1. How to write a good business plan
The final result of those business plans that neither provide investors with sufficient information nor excite investors can only be Thrown into the trash. In order to ensure that the business plan can "hit the target", entrepreneurs should do the following:
1. Focus on products
In the business plan, all details related to the company's products or services should be provided, including all surveys conducted by the company. These questions include: What stage of development is the product at? How unique is it? What is the company's method for distributing its products? Who will use your company’s products and why? How much does the product cost to produce and how much does it sell for? What is the company's plan to develop new modern products? Attract investors to the company's products or services, so that the investors will be as interested in the product as the entrepreneurs. In the business plan, entrepreneurs should try to use simple words to describe everything - the definitions of goods and their attributes are very clear to entrepreneurs, but others may not necessarily know their meaning. The purpose of formulating a business plan is not only to make the funders believe that the company's products will have a revolutionary impact in the world, but also to make them believe that the company has arguments to prove it. The description of the product in the business plan should make the funder feel: "Oh, how wonderful and encouraging this product is!"
2. Dare to compete
In the business plan, entrepreneurs should carefully analyze the situation of competitors. Who are the competitors? How do their products work? What are the similarities and differences between competitors' products and our company's products? What marketing strategies are used by competitors? It is necessary to clarify the sales, gross profit, revenue and market share of each competitor, and then discuss the competitive advantages of the company relative to each competitor. It is necessary to show investors that the reasons why customers prefer the company are: The company's products are of good quality, fast delivery, moderate positioning, suitable price, etc. The business plan should convince readers that the company is not only a strong competitor in the industry, but also a leader in setting industry standards in the future. . In the business plan, entrepreneurs should also clarify the risks that competitors bring to the company and the countermeasures taken by the company.
3． Understand the market
The business plan should provide investors with an in-depth analysis and understanding of the company's target market. It is necessary to carefully analyze the impact of economic, geographical, occupational, psychological and other factors on consumers' choice to purchase the company's products, as well as the role of each factor. The business plan should also include a major marketing plan, which should list the areas where the company intends to carry out advertising, promotion and public relations activities, and clarify the budget and income of each activity. The business plan should also briefly describe the company's sales strategy: Will the company use outside sales representatives or internal staff? Does the business use resellers, distributors or franchisors? What type of sales training will the company provide? In addition, the business plan should also pay special attention to the details of sales.
4. State a course of action
The company's action plan should be unassailable. The following questions should be clarified in the business plan: How will the company bring its products to market? How to design a production line and how to assemble products? What raw materials does the company need for production? What production resources does the enterprise have, and what other production resources does it need? How much does production and equipment cost? Should companies buy equipment or rent equipment? Explain the fixed and variable costs associated with product assembly, storage, and dispatch.
5． Showcase your management team
The key factor in turning an idea into a successful venture is to have a strong management team. The members of this team must have high professional and technical knowledge, management skills and many years of work experience. They must give investors the feeling: "Look, who is in this team! If this company is a football team , they will always reach the World Cup finals!" The function of a manager is to plan, organize, control and direct the company's actions to achieve its goals. In the business plan, you should first describe the entire management team and its responsibilities, then introduce the special talents, characteristics and attainments of each manager separately, and describe in detail the contribution each manager will make to the company. The business plan should also clarify management objectives and organizational chart.
6． Excellent plan summary
The plan summary in the business plan is also very important. It must make the reader interested and eager for more information, and it will leave a lasting impression on the reader. The plan summary will be the last part written by the entrepreneur, but it is the first thing that investors will read. It will extract the most relevant details from the plan to raising funds: including the basic internal situation of the company, the company’s capabilities As well as a concise and vivid summary of the company's limitations, the company's competitors, marketing and financial strategies, the company's management team, etc. If the company is a book, it is like the cover of the book. If done well, it can attract investors. It will give venture capitalists the impression: "This company will become a giant in the industry, and I can't wait to read the rest of the plan."
2. Contents of the business plan< /p>
1. Plan summary
The plan summary is listed at the front of the business plan. It is the condensed essence of the business plan. The plan summary covers the key points of the plan to make it clear at a glance so that readers can review the plan and make judgments in the shortest possible time.
The plan summary generally includes the following content: company introduction; main products and business scope; market overview; marketing strategy; sales plan; production management plan; managers and their organization; financial plan; capital demand status wait.
When introducing a company, you must first explain the ideas for starting a new company, the formation process of new ideas, and the goals and development strategies of the company. Secondly, it is necessary to explain the current situation of the company, its past background and the business scope of the company. In this part, it is necessary to make an objective review of the company's past situation and not avoid mistakes. Pertinent analysis can often win more trust, making it easier for people to agree with the company's business plan. Finally, we also need to introduce the entrepreneur’s own background, experience, experience and expertise. The quality of entrepreneurs often plays a key role in the performance of enterprises. Here, entrepreneurs should try to highlight their strengths and express their strong enterprising spirit to leave a good impression on investors.
