Designing The Business Plan?Usually enough business plans pass through my hands that, although they formally collect all the necessary points, they do not manage to transmit that special “something” that their project has and they end up being discarded.
Designing The Business Plan
We can fill in each of the sections, but in my opinion the key is to solve the question that surrounds the mind of the person who reads the business plan in each section.
In general, there is a tendency to download one of the hundreds of templates that exist to create business plans and fill out what the template asks for, without reflecting on whether this is the best way to convey the message … or what it is business plan.
And it is that a business plan must be presented differently depending on what you want to achieve: it is not the same to write it to look for private investors (business angels), venture capital funds or to ask for money from a bank … or even for yourself. Sometimes the entrepreneur falls into the lie of thinking that a business plan is necessary only if he is going to ask for someone else’s money …. Completely wrong thing. A business plan is a reflection tool that helps to focus and specify many ideas, as well as a framework for decision making. This is one of the best thing to Designing The Business Plan.
That said, the business plan is something alive, and we should not obsess about fulfilling it … as they will change with the circumstances of the market, competition or even business model.
As you can imagine, there are almost as many ways to correctly state a business plan as investors, but in general, and from my point of view, there are some minimums. One of the first is relative to its form of presentation: it should occupy as much as 15-25 pages, leaving as annexes all the data and additional details, with an easily readable font. Your design should be very visual, using diagrams and graphics wherever possible
In general, I think there are many tools that can greatly facilitate the creation of a convincing and innovative business plan ( value curves, empathy maps, business model canvas … ) and that usually the entrepreneur does not know, so I will try to mention some and his role in the famous business plan. This is one of the best thing to Designing The Business Plan.
The executive summary should have a maximum length of 1-2 pages, be very easy to read and be self-contained. It must transmit enough information so that the reader can decide whether to continue reading or not, which makes his writing one of the most critical parts. It must be written clearly, expressing the key points of the project, but without falling into excessive detail.
At least you must collect:
Description of the project: A single paragraph where the project must be described and the need resolved for the client.
Competitive value, market and customers: Describe why the project will succeed, what market it is aimed at (size, growth … etc) and what profile the client or clients have … in a word: to whom and how much will be sold
Financing requirements: how much money is needed and what TIR to 3/5 years is planned to give.
Team: Who they are and why they are the best for this project
Critical aspects of the plan
KEYS : Awaken the interest and curiosity of the reader to read the rest.
WHAT QUESTION RESOLVES? : What is the project about? Do I want to continue reading? How much do they ask?
A description of the extended project, of a page, in which the concept of the business is perfectly clear. Here the important thing is to convey that special “something” that the project has and that sets it apart from the competition. As Fernando Trías de Bes says:
“Entrepreneur is one who has a unique vision about a common idea”
Keys : Clear and understandable vision of what the project is, its keys and the environment.
What Question Resolves? : What exactly is the project about? What do you want to do? Is there business behind that opportunity? This is one of the best thing to Designing The Business Plan.
This section details the first point in which market to compete, its volume (in millions of euros / years, for example, although one can speak of size -number and type of companies) and growth rate.
For me it is interesting to pick up an indication of the “moment” of the market, since it allows a long-term idea of the sustainability of the business.
Once the “macro” data of the market has been identified, in a business plan it must be passed on to typify the target customer of the product or service: who is it? Are we going to address everyone equally or are there several different segments that need to be addressed differently? What are the important people in the chain of purchase (recommender, decision maker, end user …) and which and how are we going to address?
In this sense, it is often interesting to use a map of empathy ( I recommend the presentation of Maribel Rincón ) to understand the client, his motivations … etc.
Another key aspect is the study of competition: type, quantity, main “players” … Not only should they be able to transmit how they compete on a quantitative level, but also their way of understanding the market (which can lead to interesting opportunities). I like to do this analysis using the value curves described in the book ” The blue ocean strategy ” about which we talked some time ago, and also allow us to identify the key points of competition in the sector.
One of the classic errors when evaluating the competition is not to include, or at least take into account substitute or complementary products or services ( as we have said at some other time , if we have a cinema the substitute products are going out to dinner … etc. )
Finally, regarding the competition, I think it is important to make a small analysis of how we expect them to behave once the product is introduced in their market. Will they ignore us (the best that can happen!)? Acquisition attempts? … etc.
One of the mistakes that all entrepreneurs in Spain sin / sin is their lack of international vision … why not compete on a global scale, or in other markets in a second phase? If so, it is advisable to make at least a brief description of the intention, market types and competitive approach. This is one of the best the thing Designing The Business Plan.
Finally, I personally would like to meet (although I have never been lucky enough to see it) a graph of environmental analysis (similar to the one I showed in this presentation ) where at least the main forces that will influence the project are identified ( of industry, market, macroeconomics and trends )
Key : Demonstrate knowledge of the competitive environment, make it clear that there is business and that customers and competitors are known .
What Question Resolves? : Are there any customers? Do they know who they are and have thought about how to address them? Does the market seem capable of responding well to the project?
DIFFERENTIAL VALUE AND COMPETITIVE ADVANTAGES
This is one of the most critical points, since it aims to unveil the “mojo “of the project, the secret sauce that will make it succeed.
For me, the best way to start is through the business model, which gives a global vision of how the company intends to compete and what are its main keys. For this, the best way to translate it into a business plan in my opinion, is using a ” Business model canvas “, proposed by A. Osterwalder … I can attest that it is a great tool to design innovative business models ( I use it often, here you can see its components )
This section should make clear the unique value proposition of the company (which in the end translates into answering the question: “Why are they going to buy from us and not from the competition?”). Innovative business models are largely responsible for companies that challenged the establishment…
For this it is important to make clear that competitive approach will be used to solve the work that our client needs (authentic key of the model): are we going to compete on the same variables that our competition ( performance ) acts on or are we going to identify unresolved needs of the client? (Usability …). In addition, it is important to know what are the immutable rules and principles of the market in order to explain how they are going to break (a point that has already begun to be outlined while creating the value curve)
A “trick” that brings credibility to the project is the existence of one or several clients willing to get involved in some phase of the development of the product or service ( co-creation model ), giving feedback and helping to get a product close to market needs. This is one of the best thing to Designing The Business Plan.
Additionally, at this point it is especially important to deal with several aspects:
How will we react when the competition perceives the presence of our company? Is there a “Plan B”?
What are the future steps to continue maintaining the competitive advantage? How will the product evolve?
What entry barriers exist for current competitors or even new players ? Is the product patentable?
Key : Demonstrate that there is an unmet need in the client (for which he is willing to pay), and that the product or service we offer is the best way to resolve it. These all are the best thing to Designing The Business Plan.