Whether you are an entrepreneur or aspire to establish your business, or work within a large corporate team, you must know that you need a professional business plan that enables you to enter the market strongly, enhance the growth of your business in it, and create a competitive advantage for you.
Any successful project at the beginning is an idea that a professional business plan is drawn up for that helps turn it into a reality.
The business plan helps you in a comprehensive understanding of all the financial, material and moral aspects, and enables you to launch the project with less risk, greater effectiveness, and the use of less resources.
In this article, we will discuss in detail what a business plan is, what are its components, and how to write a professional business plan template.
What is the action plan?
The Business Plan is a roadmap for what companies will do in the coming period to reach their goals. It represents a tool for guidance and leadership for anyone who wants to establish his business or start launching a new product or project in his company.
It clarifies all aspects surrounding companies, whether internally or externally, and also states the following :
- The idea of the project and its objectives to be achieved.
- Strategies used to access.
- The time period covered by the plan.
- The economic situation in the market.
- The extent of the need for funding and its sources.
- Expected strengths, weaknesses, opportunities and threats.
- Description of the product or service and its idea.
The Business Plan is an integral part of the work itself, and it is not a ready-made document or form to be filled out only, but it is a serious activity that must focus efforts towards it, and work on it effectively.
Why do we need a business plan before starting projects?
Have you ever asked yourself why projects and companies need a business plan?
As we mentioned before, it is more like a road map that guides you towards your goals, as it will enable you to deal with the opportunities and obstacles that will meet you throughout your journey in achieving these goals.
The answer to this question is not limited to that, there are many reasons why companies always need to write a business plan template for their projects, such as :
A) The action plan, through which the structure, aspirations and perceptions of the business, and the desired goals are clarified, and through which the available ideas and mechanisms for their implementation are also clarified, and the actions that will be taken and help in development and improvement.
b) includes all details of the products and services to be provided by the project, their pricing and supply plans, and the marketing and sales strategies used.
C) The business plan is a prerequisite for obtaining financing and loans for projects from banks, because project owners need detailed information about the project and its feasibility.
D) The business plan is a major reason for increasing investments. The successful plan attracts investors to buy its projects, invest their money in the company or buy part of its shares, and increases its chances of getting investors who add value to its projects, or merge into major entities.
e) All financial statements related to the business are available in it, including capital, assets, liabilities, financial needs and funding sources.
f) It is the work guide that you and those in charge of the project can refer to, as it shows the steps to be taken in moving towards the goal, and performance measurement criteria.
j) The business plan helps to launch projects with less risk and a greater return on investment, because it provides a detailed explanation about the funds, the resources needed for production, how to provide them and put the products on the market.
This importance comes from the integration and interaction of some of the basic elements and components of this plan.
Action Plan Elements
The action plan consists of several basic elements, namely :
The first element: the executive summary
It is an overview of the plan as a whole, the reason for creating the plan, and provides a summary of the products and services offered, the objectives, and an overview of the market, the resources and financing required, and the competitive advantages of the brand or product.
The purpose of preparing the executive summary is to capture the interest of the people involved, and to give them a snapshot of the content of the plan.
The second element: company description
The second element of the plan components is the description of the company. Determine whether the company is a sole proprietorship, investment or partnership. This element highlights some details, such as :
- The company’s industry type, vision and objectives.
- The products and services you provide and describe them in a simple way.
- Target customers, their personalities, and strategies to reach them.
- The financial and legal status of the company.
- The company’s management structure.
That includes all information about the company’s name, address and data about the chief executives.
The purpose of describing the company in the plan is to provide an overview of the company, valuable information about it and to illustrate its realistic situation.
The third element: description of the work environment
It is intended to analyze the work environment or the company and the existing industry, through two axes :
The first: the commercial market to which it belongs
The commercial market is analyzed, its size, the growth rate of the companies inside it, and the extent to which it can accommodate new companies, new products or services.
In addition to studying the types of variables that occur to it, the opportunities and threats available to it, and its needs.
Determining the nature of its consumers, their demographic features and lifestyle, and who are the customers of that market, whether companies, individuals or government institutions.
You must also identify social changes and technological factors in it, and you must take into account the legal and political factors in this market so that you are not surprised by barriers and obstacles that prevent you from entering the market.
Two: competitor analysis
In this axis, competitors in the market who offer the same or similar products to you will be analyzed, their strengths, weaknesses, market share, marketing strategies, and the threat posed to you by these competitors will be determined through market research .
In the end, the purpose of your good understanding and analysis of the market and competitors makes you able to create a product in line with the needs of customers and consumers, benefit from competitors’ experiences and avoid the weaknesses and threats they have experienced.
Fourth element: Description of products and services
In this item the company’s products are explained, their description and use, volume of production, cost of production, profits and expected sales, how the product or service works and their pricing are explained.
Fifth Element: Operations Plan (Operation)
Operations plan is a series of activities at the end of which we have outputs, which is the product or service, and it includes :
- All the details of how the work is going and who is in charge of it.
- The objectives to be achieved.
- Strategies used in the sales and marketing processes established.
- The marketing mix, which consists of:
- Price: Different pricing strategies for a product.
- Producer: The one that solves your customer’s problem.
- Promotion: The marketing channels you use to market and communicate your message to an audience.
- Place: The place where marketing and sales take place.
- Factors affecting the marketing and sale of products
And through the sales plan, the break-even point is also clarified, which is the number of sales to be sold to achieve revenue equal to the cost of production.
That is, the minimum sales to be achieved to ensure a profit, which one is sold after the established break-even point, after which profits are made.
And take great care to make the operations plan a dynamic plan that highlights all the company’s steps towards achieving its goals.