In the plan summary, the company must also answer the following questions: (1) The industry in which the company is located, the nature and scope of the company's operations; (2) The content of the company's main products; (3) The company's Where is the market? Who are the customers of the company and what are their needs? (4) Who are the partners and investors of the company? (5) Who are the competitors of the company and what impact the competitors have on the development of the company.
The abstract should be as concise and vivid as possible. In particular, explain in detail what makes your business different and the market factors that drive its success. If the entrepreneur understands what he is doing, a summary of just 2 pages will be enough. If the entrepreneur doesn't understand what he or she is doing, the summary may take more than 20 pages. Therefore, some investors "sort the wheat from the chaff" based on the length of the summary
2. Product (service) introduction
When evaluating investment projects, one of the issues investors are most concerned about is whether and to what extent the products, technologies or services of venture companies can solve real-life problems. , or whether the venture's products (services) can help customers save money and increase income. Therefore, product introduction is an essential part of the business plan. Generally, product introduction should include the following content: product concept, performance and characteristics; main product introduction; product market competitiveness; product research and development process; plan and cost analysis for developing new products; product market prospect forecast; product brands and patents.
In the product (service) introduction section, entrepreneurs should give a detailed explanation of the product (service). The explanation should be accurate and easy to understand so that investors who are not professionals can understand it. Generally, product introductions must be accompanied by product prototypes, photos or other introductions.
Generally, product introductions must answer the following questions: (1) What problems do customers hope the company's products can solve, and what benefits can customers get from the company's products? (2) What are the advantages and disadvantages of the company's products compared with those of competitors? Why do customers choose the company's products? (3) What protection measures has the company taken for its products? What patents and licenses does the company have, or what agreements has it reached with manufacturers that have applied for patents? (4) Why can the company's product pricing enable the company to generate sufficient profits, and why do users purchase the company's products in large quantities? (5) What methods does the company adopt to improve the quality and performance of its products, what plans does the company have for developing new products, etc. The content of product (service) introduction is relatively specific, so it is relatively easy to write. Although praising one's products is necessary for sales, it should be noted that every promise made by the company is "a debt" and must be worked hard to fulfill. Remember, entrepreneurs and investors are building long-term partnerships. Empty promises can only make you proud for a while. If a company cannot fulfill its promises and repay its debts, the company's credibility will inevitably be greatly damaged, which is something that real entrepreneurs would disdain.
3． Personnel and organizational structure
After having a product, the second step for entrepreneurs is to form a combative management team. The quality of corporate management directly determines the size of corporate operating risks. High-quality managers and a good organizational structure are important guarantees for managing a company well. Therefore, venture capitalists will pay special attention to the evaluation of the management team.
The managers of an enterprise should be complementary and have team spirit. An enterprise must have specialized talents responsible for product design and development, marketing, production operation management, corporate financial management, etc. In the business plan, the key managers must be clarified, their abilities, their duties and responsibilities in the company, and their past detailed experiences and backgrounds introduced. In addition, in this part of the business plan, a brief introduction to the company structure should also be given, including: the company's organizational chart; the functions and responsibilities of each department; the heads and main members of each department; the company's remuneration system; A list of shareholders, including stock options, proportions and privileges; the company’s board of directors; and background information on each director.
4. Market forecast
When a company wants to develop a new product or expand to a new market, it must first conduct market forecast. If the forecast results are not optimistic, or the credibility of the forecast is doubtful, then investors will have to take greater risks, which is unacceptable to most venture capitalists. Market forecasting must first predict demand: Is there a demand for this product in the market? Can the degree of demand bring the desired benefits to the enterprise? How big is the new market? What is the future trend of demand development and its status? What are the factors that affect demand? Secondly, market forecasting also includes an analysis of the market competition situation - the competitive landscape faced by the company: Who are the main competitors in the market? Is there a market gap that is beneficial to the company's products? What is the company's estimated market share? What kind of reaction will this company's entry into the market cause from its competitors, and what impact will these reactions have on the company? etc.
In the business plan, the market forecast should include the following contents: a summary of the current market situation; an overview of competing manufacturers; target customers and target markets; the market position of the company's products; market segmentation and characteristics, etc. Venture companies' market forecasts should be based on rigorous and scientific market research. The market faced by venture companies is inherently more volatile and elusive. Therefore, venture enterprises should try to expand the scope of information collection, pay attention to environmental predictions and adopt scientific prediction methods and methods. Entrepreneurs should keep in mind that market predictions are not made out of thin air. Wrong understanding of the market is one of the main reasons for business failure.
5． Marketing strategy
Marketing is the most challenging aspect of business operations. The main factors that affect marketing strategy are: (1) characteristics of consumers; (2) characteristics of products; (3) the characteristics of the company itself Situation; (4) Market environment factors. What ultimately affects marketing strategy are marketing cost and marketing efficiency factors.
