Business plan

The Business Plan is a document in which a new business or project focused on one or more products and / or services is presented or proposed. In this document, the objective (s) set in the approach to the new business are considered, analyzed and evaluated. Therefore, it will be very important to include, in detail, the human capital requirements; of material resources such as machinery or equipment; the marketing and sales strategies, as well as the investment required to finance the start-up of the project.

Generally, when preparing a Business Plan, the mistake is made of starting with the financial section, when in reality this should be the last to be carried out. Since important and necessary costs, expenses or investments for the development and implementation of the business can be omitted; and in the end having to force the information to be consistent with the financial development that was wrongly developed first. Causing a project to be carried out that will not be able to achieve its objectives and therefore ends up being a project or business where all its participants lose.

Due to the aforementioned, it will be important to write this document completely, before making any investment. And likewise, the order indicated below must be followed in the development or preparation of the Business Plan.

Part I – Organizational Plan

This section of the Business Plan begins with a brief description or summary of the business or project that the document proposes to carry out.

Subsequently, it must include a section where the product (s) or services that will be offered to the market are indicated. The way in which these products and / or services will be produced must be indicated; and where appropriate, indicate in detail each one of them, as well as their production processes. In the event that special facilities, machinery or equipment are required, each of them must also be indicated in detail.

The next section should focus on the part related to the administration and personnel of the business. In relation to the heads of each of the business areas, the professional history of each of them should be included. A possible organization chart must also be presented, indicating the areas of the company, as well as the jobs of each one of them. The annual costs of wages and salaries, as well as the various employment benefits, should also be included.

Define whether your own accounting and legal areas will be used, or whether these services will be contracted to external companies. And in the case the cost that this will imply.

A section should be included that indicates the location of the business, that is, in which region and in which city the office (s) or plants that the project or business will require will be installed. The approximate cost or investment necessary for the premises, offices or required plants must be indicated.

It must also include a part related to the type of legal structure, which will be used to carry out the business or project, that is, if any type of commercial company of those contemplated by law will be used, or is it a civil society or association , etc. Must include the costs that will be necessary to incur to formalize the type of legal structure chosen.

The next section within this section must include everything related to copyright, in case you are considering using registered patents to carry out a process in the business or proposed project. As well as its respective cost.

Finally, a section on possible insurance should be included, in order to protect key personnel, processes and / or assets that may be appropriate, as well as their possible costs.

Part II – Marketing Plan

This section of the Business Plan begins with a description and objectives of the marketing strategy for the business or project to be carried out.

A section should be included where a market analysis and the results of said analysis are carried out. It is extremely important to fully identify the target market, as well as the main competitors, what strategies they are carrying out and what participation each of them has. Identifying possible trends in the market will also be of great help. In market analysis, it will be very useful to apply the 4 rules for successful sales:

1. Find potential customers who want our product or service
2. Identify customers who are ready to buy
3. Let customers know that we can meet their needs
4. Find paying customers

The next section within this section will be the content of the marketing strategy (s) for the business or project. It will be important to include a general description, the selected distribution channels, where appropriate the packaging, pricing policies, brands, sales strategies, advertising and promotions; and finally public relations. For each of these subsections, the cost or investment that will be dedicated to each of them must be identified.

The marketing plan should include a section focused on customer service, so that buyers have where to file complaints, queries or request help with the product or service purchased. If the need for a customer service area is considered, the costs inherent to that area must be considered.

Finally, a section relating to the evaluation of marketing effectiveness should be included. Since it will be necessary to evaluate the results of the Marketing Plan to carry out the necessary adjustments. It will also be necessary to identify the costs and expenses necessary to carry out this important section.

Part III – Financial Plan

This section begins with a brief analysis or explanation of whether the business or project should be carried out through a new business or an existing one. This section is also intended to help identify the need to contract or not some type of financing.

A section should be included that presents the financial needs, where it is stated how much will be through shareholder investment and how much through financing. And, where appropriate, present a calendar of contributions from investors and / or the provisions of resources from financing.

Subsequently, it must present a section with proforma financial statements (projections), which must include balance sheet, income statement, cash flow; and breakeven analysis. The projections must be made, at least, for 5 (five) years; and they must be shown by quarters, or by each month. All information to prepare these projections must be obtained from sections I Organizational Plan; and II Marketing Plan, where all the concepts and amounts for investments, expenses and costs that will need to be incurred must be found.

Finally, it must include a financial analysis section, where the projected financial statements (Balance Sheet and Income Statement) will be analyzed.

Part IV – Supporting Documentation

This section will include any document that supports the information contained in the Business Plan in any of the first three parts. At least it must include the professional summaries of the main managers that the company or project will have, credit reports, letters of recommendation, market studies, articles related to the product or service offered, contracts or legal documents, etc.

At TecFin & Partners we want this document to be of use to you in preparing a Business Plan. If you require any kind of explanation or additional help, please write tocontact@tecfin.mx and in the subject of the email, indicate Business Plan and one of our associates will contact you to try to help you.