Simplified Business Plan: A Step-by-Step Guide
Simplified Business Plan
Introduction
This document helps you, the future entrepreneur, gather information to assess the feasibility of your business idea. Its effectiveness depends on the reliability of the data collected. Analyze the strengths and weaknesses of your future business. Remember: your role as the entrepreneur is critical to the venture’s success.
What is a Simplified Business Plan?
It is a preliminary study that assesses the advantages and disadvantages of starting a business.
What is it for?
- Anticipate difficulties that would only be seen in practice.
- Decrease risk and increase the chances of success.
- Allow a better understanding of the business.
- Organize and sort ideas and actions related to the business.
- Allow multiple simulations without financial loss.
- Demonstrate organization, perseverance, and integrity in business.
- Attract potential partners, suppliers, and investors, and help in negotiating financial resources.
What questions can it answer?
- How much do I have to invest?
- What will I gain?
- What resources are needed?
- Who are my customers, suppliers, and competitors?
- What are the taxes?
- Is it generally worth it?
Consumer Market
Definition:
These are the people and companies that consume your product or service.
Questions to be answered:
- Who are the customers? To whom will I sell my products and services?
- How many are there?
- Where are they located?
- What price do they currently pay for similar products or services?
- How much do they consume, and how often?
- How much can be sold in this market?
- What level of quality is required for this market?
- Why should they buy my product?
- Is the chosen location for the company correct?
Market Competitor
Definition:
These are those who meet or can meet the needs of the customers that your company wants to reach.
Questions to be answered:
- Who are the competitors (direct and indirect)?
- Where are they located?
- What do they sell, and to whom?
- What is the quality of products or services offered by them?
- What prices and deadlines do they practice?
- What are the strengths of your competitors? (Price, quality, duration, exclusivity, service, location)
- What are the weaknesses of your competitors? (Price, quality, duration, exclusivity, service, location)
Remember: Competition is healthy and also serves as a benchmark and potential for partnerships.
Suppliers
Definition:
These are the people and companies that supply raw materials and equipment to be used for manufacturing or reselling the product.
Questions to be answered:
- Who are the suppliers, and where are they located?
- What materials, supplies, and goods are needed?
- What prices and payment terms do suppliers offer?
Products and Services
- What variety, quality, packaging, presentation, size, services, and related guarantees will be provided?
- What is the status of products/services: available immediately, developing, nonexistent?
- What customer need will it satisfy?
Marketing and Sales
Definition:
These are the communication strategies for disseminating the products or services and distribution channels.
Questions to be answered:
- What ways of disseminating information will your company use?
- What distribution channels will your company use?
Technical and Operational
- What will be the initial production/service volume?
- What will be the initial supplies of raw materials? How will they be stored?
- What are the functions, and who will perform them in the company?
Layout
Definition:
Layout corresponds to the arrangement of several jobs in the spaces provided in the organization, people at the workplace, according to the nature of the activity performed, the arrangement of furniture, machinery, equipment, and raw materials.
Questions to be answered:
- Where are the flows of processing or manufacturing processes?
- What is the usable space available?
- What is the physical layout of jobs?
- What is the movement of people, products, materials, and documents within the company?
- Will the environment be favorable for work and increased productivity?
- Will there be a comfortable situation for customers and visitors?
- What are the restricted areas?
Remember: Do not forget the special needs of the disabled!
Legal and Tax Issues
Definition:
It is the compliance of company law with regard to taxes, fees, permits, and regulations concerning your business activity.
Questions to be answered:
- Are there specific regulations to be followed in this field?
- Are there regulations or regulatory officials to attend to (health surveillance, specific grants, technical standards)?
- Are there possible privileged frameworks (Simple National or Super Simple, presumed income)? Which would be more beneficial?
Fixed Investment
Definition:
It is the amount of resources required to implement the entire physical infrastructure of the project.
- Must be programmed to meet the needs of the company.
Instructions:
- Please list the necessary resources that will be purchased by the company.
- Depreciation will be calculated automatically; simply place the corresponding percentages.
Recommendations:
- The purpose of business is to produce/sell/provide services and not freeze resources. Avoid unnecessary detentions. When possible, rent rather than buy or build.
- Outsource what you can, instead of acquiring machinery and equipment.
- Make the investment knowing that the funds you are using are sufficient and necessary.
- Search for options to purchase (auctions, classifieds, used shops). Beware of the state of preservation and security.
Manpower
Definition:
Establishes any need for professional office/function, quantity, and value of wages to be paid.
Instructions:
- a) Relate to the job/position to be occupied.
- b) Record the amount required according to function.
- c) Register the salary to be paid, no social charges, only the salary backlog. Check with the union.
- d) Record the value of transport, food, health plan, food assistance, etc.
- e) Mean percentage of charges.
Recommendations:
- To recruit professionals, consider specialized companies, entities generating manpower, trade unions, etc.
- Check the curriculum/history of candidates.
- Remember to consult the class unions (legislation, agreements, floor time, etc.).
- Be careful with informal hiring.
Fixed Operating Costs
Definition:
These are all costs that occur regardless of the amount of sales/production of the company.
Instructions:
- Withdrawal of the partners is the salary of a partner who works in the company. Answer: what will they earn to make this work?
- All figures should be on a monthly basis and, at this stage of the study, estimated.
- Be careful with values such as advertising and insurance; it should be proportional to the month, e.g., insurance has annual coverage, you should divide the total by twelve months and release the figure for the month.
Recommendations:
- Remember: average values should be estimated, but use common sense by avoiding exaggerating up or down.
Estimated Sales and Costs
Definition:
These are the sales and product costs that you estimate will be made (monthly).
Instructions:
- a) Describe all products/services or groups that comprise the company’s activity.
- b) Enter the unit sales (e.g., units, boxes, dozens).
- c) In the unit size, equipment, and manpower, estimate the quantity for each product/service to be produced/sold during the month.
- d) Consider the cost of materials/goods for products/services to be marketed by the company.
- e) Calculate or look up the sales prices that you intend to use in the marketing of each product/service.
Recommendations:
- Research market prices/consult costs with competitors and suppliers. Avoid guesswork.
- Estimate quantities without exaggeration; be realistic.
- In businesses that involve large numbers of differentiated products, separate groups of products.
Variable Costs
• Definition:
The following are all costs that is directly related to sales, ie when there is product sales, these costs relate to the operation.
· Recommendation
· Find an accountant you trust to help you.
SEASONAL SALES
• Definition:
° is the change, up or down, the sales of your company.
° Recommendations:
· Remember: average values and should be estimated, but should use common sense by avoiding hype up or down.
SEASONAL SALES
INSTRUCTIONS:
· Estimate the variation in sales every month, noting that the first months of operation of the business is natural that sales are low. Note the business sector in which it operates. It is natural that an ice cream selling less in the winter and summer sales above the annual average. Consider also the service capacity, production capacity of your company in anticipation of the indices. Be careful not to “overestimate” the sales because it will be an expectation not attainable.