Business Plan: Practical Tips to Follow

of Luca Vanzulli
by Luca Vanzulli Blogger, Planning & Control Specialist, Content Marketer

The business plan is a fundamental and core tool for the organizational and development strategy of a business venture. A business and financial plan can be aimed at starting a new business (startup), expanding an existing business, launching a new product to enter a new market, or obtaining financing from lending institutions and investors.

The purpose of this article is to place emphasis on the various aspects, which should be considered when drafting a business plan.

In fact, making a financial business plan does not simply mean tracking a flow of revenues and costs or cash receipts and expenditures.

The business plan is a much broader and more valuable set of activities, covering business processes, operational mechanisms, organization, strategies, and involving all areas of the company.

Business Plan: goals and analysis

Proactively approaching the creation of a business plan means starting with the business strategy, shaping the business idea and highlighting what are the goals, objectives and one's entrepreneurial or corporate ambition. You need to know how to tell about your business, the characteristics of the product or beta product you want to focus on.

Market research and external environment

This phase concerns all the activities that are necessary for the implementation of the strategy and will address topics such as production, logistics, business development, sales, legal, insurance, and contractual aspects.

Economic and financial feasibility.

Based on the activities carried out so far, the economic and financial feasibility phase delves into the heart of the business plan modeling by formulating summary scenarios of expected results in terms of revenues, costs, and margins. In other words, projections will be made to show the likely trend of sales volumes, cost structure, profits, cash flows, and the breakeven point. The economic and financial feasibility of the business plan is a key element that requires analysis and flexibility to introduce changes and adaptations.

As you can understand, these various steps described so far should not be considered exclusively sequential, but in reality, they are interconnected, involving continuous reviews, updates, and integrations. The process is dynamic, requiring ongoing assessment and adaptation.

Business management and control

In a business plan, it is not enough to simply state objectives and strategies. It is also essential to highlight how to monitor the company's performance. Rules for monitoring results against expected objectives must be defined. The role of the business controller is crucial for regular verification of economic and financial performance. Analyzing variances can assist in the decision-making process for implementing corrective measures.

Remember: When preparing a business plan, it is equally important to establish an effective system for monitoring results and determine the types of periodic reporting to support business decisions from the outset.

Drafting a business plan

All the analyses and activities we have described so far will lead us step by step to the formal drafting of the business plan. We have focused on gathering data to move from idea to possible business. The product, the clientele, the target market, the capacity of the team, and the analysis of the necessary resources to be employed are the other fundamental elements from which to start in order to write the complete business plan set up consistently according to the purpose for which it is being written.

Conclusions

The art of drafting a business plan requires time and patience and should not be understood as a simple activity of guessing the future trend. The pieces to put together are diverse and require a phase of study and analysis of both the internal and external environment and the dynamics of the relevant competitive arena.

If you would like to explore these issues with a practical approach, we suggest you take a look at this course on Business Plan promoted by Value4You or you can seek advice from the Value Advisory, that is dedicated to help companies and entrepreneurs achieve their business goals by creating value and facilitating growth.