Which business to open? What do I want from my job? Do I need a business plan? – this is the set of questions that plagues the sleepless nights of future entrepreneurs. And if the first two of them can be answered only by you personally, then the third one is ready to give a confident and clear answer: of course, a business plan is needed!
But from what you need for it, the very format of the business plan will depend on, and, ultimately, the fate of your future business. For example, if you are opening a small and not too complicated enterprise like a self-service car wash or resale of goods, it will be enough to make a small table of income and expenses in Excel just to make sure that you do not go bankrupt. But with such a business plan, you will have to develop your own business solely at your own expense.
If you are planning a serious project that will require no less serious financial investments, you will have to enter into a game with investors. And, be sure, you will not have to play by your own rules.
The bad news is that all the serious companies and departments that can influence the financing of your business have invented their own rules and business planning standards. Well, the good news is that all these standards have long been known and it is quite realistic for them to “fit” their document. So, what are the basic standards of business planning and what do they suggest?
This standard was developed in the early 90s specifically for the CIS countries by the European Union. Such a standard is interesting primarily in that it takes into account the specifics of business in the countries of the commonwealth. In the most general form, the business plan for TACIS standards includes the following sections:
- Brief description of the document. What kind of product do you offer? In what market conditions? Who does the project team consist of? How will the funds be distributed?
- Business strategy.
- Marketing plan. Includes both conducting marketing analysis, and a description of the marketing strategy.
- Production strategy. In this section you need to tell us exactly how you will develop production, what infrastructure for this is presented in your chosen area, whether you have enough resources, how you plan to integrate your production, what equipment you will need and how much you will invest in its purchase.
- Business management system or organizational plan. This section will touch upon all personnel issues of the future enterprise: what specialists and in what quantity will you need, what competencies should they have, what will be the size of the labor compensation fund? Here it is worth talking about the management of the company.
- Financial plan. This section will consist mainly of tables with the calculation of the cost of production, as well as profits and losses. In addition, you need to attach a cash flow forecast, a balance sheet and data on the overall profitability of the business.
- Risk analysis. It is important to consider the most likely project risks, both technical and financial.
KPMG is an international network of companies focused on accounting, tax and advisory services. Of course, experts with a world-wide name could not help creating their own business plan. Here is what structure KPMG offers to its customers and partners:
- Summary. This includes data on services or products, a story about the mission of the company, as well as a brief overview of the entire business plan.
- Products and services. Here, information on what the company offers to the market, given in the first section, will have to be disclosed in more detail.
- Market analysis includes a story about the use of the product or service, competitor analysis, demographic analysis, and SWOT analysis.
- Target markets. On what consumers is your product calculated? How far in the geographical sense are you ready to go in selling your products? What will the price be composed of?
- Promotion strategy. Here you need to tell how you plan to promote your products and services to the market, what kind of advertising channels you want to use for this, and also to forecast sales.
- Management – a section in which you need to talk not only about the organization of work and personnel, but also about the costs of creating production and consumption of assets.
- The financial analysis. The information here will be similar to that offered by TACIS in a similar section, but it will also add enterprise risks and quantitative analysis.
UNIDO is an organization that the UN has created to combat poverty, including through supporting the business of developing countries. Business plans for the UNIDO standard are considered one of the most detailed – each section is divided into a lot of sub-items:
- Summary of the plan. This section provides concise information on the project as a whole: what it is, what it requires, what is the loan term, what are the guarantees of return, and so on.
- The essence of the project. Includes a story about the company’s products, its detailed description, information about consumers and sales markets, evaluation of competitors, as well as a story about the strengths and weaknesses of the business.
- Marketing-plan. Here you need to describe in detail not only the course of your marketing strategy, but also its goals and sources of funding.
- Production plan. The section describes the production process itself, tells about the necessary material basis for production, describes the production capacities and their availability, and also talks about the manufacturer.
- The organizational plan includes information on the management of the enterprise, staffing needs, distribution of responsibilities and a description of the external environment of the business.
- Financial plan. The content of this section as a whole is the same as TACIS and KPMG.
The EBRD Standard
The European Bank for Reconstruction and Development attracts a huge amount of funds from investors from around the world, and is itself a fairly large and well-known investor. Perhaps this is why the main emphasis in the business plans for the EBRD standard falls on the financial section.
- Memorandum of confidentiality. It starts with a very unusual document – with the requirements not to disclose its details.
- Project summary.
- Company. In this part, the author tells all about the company: what is its history and state at the time of writing the document, who runs the company and works in it, what the enterprise is doing at the moment, what are its financial affairs and loans.
- Project. It tells about the project under which investments are attracted: what it is, what investments it will require, how quickly it will be repulsed, in which market it will work. The section also contains information on the environmental assessment, the financial plan and the subtleties of the production process.
- Financing. Here you will have to talk more in detail about the risks of your company, guarantors and collaterals, works and equipment to which you are attracting funds, as well as lead a SWOT analysis and draw up a schedule for the receipt of funds on the loan and repayment of the debt.
It is worth noting that the business plan, compiled according to this standard, is rather short. But from the above structure it is clear that it is suitable for experienced entrepreneurs and operating companies.
Standard BFM Group
BFM Group is an investment company that also decided to introduce its standard for business plans. It is worth mentioning that at first it was created exclusively for use inside the company, but later it was adopted by entrepreneurs. The structure of the business plan for this standard is the most detailed and branched. In addition, it has several unique sections, among which:
- Matrix Boston Consulting Group – a story about the life cycle of products and the price scale of production.
- Analysis of the value chain.
- Detailed industry analysis, including SWOT analysis of the entire industry and PEST analysis.
Of course, this list does not exhaust all the diversity of business standards. Many organizations put forward their requirements for business plans for obtaining loans or subsidies. Before choosing which of these standards to write a document for, specify the requirements of your investor.