Structure and model of a business plan

business plan

This article is intended to assist in developing a business plan . In it we present a typical structure and a model of a business plan that you can use as a base or reference to developing yours.

business plan
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To learn how to make a business plan you can also check our article: how to make a business plan step by step , which delves into the development of each of the parts of the structure and served as a guide for the development of the model plan of business.

Structure of a business plan

For the preparation of a business plan there is no standard structure or format that is used for all plans equally, but one must adopt the structure that best creates according to its type of business and the needs or objectives of its Plan, either to serve as an implementation guide, to know the viability of a business, to obtain financing, etc.

For example, if the main objective of a business plan is to obtain a loan, the plan should have well-founded arguments and sufficient information to convince the viability of the project and that one will be able to repay the debt in a timely manner, Although it may overlook some parts of the market study or technical study to give more emphasis to financial study.

A structure commonly used in the development of a business plan is composed of the following parts:

  1. Executive Summary.
  2. Definition of business.
  3. Market study.
  4. Technical study.
  5. Organization of the business.
  6. Investment study.
  7. Study of income and expenses.
  8. Financial study.

Below is a brief explanation of each of these parts, as well as the elements that make them up:

1. Executive Summary

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The executive summary is a summary of the other parts that make up the business plan, so despite going to the beginning of the plan, it must be developed after the other parties have completed.

An executive summary usually includes the following elements:

  • The basic data of the business:the business name to be performed, its location, type of company (EIRL, SC, SA, etc.), etc.
  • Business description:a brief description of the business to be performed and / or the product or service that is being offered.
  • The distinguishing features:the innovative features that will have the business, product or service, and that will allow one to differentiate themselves from the competition.
  • Competitive advantages:aspects where it will have a sustainable advantage over other competitors.
  • The vision and mission statements of vision and mission of the business.
  • The idea of the business need or opportunity:the reasons for the proposal or choice of business.
  • Business objectives:the goals they seek to achieve once launched the business.
  • Business strategies:the strategies to be used to achieve the objectives.
  • The executive team:people who are responsible for implementing and managing the business later.
  • The required investment:the investment that will be needed to start the business and run it for the first production cycle.
  • The expected return:the results of the profitability indicators used.
  • The environmental impact:a summary of the environmental impact that business.
  • The project conclusions: the conclusions that have been reached after completion of the development of the business plan.

An executive summary should effectively be a summary capable of showing in a single reading what the business plan consists of, which is why its development should not cover more than three pages.

2. Definition of business

business plan
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The business definition describes the business to be carried out, as well as other aspects related to it, such as the reasons that justify its proposal, its objectives, and its strategies.

The definition of the business usually includes the following elements:

  • The basic data of the business:the business name to be performed, its location, type of company (EIRL, SC, SA, etc.), etc.
  • The description of the business:the business description to be performed and / or the product or service that is being offered.
  • The distinguishing features : the innovative features that will have the business, product or service, and that will allow one to differentiate them from the competition.
  • The competitive advantages : aspects where it will have a sustainable advantage over other competitors.
  • The target market: the market or target audience which is to run the business.
  • The vision and mission : the statements of vision and mission of the business.
  • The idea of the business need or opportunity:the reasons for the proposal or choice of business.
  • The business objectives : the goals they seek to achieve once launched the business.
  • The business strategies : the strategies to be used to achieve the objectives.

The definition of the business must be able to clearly explain what the business is to be done and / or the product or service to be offered, but at the same time be able to generate interest in them.

3. Market research

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In the market study, the analysis of the industry, the analysis of the target market, the forecast of demand and other elements related to the market where the business is going to operate is developed.

The market study usually comprises the following elements:

  • Industry analysis:the analysis and description of the industry or sector in which the business will operate (history, evolution, size, growth prospects, key players, etc.).
  • Definition and analysis of the target market : a market definition which is to run the business, and the analysis and description of the consumer who conforms (location, age range, tastes, preferences, wishes, purchasing behavior, consumption habits , Customs, attitudes, etc.).
  • Competitive Analysis: analysis and description of future business competitors (quantity, leaders or major, location, experience, production capacity, strategies, pricing, sales outlets, advertising media, strengths, weaknesses, etc.).
  • Analysis and demand forecasting : analysis and forecasting demand will business for the period of time that is projected business plan.
  • Marketing analysis:analysis and development of business strategies or marketing strategies that will be used to meet the target market.
  • Market analysis provider:the analysis and description of the providers that have or could have the business (location, levels of production or supply, credit, rates, guarantees, payment facilities, etc.).

For the development of market research, it is necessary to conduct a market research where used techniques for gathering information such as survey and focus group.