Sixth Element: Financial Forecasts (Financial Plan)
The financial forecast element is one of the most important elements or parts of the work plan that shows the financial requirements of the project, such as:
Available assets and liabilities, costs incurred from production, supply and other costs, development expenditures, projected expenses, expected profit margin, revenues, available funding sources and cash flows.
In addition to the turnover of capital and liabilities, all of this can be clarified by placing the initial budget for the project in the plan.
The seventh element: the work team
The plan template should show the work-based team and the tasks of each team member, founders, and managers.
Clarify whether external labor or Freelancer will be used to perform some tasks, what tasks they perform, and what needs and skills your team needs, in addition to:
- The company’s operating hours.
- The number of employees and their expected salaries.
- Expected rewards and incentives.
Eighth element: attachments
This part includes all documents and additional information supporting the plan such as partnership and lease contracts, permits, commercial records, bank accounts, and all forms and documents that support your position.
The ability to understand these elements and their contents and the relationship between them helps you in creating an effective and distinct plan model and helps to achieve an idea effectively and with superiority.
How to write a sample business plan step by step
At the outset, some important points should be clarified about the plan, namely :
It is common knowledge that not all companies and brands are alike in preparing a business plan template, and that the template is not the same in its components.
Every business has its requirements, so the model and components differ from one company to another. Some companies, for example, integrate the marketing and sales plan into the operations plan, and some make them a separate component.
It is worth noting that some companies prepare the plan template manually, according to the needs of the components of the plan that they prepare, and others use ready-made forms or programs that help companies write them.
Also, the time period for each plan varies according to the duration of the project, some need to prepare a work plan for 6 months, others for a year, and the time period it covers may extend for 5 years, during which it explains all the operations and goals that it seeks, as it is a specific period.
The business plan also has a key role in the establishment and success of any business, so this plan must receive deep attention from the business team during its preparation.
Add to your information that the development of the plan requires effort from the team as a whole, not an individual or person who is responsible for it.
After you have enough information about what the plan is, its importance to the projects, and the elements it consists of, you are able to easily prepare it.
All you need now is:
1. Writing the Executive Summary: Start by writing the summary and briefly explain all the details and objectives.
2. Describe the company and work: Try to describe your work environment in a distinctive way in order to increase the chances of your company’s success in being an attractive place for investment and the goals you seek.
3. Describe your products and services in detail: their characteristics, target audience, materials you need for their production, pricing plans and market launch strategy.
4. Analyze the markets and competitors: In this part, think and answer some of the following questions:
- What is the number of competitors, the size of their entity, and the degree of their closeness?
- What are their strengths and weaknesses?
- What is their expected reaction to your entry as a competitor?
- What are the chances of other competitors entering the market?
Full knowledge of these answers will initially determine your strategic position in the market.
5. Plan the operations: to be implemented during the time period and clarify the details of the marketing and sales plan.
In addition, develop scenarios that answer the following questions:
- What if the prices of raw materials went up?
- What if the machines break down in the factory?
- Did the company leave one of its managers?
- Fees and prices of energy materials increased?
- Occurrence of problems in neighboring countries?
- Lack of production resources, no suppliers?
The answer gives solutions to the expected crises, develops plans and strategies to deal with and manage them, and there is no element of surprise during the implementation of the operations plan.
6. Develop financial analyzes: Clarify all the information about the financial amounts represented in the capital, costs, revenues, the required funding volume and its source.
Answer these questions:
- When should the raw materials be purchased and their cost?
- How much time do you need to attract clients?
- What is the cost of attracting and retaining customers (marketing cost)?
- The amount of financial investment to buy assets?
The purpose of the financial analysis of the project, is to know its financial feasibility and financial needs, and to know the flows it needs for expansion.
Note: The person responsible for preparing this part of the plan is the financial manager in cooperation with the heads of departments .
7. The work team: In this part, you must explain the skills that your work needs, and that the work team must possess (in terms of personal and technical skills), and the roles are distributed to each member of the team and identify the people responsible for each task.
8. Attach the required accessories: which you need when presenting the plan to the concerned persons and which will support your financial and moral situation.
9. Use ready-made templates and forms: Check them well, spelling and financially, more than once before submitting them.
Some tips that will help you prepare a professional business plan
- The plan must be realistic, workable and not based on unexamined assumptions and expectations.
- It should be clear and uncomplicated so that it is easy to understand.
- The product or service of the plan must have unique features and specifications in order to help it be launched in the market.
- It should be tested and all its details discussed before working on it by the relevant experts.
- Before starting, you must make sure that you have all the financial, production and functional information that you need to prepare it.
- Making an initial draft before you start presenting it to the concerned authorities helps you in writing any urgent changes and developments on the project.
- Make sure to prepare a professional-looking plan that initially includes an introduction and a table of internal contents, after the executive summary page. This table contains the plan’s parts and page numbers, and is on the cover with the facility’s name, address, and year of incorporation.
- Try not to exceed the 30-page plan, and focus in writing it on the quality and feasibility of the information, not the quantity.
- Avoid spelling errors, review financial numbers accurately, be accurate and concise in information with clarity and credibility in all parts of the business plan.
- You can use tools like Canva to help you prepare your business plan.
A business plan template is essential to the growth of companies, as it gives you an illustrated view of the situation of your company or project in the future from several angles, whether financial, marketing, and others.
It also shows you where you are now, and where you will be after a certain period of time, what is the purpose of this journey and the ways you take to reach your goal, and represents an expanded picture and a future vision for your project.
In this article, we have provided you with everything you need to know in order to write your own business plan. We hope that you liked the article and welcome any inquiry or question that you put in the comments box below.