How to evaluate a business idea to develop a company
Why do you need a business plan?
Planning is a never-ending process for all companies. It is extremely important in the early stages of any venture when the entrepreneur will need to prepare a preliminary business plan.
There are different types of plans that can be part of any business operation. These include but are not limited to financial plans, marketing plans, human resource plans, production plans, sales plans, etc. Plans can be short or long term or they can be strategic or operational. Whatever the type of plan or function, plans serve an important purpose; to provide guidance and structure to management in a rapidly changing market environment.
A business plan, on the other hand, is a written document prepared by the entrepreneur that outlines all the relevant external and internal elements involved in starting a new business. It is often an integration of functional plans such as marketing, finance, manufacturing, and human resources. It also addresses both short-term and long-term decision-making during the first three years of operation. Thus, the business plan, or roadmap, answers the strategic questions of where am I now? Where I go? And how will I get there? Potential investors, suppliers, and even customers will request or require a business plan.
How I Prepared My Preliminary Project Proposal
In my case, I followed the following breakdowns by keeping each section as short as possible.
1. Background: In this section, I have established the context of the project by accounting for the problem you are trying to address.
2. State of the Art – Provided an overview of existing and emerging technology in the field, including a description of rival technologies and a comparison of the advantages and disadvantages of the various options.
3. Proposal: I have written an overview of the proposed project and the approach, that is, the activities I will undertake to achieve the project objectives. Clearly establish the research element or novelty component in the proposal.
4. Consortium: An overview of the proposed workforce and establish the capacity required to carry out the project successfully (eg skills, competencies, etc.)
5. Objectives and Deliverables: Identify (1) the objectives and (2) the deliverables of the proposed project.
6. Competitiveness: where appropriate, establish the competitiveness or advantages of the proposed solution compared to other solutions, already existing or under investigation.
7. Cost – Provide an overview of the cost of the project (including initial cost and working capital requirements).
8. Impact – This section should include:
Yo. Markets and Uses: identify possible uses and markets for the project deliverables.
ii. Benefits and Beneficiaries: Identify the beneficiaries of the project results (eg project participants, general public, third parties) and how they will benefit.
iii. Roadmap: Give an indication of what additional steps, efforts, costs, and timeframes are required before tangible benefits can be realized from the project deliverables or results (unless these are done within the life of the project).
IV. Indirect benefits: identify any secondary benefits of the project (for example, facilitating participation in funding programmes, improving Malta’s ranking, strengthening Malta’s reputation in a particular area, etc.)
Preparation of a detailed business plan
The stages of writing a business plan are: After deciding to undertake, before starting the business and when it is required to update it.
Business plans can be written for retail businesses, wholesale businesses, service businesses, manufacturing, and any other type of business.
A business plan is written by doing the following:
Identify all the questions that can be asked about the business.
Determine what additional information needs to be collected to answer all questions.
Obtaining all the necessary information.
Comparing various alternatives
Make a decision on each question.
A business plan must:
have a good appearance
Please provide an index
Please provide a summary
number each copy
Be signed to show who is sending it.
It depends on the nature of the business.
A business plan should be organized to include a cover page, table of contents, executive summary, business description, marketing plan, organizational plan, operating plan, financial plan, and appendices.
The outline of a typical business plan is as follows;
1. Title: Feasibility Study Report on______________________
Commissioned by_________________________
2. Project consultants
3. Table of Contents:
Executive Summary
The report
project background
Study objective
Project description and
loan advance
Promote
To lease
market and marketing plan
Potential customers
Competition
Prices
Sales Tactics
Publicity and promotion
Distribution.
Technical feasibility and management plan:
Factory
machinery
general expenses
packaging materials
Raw materials Labor and labor costs.
Projection/financial feasibility:
Capital Requirement Overview
Financial plan
Projected Cash Flow
Projected profit and loss account
Projected Balance
Analysis break-even point
Origin and application of funds
Organization Plan:
property form
Identification of partners/main shareholders
Authority of the Principals.
Management Team Background
Roles and responsibilities of the members of the organization.
Risk evaluation:
Assess the weakness of the business.
new technology
Contingency plans.
Schedules:
12 months of projected sales
12 month projected purchase
Fixed assets and depreciation schedule
Profitability index.
Thank you for reading