A company without a business plan is said to be like "a car with no address."
The Business Plan commits the three essential aspects of business management: planning, executing and evaluating operations. It can be understood as a source of instructions, outside and inside the company, that clearly translates the idea of the service or product to be placed on the market and the results to be obtained.
Also known as the Business Plan, it can be defined as a map that describes the trajectory of the company or business, in three stages; Past, by way of introduction; Present: with the specifications of the situation at the moment; Future: with projections of goals and objectives.
It is a document that in an orderly and systematic way details the operational and financial aspects of a company. So, like a map that guides the traveler, the Business Plan allows you to determine in advance where the company is, where you want to go and how far you need to go to reach the set goal.
The Business Plan brings together in a single document all the information necessary to evaluate a business and the general guidelines to start it.
As it appears on the site (http://www.monografias.com/trabajos15/plan-negocio/plan-negocio.shtml) it is defined as a formal document, prepared in writing, which follows a logical, progressive, realistic, coherent process and oriented to action, which includes future actions to be carried out, both by the employer and by its collaborators, in order to, using the resources available to the organization, seek to achieve certain results (objectives and goals) and At the same time, establish the mechanisms that will allow controlling this achievement.
After an analysis of the different concepts that the authors offer about the Business Plan, it is essential to focus on the basic objective and that it is clear, written, easily communicable, coherent and measurable.
The Business Plan aims to help achieve a broad and objective knowledge of the company or activity. At the same time, find partners or serve as a basis to convince them of the merit of the project and to gather the resources and capacities necessary to implement the plan, and thus obtain the financing to run the business.
Presenting this plan is essential to seek financing, partners or investors, and serves as a guide for those who are in charge of the company.
In the process of carrying out this document, the environment of business activity is interpreted and the results that will be obtained by acting on it in a certain way are evaluated. The variables involved in the project are defined and the optimal allocation of resources is decided to implement it.
Depending on the magnitude of the project, it can take a few days or several months to complete the plan, since it is not just a matter of writing a document but of imagining and testing a whole logical structure. (Can this quantity be sold at this price? With this structure can this demand be met? Is this investment sufficient for this projected growth?).
Importantly, while financial and economic aspects are critical, a business plan should not be limited to spreadsheets and numbers alone. Quantitative information must be supported by strategic, commercial, operations and human resources proposals.
The Business Plan is considered an instrument to establish and systematize the feasibility of an organization's business strategy based on the strategic thinking of its executors, plan the business, integrating 3 fundamental elements: the external, the internal of the organization as well as the financial feasibility to carry it out.
In current times, the best formula for organizations to remain competitive in the market is to develop businesses that respond to a specific demand; in such a way that the use of the endowment of resources and skills that it possesses, occurs adding value for the client and also for the organization.
Business development has different alternatives in an organization, those that go through the emergence of a new business at the corporate level, the development of a new product or service within an existing business, which may remain within the business in question or may also acquire a life of its own and a third alternative, the one that offers the improvement of an existing product or service.
Businesses permanently undergo a process of adaptation to the determining factors of the environment, satisfying needs, desires, expectations and demands, determining how to face competitors, complementing their activities with those of other agents present in said environment, prevailing in this process customer orientation, which is the element that ultimately guarantees the successful permanence of the organization, based on the assumptions that characterize the performance of the modern organization and which, based on the stated satisfaction of needs and demands of a given audience, culminates in guaranteeing the profitability of its operations.
Posing the change as a premise for the successful performance of a business in a strategic projection, it requires an innovative spirit. According to authors, innovation does not occur exclusively for products or services radically different from those that the company owns, but it also includes the improvement and modification of traditional products and services.
But it is not enough to easily detect business opportunities, you must go further: you must foresee how to turn those opportunities into a real business. Obviously, the company cannot always carry the idea that responds to the detected business opportunity on its own; on many occasions, because it does not have the necessary financial resources to carry it out. In this case, the development of the business requires the support of financial entities or the participation of other entrepreneurs with sufficient capital to fine-tune the project.
A coherent and convincing link between strategic projection and the possibility of accessing financial resources is required, with the least possible risk. And this means of connection is the Business Plan.
In general, the reasons for deciding to carry out a Business Plan are:
• Have a project presentation document to potential investors, partners or buyers.