4. Technical study

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The technical study describes the physical requirements necessary for the operation of the business, its production process and the infrastructure, size and other characteristics of the place where it will operate.

The technical study usually includes the following elements:

  • Physical requirements:the physical elements that are necessary for the operation of the business (land, buildings, machinery, equipment, tools, vehicles, furniture, supplies, etc.).
  • The business process:the phases or stages that make up the processor business processes (processes of purchasing, storage, production, distribution, sales, etc.).
  • Local business:the description of the premises where the business work (infrastructure, size, location, production capacity, plant layout, etc.).

For a better description of the elements that make up the technical study, it is advisable to make use of tools such as charts, graphs, flowcharts or flowcharts, drawings, etc.

5. Business organization

The organization of the business describes the legal and organizational structure of the business, the areas or departments that will make it, and other elements related to them.

The organization of the business usually includes the following elements:

  • The legal structure:the legal form under which the business is legally constituted ( natural person or legal entity ), the type of company (EIRL, SC, SA, etc.), etc.
  • The organizational structure:the type of organization that will have the business (functional, by product, matrix, etc.), areas or departments that make up , and hierarchical relationships that will occur between them.
  • Charges and functions:the positions or positions that will each area or department of business, and the functions, tasks, responsibilities, bosses and subordinates who will each.
  • The requirement of staff personnel who will be required for each office or place of business, and the profile that a person should have to apply for each of these (experience, knowledge, skills, etc.).
  • Staff costs salaries, wages, and benefits that will be assigned to each position or office.
  • Information systems:how to be recorded, process and distribute information in the business.
  • Executive Team profile:the profile of the people already has to put up and then manage the business (experience, achievements, knowledge, skills, etc.).

For a better description of the elements that make up the organization of the business is also advisable to make use of tools such as tables, flowcharts, flowcharts, etc.

6. Investment study

The investment study indicates the investment that will be required to start up the business and make it work during the first productive cycle, and the financing to be used or needed.

The study of investment usually includes the following elements:

  • Fixed assets:fixed or tangible assets that are required before starting operations (land, buildings, constructions, infrastructure, machinery, equipment, tools, vehicles, furniture, etc.), and the investment made in them.
  • Intangible assets intangible assets that will be required before starting operations (market research, product design, a legal constitution of the business, obtaining permits and licenses, selection and training of personnel, opening marketing, etc.), and The investment that will be made in these.
  • Working capital:the elements that make working capital (inputs, work in process, finished products, packaging, stationery, utilities, payroll and sales management, maintenance, municipal taxes, advertising, insurance, etc.), And the investment that will be made in these.
  • Total investment:The total investment of the project (the sum of investment in fixed assets, intangible assets and working capital).
  • Financing structure:the amount or percentage of the investment will be financed with equity and the amount or percentage to be financed with foreign capital.
  • Funding sources:the description of sources of external financing will be used and these credits awarded (amount, term, cost, etc.).

In general, the investment study shows what the capital will be needed to run the business, what the capital will be used for, and how it will be obtained or will be sought.

7. Study of income and expenses

In the study of income and expenses, the projections of income and expenses of the business are developed for the period of time in which the business plan is projected.

The study of income and expenditure usually includes the following elements:

  • The budgets of income (sales budget, budget billing, etc.).
  • The expenditure budgets (procurement budget, payment budget, the administrative budget, budget sales expenses, debt payment budget, etc.).
  • The calculation of break-even .
  • The cash budget or cash flow projected .
  • The operating budget or profit and projected losses .
  • The balance sheet

The time in which a business plan is projected usually depends on the objectives of the plan and the type of business to be carried out, being the usual business plans with projections to 1, 3 or 5 years.

8. Financial study

In the financial study is developed the calculation of the period of recovery of investment and profitability of the business.

The financial study usually includes the following elements:

  • The payback period of investment:calculating the time it will take to recover the capital invested.
  • The return on investment : profitability as the financial index return on investment (ROI).
  • TheNPV and IRR : profitability according to financial indices Net (NPV) and Internal Rate of Return (IRR) Present Value.

The idea of the financial study is to show that the project is profitable, how long will the investment be recovered, and how much is expected to be obtained by this.

Model of a business plan

The business plan templates that we are going to present uses as a basis the structure just described.

The business developed in the plan consists of a business dedicated to the preparation and sale of a new brand of jeans for women, which has its main characteristics to use external workshops to make the garments and intermediary businesses for the sale of them.

It should be noted that this model or example of the business plan is a simple plan that uses fictitious data because its only purpose is to serve as a model, example or reference. Reason why it is recommended not to apply it directly or use it as academic work.

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