In the business plan, the marketing strategy should include the following: (1) Selection of market agencies and marketing channels; (2) Marketing team and management; (3) Promotional plans and advertising strategies; (4) Price decisions. For start-up companies, due to the low visibility of their products and companies, it is difficult to enter the stable sales channels of other companies. Therefore, companies have to temporarily adopt high-cost and low-efficiency marketing strategies, such as door-to-door sales, large-scale product advertising, giving profits to wholesalers and retailers, or selling to any company willing to distribute. For developing enterprises, on the one hand, they can use the original sales channels, and on the other hand, they can also develop new sales channels to adapt to the development of the enterprise.
6. Manufacturing plan
The production and manufacturing plan in the business plan should include the following contents: current status of product manufacturing and technical equipment; new product production plan; requirements for technology improvement and equipment update; quality control and quality improvement plan.
In the process of seeking funds, in order to increase the evaluation value of the company before investment, entrepreneurs should try to make the production and manufacturing plan more detailed and reliable. Generally speaking, the production and manufacturing plan should answer the following questions: What is the status of the workshops and equipment required for the company's production and manufacturing; how to ensure the stability and reliability of new products when entering large-scale production; the introduction and installation of equipment, and who are the suppliers? ; What is the design of the production line and product assembly? What is the lead time of suppliers and the demand for resources? The formulation of production cycle standards and the preparation of production operation plans; Material requirements planning and its assurance measures; What are the methods of quality control? ; other related issues.
7. Financial planning
Financial planning requires more energy to do specific analysis, including the preparation of cash flow statements, balance sheets and profit and loss statements. Liquidity is the lifeline of an enterprise. Therefore, when an enterprise starts up or expands, it needs to have a detailed plan in advance and strict control over the liquidity during the process; the profit and loss statement reflects the profit status of the enterprise, which is the profit status of the enterprise after a period of operation. The operating results; the balance sheet reflects the company's status at a certain moment. Investors can use the ratio indicators obtained from the data in the balance sheet to measure the company's operating status and possible return on investment.
Financial planning generally includes the following contents: (1) Conditional assumptions of the business plan; (2) Estimated balance sheet; Estimated profit and loss statement; Cash receipts and expenditures analysis; Source and use of funds.
It can be said that a business plan outlines what entrepreneurs need to do in the process of raising funds, and financial planning is the support and explanation of the business plan. Therefore, a good financial plan is very critical to evaluate the amount of funds required by a venture and increase the possibility of the venture obtaining funds. If the financial plan is not well prepared, it will give investors the impression that corporate managers are inexperienced, reduce the assessed value of risky companies, and increase the business risk of the company. So how to formulate a good financial plan? This first depends on the venture's vision—whether to create a new product for a new market or to enter an existing market with more financial information.
It is impossible for a start-up enterprise focusing on a new technology or innovative product to refer to the data, prices and marketing methods of the existing market. Therefore, it has to predict the growth rate and possible net profit of the market it enters, and sell its ideas, management team and financial model to investors. A venture entering an existing market can easily illustrate the size of the market and how it will improve. Venture companies can plan the sales scale of the company in the first year based on obtaining information about the target market.
The company's financial plan should be consistent with the assumptions in the business plan. In fact, financial planning is inseparable from an enterprise's production plan, human resources plan, marketing plan, etc. To complete financial planning, the following questions must be clarified: (1) How much will the product be shipped in each period? (2) When will product line expansion begin? (3) What is the production cost of each product? (4) What is the pricing of each product? (5) What distribution channels are used, and what are the expected costs and profits? (6) What types of people need to be hired? (7) When will employment begin and what is the salary budget? etc.
3. Inspection
After the business plan is written, it is best for the entrepreneur to check the plan again to see if the plan can accurately answer investors’ questions and strive to Investors' confidence in the company. Usually, the plan can be checked from the following aspects:
1. Does your business plan show that you have experience in managing a company? If you lack the ability to manage the company yourself, then be sure to clearly state that you have hired a business guru to manage your company.
2． Does your business plan show your ability to repay the loan? Be sure to provide prospective investors with a complete ratio analysis.
3. Does your business plan show that you have conducted a complete market analysis? Make investors convinced that the demand for the product stated in your plan is real.
4. Is your business plan easily understood by investors? The business plan should have an index and table of contents so that investors can easily refer to each chapter. In addition, ensure that the flow of information in the directory is logical and realistic.
5. Do you have a plan summary in your business plan and put it at the front? The plan summary is equivalent to the cover of the company's business plan, and investors will read it first. To keep investors interested, the plan summary should be written to be engaging.
6. Is your business plan grammatically correct? If you can't guarantee it, then it's best to ask someone to check it for you. Spelling mistakes and typographical errors in a plan can quickly cost an entrepreneur an opportunity.
7. Can your business plan dispel investors' doubts about your product/service? If needed, you can prepare a product mockup. All aspects of the business plan will have an impact on the success of fundraising. Therefore, if you lack confidence in the success of your business plan, it is best to consult the plan writing guide or consult a professional consultant.