company offers. They also focus on unique competitive advantages, if any.

You should include answers to the following questions:

• What service the company provides or what product it sells.
• What are the advantages of a product or service from the point of view of customers — why customers will come to you?
• What is the product or service life cycle — what do you propose to do to extend their viability?
• What is the path of a product or service before finding a customer, and what do you offer to speed up this process?

In this section, you need to be as clear as possible about what you will sell. The reader should have a good understanding of what the company produces.

Production plan
A production plan describes the process of creating a product or service. In this section, you need to describe all the stages of production-starting with the purchase of materials and raw materials and ending with the delivery of finished products to the end user.

The structure of the production plan usually contains the following sections:

• Description of the production process, equipment and technologies used.
• The planned production schedule is not too detailed, but at the same time reflects all the main stages.
• Plan for purchasing materials and components.
• Personnel plan — its composition, number of employees, and requirements for them.
• Product quality control.
• Waste disposal method.
• Plan for logistics and delivery of finished products to customers.

It is best not to use specific terms that may not be clear to some readers of the plan. Write in your own words, as if you were telling your friends about it.

Organizational plan
This section describes the business creation plan. For example, who will do what in the company, how employees will interact with each other, which external experts to attract.

If the team doesn't already have anyone but, for example, two founders, then describe how they see the organizational structure in the future.

This section includes the following data:

• Organizational structure — the composition and hierarchy of the team, their responsibilities and area of responsibility. You need to specify which specialists will be needed, in what quantity, and name the fork of their salaries.
• The management team consists of key managers and their achievements — for example, education, unique experience and skills, achievements in other projects, work experience, and so on. It is important not to embellish the facts, but to convince the readers of the plan that these people will cope with the tasks of the company or project.
• External consultants — if you need them. You need to write down which experts you will contact and what questions you will ask.

It is better to use diagrams or diagrams to illustrate the team's functions and interactions in the organization plan.

Marketing and sales
This section describes how the business will attract customers and sell its product or service. It is important that it contains the following information:

• Target audience — gender, age, family status, income level, and so on.
• Channels and methods of attracting customers.
• Pricing strategy — how much a product or service costs, what the price depends on, when it can be raised, and by how much.
• Approximate sales plan.

Also in this section, you need to specify whether you plan to create a sales department. If so, write down how many managers you will need, how you will train and motivate them.

Financial plan
This section should reflect the economy of the company or project. For investors and banks, a financial plan is the second most important after a resume. Here's what it includes:

• Key financial indicators — sales volume, net profit, break-even point, profitability. You can calculate metrics for several scenarios of company or project development.
• Expenses — one-time, regular and periodic.
• Sources of financing — the amount of funds raised and the payment schedule.
• Cash flow Analysis — you can attach cash flow, P&L, and balance documents.

This section can be filled out based on the financial model of the company or project. A financial model is a table that lists the company's revenue, expenses, and profit indicators and shows the relationships between them. You can add it to the business plan appendices.

In this article, we talked in detail about financial planning in companies and how to create a cash flow, P&L, and balance sheet.

Risk analysis
This section describes the business ' action plan in crisis situations. It consists of two parts — standard and specific.

The analysis of standard risks is carried out using calculation methods — for example, they calculate and analyze the break-even of a project.

Specific risks are individual for different business lines. When analyzing them, it is important to describe:

• what are the obvious risks that may arise in the course of work?;
• what factors will they depend on;
• what ways the company will deal with them — it is better to provide several options at once in case something goes wrong.

This section reflects your business's strengths and weaknesses. Readers of the plan should see that you have everything under control in any scenario.

What else is important to consider when creating a business plan​

The quality of the business plan depends on the probability of success — for example, whether the investor will allocate money for the project or whether a major brand will agree to become a partner.

Here's what you should consider to make your business plan look more profitable:

• The business plan will be read by busy people who have a lot of other tasks. You need to make it as easy as possible for them to get information from the plan, otherwise in two minutes they will give up and go back to their business. For example, you can use design to focus on important parts of your business plan, or use graphs and diagrams to illustrate complex sections.
• The volume of the business plan should be about 20-30 pages-excluding applications with documents and calculations. If the business plan is less than 20 pages long, it will probably not be taken seriously. If it is a thick folio, most likely, readers will be put off by the amount of time they will have to spend on it.
• You don't need to include figures in your business plan that aren't supported by facts and calculations. Also, you should not embellish the business plan data — for example, financial indicators for previous periods or expected project results. If investors find out about this, it will be difficult to regain their trust.
• You don't need to write a business plan for a check mark and use ready-made options from the Internet. First, serious investors will definitely notice this and draw appropriate conclusions about the company. Secondly, any business is unique. It is unlikely that you will be able to build your own business according to someone else's business plan.

It is better to develop a business plan independently by the company or contact a consulting agency. The second option is suitable if the company does not yet have experience in drawing up plans. Our specialists will help you understand the structure and financial indicators, take into account all the nuances and draw up a business plan so that it can attract investment.

The main thing about business plans

• Business plan — a document that describes the goals and plans of the business, as well as ways to achieve them.
• Inside the company, business plans are used to capture the main tasks and develop development strategies. External users-investors, banks, and partners-decide whether to cooperate with the company or not based on the business plan.
• The business plan for external users should include the following sections: company description, market analysis, product or service description, production plan, organizational plan, marketing and sales, financial plan, risk analysis, and summary.
• A resume is written after all other sections are compiled, but it is placed at the very beginning of the plan. In it, you need to write the main theses of the business plan, so that readers at the very beginning understand what the idea of the business or project is and why they should cooperate with you.
• All figures and data in the business plan must be supported by facts and calculations.