Why should you make a business plan?
Just like building a house without an architect's drawing, starting a business without a business plan is an equally bad idea. One good way of thinking about writing a business plan, is to imagine it is being written for somebody else to read. Consequently, this plan should be so descriptive, that the person should be able to successfylly run your business on the basis of you plan.
A business plan is similar to a manual for your business. With the help of a plan, you will also gain most from the services of Uusyrityskeskus. Only through a proper plan, business advisors can evaluate the coherence of your business idea, its profitability, and realism.
- You'll prepare a goal to yourself
- Our startup guiders will be able to find relevant points in your business which have to considered
- Applying for finnish startup grant can require a business plan
- You'll be able to calculate a more realistic budget
- You can gain better loans with a well prepared business plan
> Start making your business plan!
A business plan is for Your success
You will need to carefully analyse actions you wish to take in your business activities, and actions you would rather avoid. An example is marketing your products to the wrong customer group or offering your services to an unreliable and poorly paying customer.
Profitability also means, that it is not always worthwhile to direct sales towards a too large of a customer, if your resources are all spent on the sales process. Or, if there is a risk that the order may be so large, that it cannot be delivered.
The same logic applies to small customers. Even if the product generates a good margin, the customer cannot purchase enough volyme for you to reach a profitable total. Use the example structure of the business plan to aid you in planning. It is one example structure of a plan. You may add questions and answers if necessary.
Exploitation in the future
A business plan should be refocused, and updated at least once every six months. This way, the entrepreneur retains a clear vision of the key elements of the business.
Changes are inevitable during the course of time. With the help of a clear plan, the entrepreneur can better respond to the changing needs of the markets.
Drafting a business plan
In the beginning, you should obtain enough information about relevant matters related to your business idea.
Make headings, under which you gather and dissemble your ideas, using bullet points. Use the questions to assist you write down your ideas on paper. Do not focus on spelling or correct phrasing at this point.
Remove the guiding questions and advice fields from the text at this point. Modify and fill in the text so that it is coherent, and explanatory even without the questions.
Focus on the structure and flow of the text, spelling, and grammar towards the end of the writing process. Do not attempt to write a perfect, final text at the very beginning, but ameloriate it towards the end.
Calculations of capital requirements and sources of financing
The calculations of capital requirements and sources of financing helps you determine the necessary costs and investments prior to initiating your business activities. It also generates a view of the required investments for the beginning stage.
In its most simple form, the capital requirement section describes, what acquisitions need to be made in the very first phase, so that company activities can start. IAlso the early period of activities, when sales are not sufficient to cover the costs which exist regardless, is described in the capital requirement section. Such costs include phone bills, salaries, rents, and the entrepreneur's income.
At the other side of the calculation, the capital sources are listed. These sources cover the needs of capital. A bank will use this calculation, for example, to determine how much loan funding you are applying for, and also how much additional funding is required or present. The calculation also illustrates the entrepreneur's monetary investments, and the value of existing tools and machinery (so called in kind property). The calculation helps balance, plan and estimate in euros the financial risks and needs involved with starting the business.
"The calculations help you to gain an understanding of the costs involved in your plan, and estimate your sales' break-even point"
Calculation of profitability
A profitability calculation helps visualise, what the sales target is for the company. This calculation can then be compared with a separate sales budget, which breaks down how much sales needs to be generated from each customer group. The profitability calculation does include the projection of sales, and for this reason it is simple to calculate. The profitability calculation examines the costs, which the business activities incur, regardless of sales. These costs are simply listed row by row, and finally added up. Next, the amount of time, that needs to be spent for running the business operations is allocated: for a boutique they are restricted by opening hours, for other businesses the entrepreneur decides the necessary work hours per week, per month and so forth.
The resulting calculation shows, how much sales needs to be generated with a given quantity of time and a given price level, in order to reach profitability. This figure can be compared with the sales forecast, or your estimation of how much sales volyme can be generated.
You can download a simple excel format spreadsheet, on the homepages of Uusyrityskeskus. The spreadsheet includes the necessary formulas for the calculations.
Calculations
Financing
Calculations of capital requirements and sources of financing.
You can assess your needs of financing, and define your capital sources with the help of this spreadsheet.
Profitability
Calculations of profitability
You can evaluate the profitability of your business activities with the help of the spreadsheet, and gain a concrete understanding of the related costs and necessary level of sales invoicing to cover the costs. You may assess how realistic and attainable your goals are with the help of the calculations.
Sales
Calculations of projected sales
You can plan how the necessary sales can be generated, with the help of this spreadsheet. You can identify your customers or customer groups, as well as the targeted products or product groups. Use unit prices for the products, or alternatively a mean price, while estimating sales volymes for each target group.
