In 2005, then Vice President of Marketing at Google, Susan Wojcicki, realized that amateur YouTube videos were gaining in popularity. At the time, their Google Video project was failing. So Susan decided to buy YouTube by all means. In one day, she created a business plan for the video hosting and presented it to the board of directors.
A few months later Google bought YouTube for $1.65 bln. Susan Wojcicki became president and CEO of the site and has remained on the site ever since. Today, the number of registered users of YouTube has exceeded 2 billion, and the value of the company itself is valued at $170 billion.
Business plan is a basic document for any business. Without it, it is impossible to start a project, attract investment and plan finances in general.
Let’s find out what a business plan is, why business planning is needed, what is the structure of a business plan and what are the requirements for it.
What a Business Plan Is
A business plan is a description of actions for an entrepreneur who is just starting his business or wants to expand it. This document calculates in detail how the product or service will make a profit. It should answer two important questions: how much money will be needed to launch the project and in what time frame it will pay off.
The main difference between a business plan and a business idea is calculations and figures. For example, to create a platform offering the same services as Bizzo Casino is the idea. And calculating how many users will create accounts on this platform daily, how many bets they will place a day, and how much to invest is a business plan.
A business plan details the steps an entrepreneur must take to achieve their goals.
It is also one of the first documents investors will ask for. No venture capital fund, private investor, or bank will invest in a new project without a detailed business plan.
How to Create a Business Plan
You can write a business plan yourself. For example, American entrepreneur Kate Lusio wrote a business plan for a conference center in just a week. She admits it helped her to build her business correctly, understand how to manage it and how to distribute cash flows.
The pros of this approach:
- No additional costs.
- Dives deep into a particular type of business and helps you understand it better.
- Increases your own expertise.
However, it can take longer to create than planned. It’s not always easy to find the right numbers. For example, on the market or a specific niche.
That’s why a business plan that the entrepreneur wrote on his own, it is better to show one or more experts. For example, a marketer or financier.
You can find free universal templates on the Internet to fill them out yourself. You can also look at ready-made examples of business plans and do the same.
4 Rules of a Business Plan
Write as Concisely and Clearly as Possible
The shorter the document, the more likely it is to be read to the end. Also, it’s easier to make changes to a 10-page business plan than to a 40 or more page plan.
Rely on Numbers
The plan must prove: the product or service will find a customer and the company can become profitable. A business plan that has numbers, graphs and other charts is more credible than one with only descriptions and text.
Stick to a Clear Structure
Everything in a business plan should be consistent and logical. In the beginning you should describe the product or service itself, present the target audience, give an analysis of competitors, and then give calculations and assess the overall effectiveness of the project.
You can’t write a business plan once and follow it for five years. The environment in which a project develops is constantly changing. For example, in 2020, many entrepreneurs had to go online and develop their business from scratch.
Structure and Content of a Business Plan
The main thing in business is to consistently go towards your goal, and the main thing in a business plan is to stick to logic and a clear structure. Before you start drafting it, the entrepreneur should answer these questions:
- How do I plan to make money?
- What do I need for that?
- Who are my main competitors?
- How do they market their product or service?
- How much money am I willing to invest in the business?
- What are the advantages of my product and what are its weaknesses?
- How many people will work in my team?
- How long before the business pays for itself?
- When will it be profitable?
- Am I planning to involve investors?
Sections of the Business Plan
Summary of the Document
This is the first section of any business plan, although it is written at the very end. At the same time, it is also the most important section of the entire business plan. Here briefly give the main conclusions: what the entrepreneur plans to run, how much money will have to invest in the project, when it will pay off and what is expected to bring profit.
If an investor is interested in the summary, he will continue reading the business plan. That’s why you need to be as convincing as possible about your business idea here and get investors interested.
Description of the Product or Service
Describe your product in detail, its advantages and strengths. Usually, the goal and mission of the company is outlined in this section, along with its logo, slogan and corporate colors. The main target audience of the project, i.e. groups of people who can be interested in the new product or service, is described in the same section.
This section provides an analysis of the market as a whole and a specific niche. For example, the business of rental dresses in general and rental of wedding dresses specifically. Here you determine a few major competitors, compare products and form a unique selling proposition. In this section it is important to explain: how one product differs from another similar product, what its special features are and how it can compete. You can offer additional services, free shipping, or gifts.
You can prepare questionnaires for potential buyers and ask them to fill it out on social networks or on the website. The better you can study the market, the faster you can make money.
The task of this section is to describe the company’s marketing strategy: how to market the product and how much it will cost. This includes not only the calculation of the price for the product itself, but also additional services. For example, calculate the free delivery, what will be the discounts and special offers.