O business plan is a management tool that acts as a guide to plan an enterprise, a marketing action or the expansion of a business unit. It helps map the objectives and steps to be taken to achieve them, reducing uncertainties and increasing the viability of planning.
Read in this article:
- 1 Step: Defining the Business Model
- Step 2: Writing the Business Plan
- Step 3: Analyzing the Market
- 4 Step: The Marketing Plan
- 5 Step: Showing Expectations
With him in hand the entrepreneur can better understand the reality in which it is inserted, in order to be able to determine which strategies will be adopted at different times, especially for planning future actions.
Some people believe that the business plan has died, but in fact he modernized by gaining more practical outlines. At least in the opinion of the LUZ team.
This change accompanied the evolution of the market as a whole. In the past, investors preferred to invest in meticulous, flawless plans. Nowadays, the best business plans are rapid test evolutions that have shown good results predictions.
More concepts related to business plans:
How to make the executive summary of a business plan
How to Make a Marketing Plan for a Business Plan
How to make the financial plan of a business plan
How to leave your business plan ready
Before writing your business plan, you need to be sure of the model you are betting on. It is no use doing a big and detailed planning betting on a business strategy that can go wrong.
Before writing your plan, you should draw some Business model. After that, you should test them in the best, cheapest, and fastest way possible.
Many entrepreneurs have difficulty understanding the difference between a business plan and a business model. For many the two documents may mean the same thing, however, they are fundamentally different.
The Business Template Canvas
The business model is a very objective document that aims to understand the analysis and reflections on the concept of the company, evaluating the feasibility of the idea.
The business plan is a more extensive document, detailing the existing enterprise or that is being constructed. The goal is for a person outside the organization, as an investor, to understand 100% through their reading.
In the old days, you went straight to the business plan. Today, there is the understanding that one should start fast and lean. Some entrepreneurs believe that only with the business template canvas already planned enough.
I believe both tools should be used within the design of a business at different stages. When you have nothing, make yourself a canvas and test it quickly. From the first test results, use a business plan (business plan) to structure growth and find investors.
Types of Business Model
Freemium Model - The Freemium Model works by offering a free digital product or service as a way to attract a high volume of users, but with the goal of converting them into paying users through a premium option with more features.
Long Tail Model - The Long Tail Model works by selling a wide variety of niche products, which individually sell little but in total generate high sales value.
Marketplace Marketplace - The Marketplace Model works by providing products from multiple vendors in a single virtual environment. Usually in a large e-commerce, which may or may not sell its own products, but that above all has a high volume of users who frequent and trust their brand.
All You Can Eat Model - The All You Can Eat (AYCE) Model, which in English means "All You Can Eat" (or Buffet-Livre), is a business model that works by allowing customers to consume products or services as long as they want fixed amount (single or recurring payment).
Often, the business model you choose for your venture may go wrong. Sometimes, you choose the freemium template, charging for signatures, and your user sees no value in the monthly contract. He preferred to pay single or vice versa.
So before you plan an entire business around a business model, the best thing to do right now is to test it.
At this stage, you should think "how do I validate my business model with what I have at hand tomorrow?"
The MVP - Minimum Viable Product
But what would validate a business idea? In my opinion and that of many experts, is to realize the first sales to complete strangers without investing almost nothing in product, point of sale or technology.
Some customers have already spoken to LUZ:
I want to set up an ecommerce to sell fashion clothes for pets
Have you sold any fashionable pet clothes in your life?
If not, why invest a significant amount to set up an ecommerce to sell something you are not sure if you know how to sell and, the main one, if people want it?
Make some clothes or buy them and try to sell. When you have the first orders, you put together a more detailed business plan.
That's what an MVP is about, getting the answers you need before investing time and money, as quickly as possible.
Now that you have eliminated the first uncertainties and have a viable business model, you can invest time in writing your business plan, business venture or restructuring.
O executive summary is a short summary of your business plan (about one page). Usually it's the last section of the plan you're going to do, because you'll need all the data for that. Here it appears first, as I am considering the order in which the sections should be presented.
To think about the executive summary, you must understand the head of future readers of your business plan (potential investors, partners, partners). They do not have time, so what will make them read the whole plan will be the quality of the indicators shown in the executive summary.
Focus on the victories achieved so far and the market opportunities. The results of your MVP will be most welcome in this section of the business plan.
If you have managed to win your audience with the executive summary, they will want to see more! And the first thing we have to show is how the company is today and how far it has gone.
The first step and one of the most sensitive, especially for investors, is knowing who will manage the money applied by him. They will be interested, at least in knowing which is the highest level of managers of the new company. Emphasize the good attributes of the team.
Another interesting thing to show in the business plan is that the team being presented has already achieved goals together, or individually.
Show in your business plan that your business or business idea has intrinsic characteristics and long-term vision that make it unique.
