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How should I make a business plan?

People who have an idea often time struggle to see how to represent the idea and see if it’s a potential success or not.

A solution is, of course, to create a business plan, but online templates can be very extensive and become very repulsive, killing the idea instead of bringing it to live.

Some people also don’t get the point with a business plan, should it always be used?

How would a decent, practical, business plan look like?

What should it contain, at least, and which factors will determine whether the idea is a success or not?

How is your business plan template?

Note: I created this question because I think this is an important factor that many people miss and would probably push a lot of ideas which lay around forever because people are not sure hot to begin the planning and or seeing whether the idea will work or not. Also, I answered a similar question but the question’s structure is causing it to become closed so I found the need to post this Q&A. I’m looking forward to see answers from you as-well. If the question looks to be too-broad then I’ll be happy to receive edits/suggestions which structure the question so that’s it’s within a decent frame.

Answer 116

Business plan

When it comes to developing an idea it’s a good start to create a business plan.

Your business plan is your make it or break it file which you fill with facts, goals and thoughts. It doesn’t matter if the idea is small or big, if you’re intending to create a company or not, it’s simply a summarized statement about your project.

The outcome of the business plan will eventually, if done properly, determine whether the idea can thrive or not.

This is more or less the template I work with:

Summary

This is your one-page summary of the business plan, a very short description about the project and summarized facts from the following chapters of the business plan. Your goal here is to get attention from the reader, you should always assume that the business plan will be read by potential investors and or mentors.

The project and it's main purpose

Explain the purpose of the project and how it will be an improvement to currently available solutions. Tell a little bit about the project’s current status (is it just an idea, is there some prototyping going on, etc), does it have a name yet? How is/will the solution hosted/stored?

Representative and management

Tell a little bit about the representative of the project and the project’s other management members.

Product and/or service & production

How is the product going to be? What service are you offering? How is the product going to be made?

Market and competition analysis

Do a research about the current market; see how many potential users there are and so on. Find out who your rivals are, compare your product/service to theirs.

Potential clients/targets

Describe who the targets are, how many are they and so on. How’s their social status?

Marketing plan

Make a short term and a long term marketing plan, where are you going to place ads and how many ads are you going to place? Are you going to make some other sort of marketing that’s not directly ad driven?

Sales plan & goals

Make a short term and a long term sales plan and or goals bases on your targets, it’s numbers and so on. Maybe you’re not going to sell anything to your users but you must explain your short and long term plan of income. Will there be ads instead of selling and so on?

Note: I find it useful to calculate the min and max income over a short and a long term period, if the min income is less than the expenses (which you cover later) then you might have to find another business plan for your idea.

The business model's assumptions

Explain why your business model is the chosen one, why are other business models not suitable here? Did you do any research that indicated what business model was the best and worst? Did you see how many users you’d get from each plan vs the income?

Implementation plan

Here you determine which process of the project will be done and for how long it takes to do it. I find it very useful to use a Gantt chart to achieve this, wherea the X-axis determines the time (in weeks or months) and the y-axis holds the processes. Each process then fills x-many time units determining how long it should take. This is important to let you think about the process and let others see how long the project is intended to take.

You can find decent templates online but I create my charts in excel.


An example of a Gantt chart explaining how long processes of a project will take

Budget plan

Here you talk about your assumptions, income and outcome of the project.

Assumptions

You have a potential amount of users, why are you assuming this number of users? Explain why you’ll be charging x much for your service, how it’s reasonable and so on.

Balance Sheet

Where does your initial budget come from? Are you providing the money or is there someone else?

Accounting's plan

Determine all income, outcome, expenses, salary, initial cost and justification and references for each case. Most importantly, show the final assumption ed profit by year (I prefer to show min and max).

Profit = Income - Expenses

Cashflow

Explain how the cash-flow changes by time, at least for what you know of. I’ll quote Wikipedia’s definition of a cash-flow:

Cash flow is the movement of money into or out of a business, project, or financial product. It is usually measured during a specified, limited period of time. Measurement of cash flow can be used for calculating other parameters that give information on a company’s value and situation. Cash flow can be used, for example, for calculating parameters: it discloses cash movements over the period.

SWOT analysis

A SWOT-analysis is where you find out your strengths, weaknesses, opportunities and threats. List them up in a table accordingly and you’ll soon see where you’re strong and weak points lie. Afterwards you explain what you’re going to do to fix your weaknesses.

An example of a SWOT-analysis.

Persons of interest

Who will have gain of the project? It’s users? How? Are you going to gain something out of this? Are your investors going to gain anything? Who is going to be harmed by your project? Will your rivals lose money?

People underestimate this part, you can find important roles that can either help you or may potentially try to ruin you.

Future view

It’s important to know where to start and have a limited frame to work in, but, you must be able to determine how your project might expand in the future. Would it be possible that your project can be extended abroad?

Attachments and additional files

List important files that contain information not specifically mentioned in the business plan, it’s okay to reference them though but it should be avoided if possible.

Bibliography

Reference everything there is to reference. Your business plan is suppose to be like an essay, if you can’t reference sources that provide your numbers then it’s not valid information. Do this from the beginning, you’ll regret so much to wait with this.

I hope I’ve given you something to work with. This is not a set of rules, it’s simply a guideline that you can modify depending on your projects and needs. Just make sure that you describe everything you know about the project, justify how your project is profitable and try to make your business plan be as interesting as possible. It doesn’t matter if you’re intending to get investors or not; making a good business plan is a key which you should create before starting any implementation.

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