The successful company is not born by chance. The successful company is built on a table. Brick by brick. How to do it with houses. The project is read and the works are started. Then stop for a moment. Take a look at the project and start working again. Here, this also happens with the company. That project has a name: business plan. I’ll tell you how to create a successful business starting from the business plan.
An element that should never exist within a company is improvisation. You can’t think of improvising and getting a successful business out of it. The successful enterprise must be carefully thought out, studied and built at the table. It should be built as if it were a dwelling, brick by brick, and as such, before its construction, numerous aspects must be evaluated. We need to have clear ideas even before laying the first stone. This is what we need to do even when we want to build a successful business: we need to think about business; draft a feasibility study; provide, as far as possible, the revenues that can be achieved and the costs that will have to be incurred; identifying the breakeven point, i.e. the moment in which the company will cease to produce losses and will begin to generate profits. And, as for the construction of the house, everything translates into the realization of a project complete with data, information and floor plans. This is also true for the construction of a company: the business idea must be included in a strategic document for corporate life that takes the name of a business plan.
The probability of survival of companies with a winning business plan is 70-75% higher than in an improvised company. A good business plan, therefore, in addition to creating a new business, allows the establishment of a good company, that is, a company capable of consolidating itself over time.
Before starting up the business, it is necessary to submit the business idea to a feasibility study in order to evaluate its economic and financial convenience. In this context the business plan assumes a role of primary importance since it allows the definition of rules to which the entrepreneur must necessarily comply in order to achieve the results. Periodically, then, checks and controls must be carried out to monitor the progress of the activity.
Today’s markets are increasingly subject to uncontrollable turbulence. It is therefore necessary a tool that is able first of all to photograph the real economic situation and subsequently transmit to the entrepreneur a series of useful information to identify not only his own strengths and weaknesses but also the opportunities and threats that characterize the market. With a vision as clear as possible, the entrepreneur is able to intervene promptly if necessary. No improvisation, therefore, but a specific business plan capable of tracing the entrepreneur’s operations.
This is where the business plan comes into play, the only tool able to trace the path that the entrepreneur must follow in order to achieve revenues. The comparison between the data contained in it and the final data deriving from the management of the company reveals any deviations from the expected results and, in this way, allows a precise verification and a continuous control of the management performance.
The business plan assumes, therefore, maximum importance in the start – up phase of the business activity: proof of feasibility and economic and financial convenience can only be deduced from the preparation of a business plan. In the pre-boot phases, the business plan is useful for communicating the business idea to third parties such as investors or financiers. With the business plan for financing, in fact, it proves to be able to return the financed capital in the time and in the ways established by the agreement. Furthermore, we offer food for thought about the profitability of the company and its degree of reliability. Therefore, to be effective, the business plan must be complete, understandable, consistent and credible.
To write a complete business plan, the following points must be respected …
- Company organization: The legal form of the company, the profile of the entrepreneur and the partners, the collaborators with their respective personal and professional qualities should be indicated;
- Market research and marketing: It represents an analysis of the market in which the company intends to operate as well as the target customers to whom it intends to turn. It is good to highlight the opportunities that the market offers and the threats of the surrounding environment with specific reference to current legislation and competition;
- Economic-financial plan: Represents the verification of the economic-financial feasibility, the investments necessary for the start-up of the activity, the financial requirement and the relative sources of financing.
A winning business plan must be understandable. The business idea that the entrepreneur has in mind is certainly clear. But not for this reason it will be equally clear for the subject to whom the business plan is destined. Although the business idea may be brilliant, if a business plan is not understandable, the company will never get the necessary funding and the idea will inevitably be discarded. Consistency and credibility occur when the strategic choices identified are in line with the business activity and when the business plan is complete with all the elements that allow assessing the degree of risk faced by those who choose to finance the company.
The current legislation does not provide a standard business plan scheme nor the mandatory information to be included since there are so many types of activities that identifying a checklist of information to be entered would be impossible.