• Make sure that a business makes financial and operational sense before it is launched.
• Find the most efficient way to carry out a project.
• Create a framework to identify and avoid potential problems before they occur, with the consequent saving of time and resources.
• Forecast resource needs and their allocation over time.
• Evaluate the performance of a going concern.
• Valuing a company for its merger or sale.
• Guide the start-up of a venture or business.
The Business Plan provides the facility of, once the possibilities that the environment provides to the organization have been analyzed, the sales to be made are anticipated, the income levels that said sales will generate, the production or activity levels that the organization will develop to achieve them., as well as the necessary material and financial resources, the required investments, the operating costs and the human resources that will be involved, among other elements. All this is possible because it takes the elements emanating from the strategic exercises that the organization develops, both at the corporate and business level, becoming an integrating instrument of the proposed strategies that ultimately seeks to verify the coherence of the proposed purposes.
The Business Plan is an instrument to plan the materialization of a business, but also serves as a tool for decision-making and obtaining financing either from the shareholders themselves or from a financial entity.
As stated on the website: www.myownbusiness.org/espanol/S2/, to structure the Business plan it is necessary to take into account:
1. The basic concept of the business.
2. Gather all the data you can about the feasibility and the specific points of the business concept.
3. Focus and refine your concept based on the data you have collected.
4. Highlight the specific subjects of your business. Using a “what, where, why, how” approach can be helpful.
5. Give the plan a compelling shape so that it not only gives you insight and direction, but at the same time becomes a valuable tool for managing the business relationships that will be very important to you.
It is a widespread custom to think that only large companies require a Business Plan. However, this document is indispensable for small and medium-sized enterprises (SMEs). Many entrepreneurs consider the Business Plan as "the most powerful tool" that can be used to operate in the changing market economy. Therefore, this instrument in the hands of a micro or medium businesswoman could be an open key to a myriad of business opportunities.
When you think of a Business Plan, it is usually considered that it is only used to find financing. The first objective should be to define precisely and objectively the feasibility of the project or company.
It can also be used for; redefine the course of action orientation, support a credit application, to seek investors or new partners, to present a purchase offer; to get a license or franchise from a local or foreign company; among other options.
Some of the most common and most sought benefits when writing and implementing a business plan according to the article ¨ The business plan, a little used tool ¨ of the Cuban Entrepreneur Magazine, are the following:
• It is essential, if you wish, to request financing from a banking institution or government agency, since it allows us to document the feasibility of the business in a document.
• Increases the competitiveness of the company.
• Facilitates the procedures and negotiations when renting buildings and properties.
• Transmits the essence of a business to partners, employees, among many other benefits.
• Many organizations ask for a plan as proof of business, so if it is well argued, it will be more likely that more investors (or partners) and resources will be obtained to undertake the plan.
• It is an essential requirement to get investments and investors.
• It is an excellent guide for the owner.
The business plan may have different scope and purposes, depending on the organization's objectives and the strategy to be developed. The above is expressed in the following table on the basis of the objectives pursued with its preparation, aspects that must be closely related to the strategy proposed by the company for its business. We classify this business plan as monitoring since it is a stable business, which has been inserted in a new context, in which alternatives are evaluated and sought with a view to gaining market share, increasing the level of satisfaction of customers and sales.
Types of business plan can also be seen according to the objective it pursues.
According to the points of view of different authors, there are several criteria on the structure that the Business Plan should have, after the corresponding analysis it has been decided that the aspects that the Business Plan should cover are the following:
- Executive Summary: it offers a general impression of the project, it contains the key data and highlights them, in a few pages it must provide the reader with all the relevant elements of the business.
- Business conception: the business plan must begin by identifying the need to be covered, based on the business idea and concept to be developed, as well as the technological solution that the organization will offer (product / service) to solve the consumer problem. Said product / service must be subjected to analysis of all possible edges thereof, determining the extent to which it responds to the requirements of the consumers that constitute the target audience.
In this section, the business contribution to the organization's product / service portfolio can be presented.
As it is essential to define the business correctly, it is necessary to go into more details about the mission. If she is well determined, she supports the business in the short and / or long term as well as its direction and purpose in delimiting a particular business position.
The mission would be defined in the following questions:
1- What needs or desires are we satisfying ?.
