How To Write a Successful Business Plan?
If you have a project and you want to put it into practice, there is one thing you need to start with: The Business Plan!
The Business Plan is your Business Plan.
It is the document with which you describe your insurance business idea and try to illustrate to the world why they should believe in you.
But it is much more; it is also how you begin to realize your idea and transform it into numbers and give it value.
Because an idea in itself is worthless if it is not converted into numbers, graphs, and detailed analyzes.
Have you ever written a Business Plan?
If you’ve already drafted one, you already know it’s not easy at all.
But you also know that this tool is also the way you will understand your idea and what you want to do.
A written project will often sound different than you imagined.
You will understand new things, correct some mistakes, but above all you will understand if it is just a good idea or instead it can potentially change your life.
In my life, I have not written a thousand Business Plans, but I have read many.
I like to see what others write.
And you know what? Most business plans are pretty bad.
OK, the numbers aren’t for everyone. Many have brilliant ideas.
But only a few know how to describe and concretize them.
But if you don’t learn how to manage numbers, you won’t be able to get anyone to invest in your idea.
If you don’t learn to read the numbers, you will never understand what lies behind the investment projects they will propose to you.
I have already explained to you how to read a balance sheet, today I want to guide you to create a successful business plan.
But let’s start step by step and see what is meant by drawing up a Business Plan and on what occasions it can be useful.
In this article
- What is a Business Plan?
- When to draw up a business plan?
- The sections of the Business Plan
- Section 1 – The Business Idea
- Section 2 – The reference market
- Section 3 – The economic and financial section
- How do I start if I have never done a business plan?
What is a Business Plan?
A business plan is a concise document with which the future objectives of a particular business and the strategies to achieve them are described.
You must therefore answer these two questions:
- What do you want to do?
- How do you want to do it?
This exercise is necessary at various times in the life of a company.
When to draw up a business plan?
In particular, you will be asked during the start-up phase, which is when you want to propose a new business.
But also if you want to expand your business and raise new capital from investors or banks.
Even when as an employee you want to propose yourself to a new company, you may be asked for a Business Plan.
This is because, when you propose, the employer will evaluate you as an investment and will want to understand if you have a business idea or are you just an additional cost.
The business plan is not a static document. You can continuously update it to consider the news of the context in which you are moving and to broaden your time horizon.
The sections of the Business Plan
A business plan generally consists of three sections:
- The Business Idea and the Business Concept;
- The reference market ;
- Economic and financial data.
Section 1 – The Business Idea
In the first part of the document, you will need to describe your idea and explain how you intend to make it work.
In summary, you can indicate how your idea was born, what need you intend to respond to, how you intend to structure your business and in which area you want to operate.
You will be able to describe the Team and in short the distinctive skills of each of the members.
Section 2 – The reference market
In the second part, you will be able to describe your target market, identify your potential market and think in terms of the share you intend to reach.
You will also need to analyze your competitors and their positioning and indicate how you intend to differentiate yourself to be successful.
Section 3 – The economic and financial section
After the more descriptive sections that lay the foundations of your business, you will have to deal with the numbers.
Keep in mind that this is the section that investors will focus on.
You will then have to translate into numbers what is reported in the first two sections and in addition identify the sources of funding for your initiative.
You will then be able to fill in a
- Income statement;
- A balance sheet
- A financial statement of your initiative.
You will need to pay particular attention to the evolution of the cost structure as your business and revenues evolve.
You will have to strive to cover a time horizon of at least 3 years and also reach wider horizons, 5 or even 10 years.
By filling in the forecast income statement and balance sheet you will be able to understand the financial needs of your initiative.
Generally, new businesses absorb money at the beginning and then release it later.
And this is precisely the interest of those who finance you.
He wants to understand where the break-even point is, that is the breakeven point of your initiative when the revenues will exceed the costs.
He wants to see how much money you need, how quickly you will be able to pay it back, and how much you will make it profitable.
The business world is very simple (and cynical): if you don’t have money in hand or you ask someone and they give it to you, otherwise you can also close your dream.
In the business plan, you can then indicate how much money you need and how you intend to collect it.
Consider that to be sustainable or generate cash, a business must otherwise ask for money from third parties in the form of financing or investment.
That is why if you choose to sell a share of your project to a specialized fund or qualified investors, you will be able to supplement your business plan with an evaluation.
You will therefore be able to give value to your idea, based on the results that it can guarantee in the future and indicate which share of your company you are willing to sell to third parties.
This process is the most imaginative, usually.
However, although it is an often questionable process, it is certainly an important step and must be done carefully.
Even when you read a business plan and put yourself in the investor’s perspective, I advise you to be very careful about it.
It’s nice to dream, but I always like to keep my feet on the ground and evaluate real costs and revenues.
In this regard, you can use evaluations made on previous transactions and understand if the company being evaluated is overvalued or undervalued.
How do I start if I have never done a business plan?
If you’ve never compiled a document such as a business plan, you can start getting yourself a reference outline.
You find millions of them online. Start with this article if you want to view successful international business plans.
Just put your business plan and the sector in which you intend to operate in your search engine to see many useful examples.
It then begins with the compilation of the first sections and only finally gets to compile the diagrams.
In the numerical part, you can also get help from an experienced professional.
Please do not overdo the forecasts in order not to lose your credibility.
However, don’t forget to use creativity because a new initiative must contain elements of novelty and arouse the interest of investors.
Finally, pay attention to the executive summary or the summary of the document that you can place at the beginning of the same and it will be a useful guide to deepen the key concepts.
Every time I wrote my idea, I was able to transform it into something new and to clarify it in my head.
This is because sometimes I can’t express my ideas right away.
They must mature, contextualize and acquire their autonomy.
The business plan is the best tool to carry out this process and communicate it to third parties.
A plan must also be the result of a team that knows how to communicate it and put it into practice.
This is why in any company the workgroup that supports it and its skills are also highly valued.
Enthusiasm also counts but of course that’s not all.
Because a good team and a good idea must meet to be successful.
If you have already written a business plan and want to tell us about the process you followed, write it in the comments.
Hey everyone! My name is Alfred Williams and I am passionate about business and finance. I have been working and managing in these fields for over 10 years. I have expert knowledge of market strategies, financial analysis, and decision-making processes. I also have experience in consulting and budgeting. I'm excited to use my knowledge and expertise to help others achieve their goals. Follow me for the latest insights on business, finance and decision-making. Business, finance - let's get started!
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