A business plan is the company’s manual, required for launching a successful business. Its role is to assist in systematically outlining and planning the business and profitability of a new enterprise.
Your company business plan must include a calculation of the investment and other costs associated with starting business operations. You must also make calculations for the company’s regular expenses: payroll, rent, marketing costs, telephone bills, office supplies, insurance, production costs and other significant cost items that should be covered by regular income.
The business plan must also consider profitability calculations for what kind of pricing model should be used for products or services in order to cover expenses.
A business plan does not need to be a hundred-page report– you can plan its extent and focus areas to suit your needs. The business plan helps you to document your consideration of the company’s business idea, competitive ability, resources, customer base, sales promotion measures and profitability for your own use or for an external expert.
Financiers always require a business plan in order to assess the business capability of a company applying for financing.
Key contents of the business plan
What do you sell? Who do you sell to? How do you sell?
- Entrepreneur’s strengths
The expertise, experience, strengths, knowledge of the line of business and networks of the person establishing the business.
- Products and services
The competitive environment, image, competitive advantage sought, price level, margin structure and so on.
- Customers and markets
Customer groups or target groups, their consumer behaviour, location of premises, numbers and methods of reaching them.
Market situation in the line of business and sector, ratio supply to demand, competitors’ strengths, weaknesses and strategies, differentiating factors in view of competitors.
- Practical arrangements
Premises, location, required equipment, employees and initial financing, advertising and marketing, web pages, insurances, accounting etc.
- Financial statement
Investments in premises and equipment, capital required to cover costs of establishment and the first few months in operation, financing instruments.
- Profitability calculations
Sales margin required to cover fixed costs and amortisation of loans or other financing costs, pricing principles for gaining the required sales profits in order to achieve the minimum profit objectives.
Bear in mind that a business plan prepared for setting up a business is not for ever. It must be updated and developed, and must grow alongside the business. A business plan is the entrepreneur’s tool for keeping up-to-date.
My Enterprise Finland provides an electronic tool to draw up a business plan (log in with your personal bank access codes).
Watch Business plan's presentation video on YouTube.