Mission, vision and values
The goal here is not to set up a strategic planning complete, but rather, show that you are grounded in a strategic vision greater than "bill more and make a profit." An investor would not bet on you knowing that your company equals an existing competitor.
If you want to better understand what they are mission, vision and values, you need to read this post on strategic planning!
Current company structure
The image that best defines the current structure of the company is the chart. It serves to show how the company is organized today. In the case of a business idea, the projected organization chart can be shown after the investment application.
It is quite common to show in the business plan the expected evolution of the organization chart in phases or years.
Now that we've talked a lot about the inside and the current stage of the company, it's time to dissect the business opportunity that's on the table. The first factor to be explored is the market, that is, external conditions that show why the enterprise can work.
Every business is born or grows because of a problem to be solved in the world. It may be small or specific such as:
A small town is not supplied by bakeries - so a neighborhood bakery is born
Or large and generic, such as:
People want to socialize and connect on the internet - this is how Facebook is born
Your business plan should show that there is something to be improved in the world, in your country, or in your region. And this "something" tends to accentuate. Put it in your document.
Investors, potential partners and even you, the author of the business plan, should not be satisfied with generic data. It's needed turns them into numbers. Only the market size numbers can tell if the plan has economic viability.
The first step in quantifying the market is setting the target. What are the key customer profiles (personas) what does the company look for? After you split and define the profiles, try quantifying them from the data.
Some data is difficult to obtain, but it is always possible to make estimates. If your persona is the director of an average company, try to map how many average companies there are in your region and later in Brazil.
Internet news, databases and associations can help you estimate the number of people in your market.
The size of the market
Okay. The market is big, but are these people already investing in what you're selling? A prospective investor will want to know this and you need to anticipate.
If the 50 million entrepreneurs in Brazil invest an average of R $ 100 in free education per month, entrepreneurial education is a market that drives 60 billion reais per year.
I have set the example of a giant and quite generic market. In your business plan, it is interesting that you have enough of it to get more real data.
- What types of business will you focus on?
- In which regions?
- What stage of entrepreneurship?
For each type of business, there are questions to be answered in terms of market quantification. The important thing is to have a sense of size and the market share that you intend to achieve at each stage of the growth plan.
To analyze the competition, in addition to quantitative data, such as number of direct and indirect competitors, I usually analyze them qualitatively.
The objective is to show in their business plan their main weaknesses. This is usually the reason for a problem to be solved by my business idea. Netflix, for example, was born of the inability of traditional industry to provide customer convenience.
The best tool to do this is to value curve. It consists of mapping the most valued points by customers (service, price, etc.) and then evaluating your company and competitors on the same criteria.
After showing the current stage of the company, the opportunity that is on the table and the different personas that compose the public, it is time to show how you are looking for them.
When we talk about product here, we are talking about the product concept. That is, it is not the palpable aspect of the product that you can hold, but rather the intangible aspect related to the solution that is being proposed.
Introducing the product
What are the differentials of your product? It is worth rescuing what you have mapped out in the analysis of the competition to reinforce the presentation of your solution.
Over time, your solution can evolve in several aspects: functionalities, points of sale, services added, etc. It is interesting that you show in your business plan the different phases of your product and what will be incorporated into it.
The evolution of a technological product could be presented in a very similar way, only replacing the items with new functionalities or integrations.
O marketing plan for a business plan can be formal and theoretical, following the concepts of 4 P's marketing or you can follow a more objective line. This line would show only one media plan, that is, the channels that will be used to present solutions to different people.
If your price is very competitive, it is also interesting that you explain the assumptions that led you to take that pricing. Today, marketing, especially online, is much more linked to testing and user experience than rigid beliefs based on theories.
Do not forget to show a projection of marketing investment in the different channels over time.
The last part of the business plan is convincing that the same is ambitious enough and that it is worth it. I like to show the long term goals and then how to financial plan will behave in the pursuit of these goals (investments, spending, revenues).
Many entrepreneurs often show the loose financial plan, with many numbers and little meaning. The financial part must be oriented to the goals that the organization will seek in the coming years.
How many customers? How many subscribers? What team do you need to serve these customers? And the cost of marketing?
The entire financial plan will depend on the company's primary goals. Present the timeline in numbers that the company will follow according to the business plan.
The financial plan of a business plan is to present the main financial indicators and the economic feasibility study of the project.
See also: how to do an economic feasibility study
The common mistake in the financial plan is to present a giant table with numbers that say nothing. The key to not falling into this error is to separate the data. Some examples follow below.
Table with summary of financial projections:
Indicators of economic viability:
Business Plan Ready Presentation
All images used in this article were made using our investor presentation. It can be quite useful as a visual tool for presenting the business plan!
To cite this article as a bibliographic reference
Filippo Ghermandi, Business Plan: step by step to create your own. Available in: https://blog.luz.vc/como-fazer/plano-de-negocios. Access in: (day, month and year)