2- With what products or services will we give greater satisfaction to our clients, to whom do we sell ?.
3- With what competitive advantage do we differentiate ourselves from the competition? Why do they choose us?
Analysis of the sector: carry out the analysis of the competitors from all points of view, (of the macro and the microenvironment) taking into account the model of the competitive forces of the sector of Michael Porter.
The key factors of success, related to technology, marketing, production, and organization, must be analyzed, we can mention the following:
• The competence of human resources.
• Staff productivity, compliance with service quality parameters.
• Quality of development, minimizing the number of returns.
• Technological assurance.
• Estimated occupation time by specialist.
Market analysis: where the market, growth possibilities are identified, the segment (s) to target are established, the demand is calculated, the main characteristics of the consumer, etc.
Internal analysis: it consists of an audit of resources, as well as the analysis of the business portfolio and how the proposed business contributes to its effectiveness. Being human resources a factor of great importance for the success of any business, a study of them is carried out, defining the competencies required to successfully start the business in question.
Strategic diagnosis: To confront the external aspects with the internal ones, in order to establish, taking into account the objectives that are pursued with the business object of planning, the possible strategies for its development and success.
Offer design: define the strategies for the marketing offer to be made, attending to the needs and demands of the target audience.
Marketing is considered both a philosophy and a technique.
“As a philosophy it is a mental posture, an attitude, a way of conceiving the exchange relationship on the part of the company or entity that offers its products to the market.
This conception starts from the needs and desires of the consumer and aims to satisfy them in the most beneficial way, both for the consumer and for the seller. (Taken from Santesmases, Miguel, "Marketing: concepts and strategies" Ed. Pirámide, 4th Edition, 1999, p. 45).
Marketing is conceived as a management philosophy, as strategic thinking, which involves the adaptation of the company to the environment. We refer to Strategic Marketing.
The competitive environment requires the analysis of market opportunities and threats, as well as the organization's competitive positioning in different markets and segments.
The company, based on its distinctive capabilities and resources, will formulate a strategy that allows it to adapt to the competitive environment.
“As a technique, Marketing is the specific way of executing or carrying out the exchange relationship that consists of identifying, creating, developing and serving demand. (Taken from Santesmases, Miguel, "Marketing: concepts and strategies" Ed. Pirámide, 4th Edition, 1999, p. 45).
• Organization of the process and resource needs: This is to describe the process of production or provision of services, as well as all the organizational and administrative elements that are required. Equipment needs are establishedit must be counted on to respond to the volumes of products / services contained in the project presented. On the other hand, it establishes the amount of resources that must be destined to the payment of wages, salaries, allowances, representation expenses for trips, etc. Also at this point the management team is presented, bearing in mind that investors must be convinced that what is proposed may have a good end, from knowing who will run the business. The name of the person who is responsible for taking the business to action must be reflected, as well as the date of the project's elaboration.
Product or Service
The service is defined as, "any act or function that one party may offer to another, which is essentially intangible and does not result in any property, its provision may or may not be linked to a physical product", that is, it is the provision offered by organizations and their staff.
Customer satisfaction in service delivery can be defined by comparing the customer's perception of the required service against the customer's expectation of the service upon receipt.
Price
In setting pricing targets for professional services, several factors should be considered:
- Planned market position for the service.
- Elasticity of demand.
- Competitive situation.
- Strategic role of price.
According to all the factors that must be considered for pricing, two methods must be established in the case of services:
1- Prices based on costs, with the incorporation of Know how.
2- Market-oriented prices.
Pricing for services, as for goods, is largely a combination of good management, experience, trial and error, intuition, and good luck.
In this section, the distribution channels that can be direct or indirect are defined.
Communication routes or strategies (direct and indirect) and physical evidence (peripheral or essential).
- Financing: at this point the required budget must be specified to carry the business effectively. It includes a detailed analysis of the financial situation of the business, includes financing needs, expected results, the financial statements, cash flow, the determination of the NPV, the IRR, the residual value of the business, etc., as well as the main ratios financial. It can even contain possible alternatives to exit the business in case it fails.
- Schedule: shows a realistic planning of the project execution based on defining its critical points.
- Risk Analysis: the possible risks of all kinds that the business will face are presented.
Conclusions: Emphasis is placed on the key factors of the projected business.
