In the first part of the article on business plan, I talked about the general trends of this important process for entrepreneurs. In the second, final part, we will consider business planning in a more practical sense.

Three Common Standards of Business Planning

1. EBRD

The European Bank for Reconstruction and Development (EBRD) occupies an honorable place among the largest investors in both the European region and Central Asia. This corporation attracts huge foreign capital, but also uses its own funds. External investments are used to develop and support already launched projects, to open new businesses and launch production. In business planning for a modern company, the EBRD places the main emphasis on financial analysis (SWOT analysis, accounting for borrowed funds). This is the most laconic business plan.

2. UNIDO

The abbreviation UNIDO stands for the UN organization that deals with industrial development. In the 1970s, it created its own methodology for assessing business projects. This development was aimed at providing developing countries with a tool that would improve the quality of investment projects, and industrial technical and economic studies — usually superficial and poorly executed — would become more standardized.

UNIDO first published this methodology in 1978, and it was then adopted as a world standard. It is proposed to design the development of a business idea as a three-phase cycle consisting of:

• pre-investment phase;
• investment phase;
• operational phase.

3. KPMG

The international network of KPMG agencies providing consulting and related services has developed its own methodology for drafting business plans. These plans are more for top managers than for external investors. Documents written in accordance with the KPMG methodology have a more elaborate and informative structure (from the perspective of the interests of the company’s managers and personnel).

Examples of business plans created by us

Stages of business planning

In any commercial project, a business plan is the main document that describes everything that affects its development and, ultimately, profitability. The basis of business planning is a thorough study of the consumer market. And here is the order of steps in drawing up a plan:

Stage 1: Prepare and collect data.

This refers to market information. Once it is collected, a working group is created that will create a plan.

Stage 2: Assess what material resources you have for developing the project.

This is not only equipment and materials, but also premises where production will take place and finished goods will be stored, office furniture, etc.

Stage 3: Form requirements for employees.

You need to determine how many people you need, what specialization, experience and level of education.

Stage 4: Set time frames.

Set the boundaries of each stage of the business plan.

Stage 5: Calculate costs.

An estimate is made with all the expenses for launching and further (for several years) development of the business.

Stage 6: Assess the risks for your area of ​​activity.

You need to consider the probable difficulties, problems during the development of the project, outline ways to solve them.

Stage 7: Make a summary of the plan.

Briefly summarize all the information about the project, key product characteristics, buyer profile.

Who to entrust business planning to

Where can you get a business plan? There are several options:

Write it yourself

This path is optimal if you are going to personally manage the company and develop the business. Then you need to study the project from the inside, delve into the details to thoroughly know how it all works.

• Advantages. When the manager has collected all the necessary data, understood the basics of his business and presents the project to investors, it is easier for him to defend this project, since he knows all its strengths and prospects. And investors, in turn, want to cooperate with those who are personally involved in project management. By drawing up a business plan yourself, you will have to figure everything out (and therefore immediately detect potential vulnerabilities of the project).
• Disadvantages. When an entrepreneur is poorly prepared, he will hardly be able to accurately calculate all the financial indicators. Be that as it may, try to plan the development of the business at least in general terms before contacting a specialist.

Download a ready-made business plan

This option has a right to exist when you are going to do business planning of the project on your own, but need guidelines and templates to rely on.

• Advantages. Coming up with the structure of the document from scratch when planning a business is definitely longer and more difficult than using a ready-made template. In addition, templates allow you to quickly delve into a new area of ​​​​activity.
• Disadvantages. No matter how wonderful a template you choose, it will need to be deeply and thoroughly reworked. There is a risk of using a completely inappropriate template and creating an unrealistic plan, or inheriting the errors contained in the template.

Contact a consulting company

This method of business planning is used by enterprises when the plan is intended for investors or banks, and it is not possible to calculate all the figures and take into account all the requirements on your own. For example, it is difficult to calculate NPV – the profit that the owner should receive, minus the costs and interest of investors, as well as inflation.

• Advantages. A consulting firm with extensive experience in drafting such documents provides services in the field of business planning at the highest level and calculates indicators very accurately. In addition, analysts will prepare recommendations that correspond to the financial model, list all the risks and important factors that should be taken into account.
• Disadvantages. There are none.

Examples of business plans created by us

10 business planning mistakes that can ruin everything

When creating a business plan, you should keep in mind the list of typical mistakes in project business planning. Here are the wrong steps that many managers make. Familiarize yourself with them to avoid such things in the future (and if you do screw up, at least you will understand that your problems are quite common).

1. The company does not have a business plan or ignores it. This is one of the gravest sins for an entrepreneur. Yes, planning is difficult, no one can give guarantees, and sometimes it is impossible to determine which decisions are right and which are not. However, it is the business plan that will become your support in the future, filled with the unknown and surprises.
2. The plan does not take into account the strategic goals and objectives of the business, values, mission. Such a plan is like traveling anywhere across rough terrain, without a clear understanding of the direction. Having ridden around the turns that take your breath away, you will find yourself at the starting point.
3. Neglect of customer needs. By doing this, you open the way for your sworn competitors. “The customer is always right” is not just a banal phrase, but the truth. It is surprising how many companies manage to ignore it, entering the market in full confidence that they know better than the consumer what he needs.
4. Underestimating rivals. If you do not study other fighters, you can quickly fly out of the ring. There are other smart, resourceful people in your niche selling the same products and services.
5. Low self-esteem, when the entire business planning system is built on the fact that competitors are doing everything better and more successfully. Do not ignore your advantages, actively use them to attract a buyer.
6. Incorrect assessment of the role of the budget in business planning. Until you balance the budget, it will not be clear what amounts and when to invest. A business plan consists mainly of work, the volume of which determines the budget. The plan helps to make informed decisions regarding finances.
7. Writing a business plan alone. Such a document, drawn up by one person, will be too one-sided, narrow. Involve other specialists (those who are authoritative for you), discuss different points of view.
8. Resistance to change. As a rule, people cling to the familiar and try to continue doing what they are doing now, and are afraid to change anything. It is not easy for a company to change its direction of activity or management methods. A quality business plan will allow you to prepare, mentally and otherwise, for the upcoming changes so that they do not catch management and staff off guard.
9. Fear of risk. While some invest their last money in obvious scams, others hesitate even before buying a lottery ticket. Whatever your attitude to risk, it is impossible to avoid it in the modern market, imbued with the spirit of competition. Any business is already a risk. And business planning is one of the methods of taming risk factors.
10. Lack of real incentives, rewards for staff. While the plan remains a stack of papers or a set of ideas in the head of the boss, it does not work. Only when all employees begin to implement it in their daily actions, the plan will begin to be implemented.

Resume

Studying the success stories of large corporations, we can see that competent and detailed business plans can be made in any conditions, including modern Ukrainian ones. A plan is a serious help for any commercial organization.

However, the specifics of domestic and foreign business planning differ significantly. The Ukrainian economy, especially in the conditions of Russian aggression, is not as stable as the American or European one, it is more volatile and more susceptible to crises. If in the USA and European countries, companies traditionally make business plans for 10-15 years (and sometimes even for 20-30), then for our companies this is an unaffordable luxury: you can more or less confidently plan your activities for a maximum of 2-3 years ahead.

We have been creating business plans for Ukrainian and international companies since 1994. Thanks to our business and strategic planning, many companies have been able to start new projects, receive loans and investments.