A business plan is a detailed description of your project, complete with calculations and a forecast for the next few years. It is essential for potential investors, banks when applying for a loan, partners, intermediaries, your team, and ultimately, for you as the project creator.
Business plans are typically written for three to five years ahead. However, a one-year plan can also work, as economic conditions change rapidly.
The Main Goal of a Business Plan
The primary purpose of a business plan is to convince potential partners that your project is a promising investment that will pay off in terms of both money and effort.
If you have come up with an innovative business idea, you will need to draft the business plan yourself.
A business plan includes a description of the product or service, market analysis, production plan, company structure, marketing strategy, and a financial plan that consolidates all key calculations. It must answer critical questions: How much money is needed to launch the project, and when will it break even?
Executive Summary: The Key Takeaways
The executive summary appears at the beginning of the business plan but is written last. Just like a description of the pragmatic free play game, it provides a concise overview of the entire document, summarizing the conclusions drawn from detailed calculations. Investors will read this section first to decide whether your plan is worth further consideration.
This section should briefly describe the project, its competitive advantages, and information about potential customers and partners. Explain how you plan to sell and promote your product or service. Specify the required startup capital and where you intend to source it. Outline key development stages, the estimated payback period, and projected profitability.
Example: Business Plan for an Online Chocolate Store
Let’s consider how to create a business plan using an online chocolate store with delivery in a small town. Unlike competitors, this store will allow customers to choose their own unique fillings, designs, and packaging through a special online configurator.
Product Description
This section provides a detailed description of your product or service, along with an analysis of its potential.
You can compare your product to similar offerings in the market and suggest improvements to enhance its appeal.
Market Analysis
Transfer your market analysis from your business strategy into the business plan, diving even deeper into competitor offerings.
For an online chocolate store, competitors include not only other online sweet shops but also bakeries, gift stores, supermarkets, and independent confectioners.
- Supermarkets: The city has five major supermarkets offering a wide variety of chocolates, accounting for 55% of total chocolate sales.
- Bakeries: There are 50 confectionery shops, five of which operate online. Ten sell only chocolate, but just one has a website. This segment holds 25% of the market.
- Gift Shops: There are 30 online gift stores, making up 10% of sales.
- Independent Online Sellers: Around 20 profitable private chocolatiers, capturing 10% of total sales.
From this analysis, determine your potential market share.
For example, you might estimate that within three years, your online chocolate store could capture 35% of online chocolate sales in the city.
Target Customer Profile
Clearly define your target audience instead of saying "everyone"— that would be too broad. During your business strategy development, you should have identified your ideal customers.
For an online customizable chocolate store, your target audience might be creative buyers who appreciate unique products. They would likely value the ability to create their own chocolate flavors and packaging. If they make up 20% of all online sweet shoppers, this could translate into 2,500 chocolate bars sold per month within a year of launch.
Production Plan & Cost Calculation
To calculate costs, consider:
- Direct expenses: Raw materials, ingredients, and packaging.
- Labor costs: Employee salaries per unit of production.
- Indirect expenses: Rent, utilities, and equipment maintenance.
- Marketing costs: Advertising and promotional activities.
- Financial expenses: Loan interest or investor returns.
Initially, you may plan to produce the chocolate yourself. Calculate the cost of ingredients per bar (cocoa, milk, sugar, etc.). If you need a production space, divide the rent by the number of bars you plan to sell monthly. The same applies to equipment costs, such as refrigeration units — break down the monthly cost per chocolate bar. Apply this method to all expenses.
Marketing Strategy
The goal of your marketing strategy is to successfully launch your product and capture your market share.
Key questions to address:
- What is your value proposition?
- This includes not just pricing but also added benefits such as free delivery, discounts, and special offers.
- Which sales channels will you use?
- These can include direct online sales, partnerships, and affiliate programs.
- How will you boost sales?
- Consider loyalty programs, discounts for repeat customers, and membership cards.
- What advertising strategies will you implement?
- Options include paid ads, influencer collaborations, blog content, and social media contests.
For example, you could price standard chocolate bars at $2 and customized bars at $5. To encourage sales, offer a deal: Buy two bars, get the third free. Later, introduce a customer loyalty program with a bonus card system.
Since your business operates online, most of your marketing will be digital-first. However, you can also participate in local events, sponsorships, and collaborations.
Potential partners could include a local flower shop or beauty salon. They can promote your chocolate through their networks, while you offer discounts or coupons for their services in return.
Organizational Structure
This section outlines your company’s structure.
Define your company’s departments, reporting hierarchy, and staffing requirements, specifying roles and wages. Clearly establish responsibilities and interdepartmental coordination.
For an online chocolate store, operations can be streamlined with remote employees. Key personnel include:
- Website developer.
- Copywriter.
- Customer service representatives.
- Delivery couriers.
- Part-time accountant.
In the early months, when sales volume is low, you may handle production, order processing, and deliveries yourself to cut costs.
If you plan to partner with external manufacturers or resell other products (e.g., greeting cards with chocolate), outline those agreements in this section.
Financial Plan
Your financial plan should include funding sources, projected revenues, and all expenses — both fixed and variable.
Think ahead about how you will fund your business.
- How much of your own money can you invest?
- Will you need external financing? (e.g., bank loans or microloans)
- Will you seek investors? If so, they may require a stake in the business.
By outlining these financial elements, you can determine:
- How much capital you need to launch
- When your business will break even
- How soon you can recover your investment
A well-structured business plan is your roadmap to success. It not only helps secure funding but also provides clarity on strategy, operations, and financials — ensuring your business starts on the right foot.
