Before launching a new business, careful planning is essential. One of the pillars of this process is the business plan, a document that describes in detail how the new service or product will work. This is an essential tool to get the business up and running without any negative surprises. Aaron Rodriguez, a seasoned expert in implementing business plans, explains the true importance of starting a venture on the right foot through certain necessary business plans and strategies.
It is never a good idea to be lax in developing a business plan. Invest the necessary time and effort, and do not neglect any item. Otherwise, you will suffer consequences later on, with unforeseen events when it comes to implementing the project. In general, the final document is usually 30 to 40 pages, on average.
It is also important to keep an open mind to changes and revisions. During the development of the business plan, the entrepreneur may feel the need to review the concept, idea, or opportunity. “The business plan is not a whim; rather it is a huge necessity whenever you plan to start a venture and often goes beyond convenience,” Rodriguez says. “When the entrepreneur intends to join an incubator or get help from investors or funding institutions, the document is a necessity.”
The reason is obvious. No one will invest in or give opportunities to a project that does not prove viable. Since, in these cases, the importance of the plan is even greater, one option is to hire a junior consultant from a university who can guide you on the right path when it comes to creating such a document. Being able to get advice to take the first steps has never been superfluous. On the contrary, when forming the basis of a company is of utmost importance to start on the right foot to then not have to run into a lot of problems.
The plan will estimate the total investment for the implementation of the company. “The first thing to do in the business plan is to establish the activity of your company. Detail the branch of activity, establish the mission and make a summary of the main points of the plan, as an introduction. Here you should also establish the tax regime, the legal form, and the capital stock of the new company,” Rodriguez explains.
Market analysis is a concept that should always be considered during these early stages. It is the first study that will serve to analyze the viability of the endeavor. Conduct in-depth and meticulous research on the market segment you plan on entering. It is imperative that you know who the competition will be, strengths and weaknesses of others in the market and the profile of customers in quantitative and qualitative analysis. In this item, you should ask yourself the following question; “Why will customers choose my product and not another?” Start thinking about your competitive differences and why the answer would be in your favor.
Once the product offered and the customer profile has been defined, the next step is to define how the service will be marketed. Establish prices, product presentation, a form of distribution, promotional strategies, and also brand communication along with the target.
Once the above points have been established, it is time to think about what you will need to get the business up and running. Start with the organizational structure, designing the necessary human resources and their hierarchical distribution (the company’s organization chart). Think about the qualifications required for each professional, the remuneration, is and the infrastructure and location of the work environment.
“Focus on the financial plan, since it is considered the most relevant aspect when creating a business plan.” Rodriguez asserts. This is because it will estimate, taking into account the requirements detailed in the previous items, the total investment for the implementation of the company. It should also include estimates of fixed costs, the need for working capital, and a forecast of turnover. Be careful: making a mistake in these accounts can cause serious damage.
Finally, simulate different scenarios: realistic, pessimistic, and optimistic. Imagine possible difficulties and foresee solutions for hypothetical crises. This will enable you to be better prepared in the future in case some of these scenarios occur out of the blue.