Business Plan
Business plan; from idea to growth
To sum up, a good business plan matures a business idea into a viable business idea. Even the preparation of a business plan guides you to consider the details, risks and development path of your business, and to calculate its profitability before you start the actual operation. With a good business plan, potential pitfalls can be avoided as far as possible.
A well-drafted business plan also gives outsiders a clear picture of the company’s operations, profitability and prospects – which is often necessary, especially in the early stages of a business. For example, a good business plan can show why a new business should be granted a loan, public subsidies or other external funding. A light and free-form business plan can be drawn up by answering the following five questions as well as possible, according to the Finnish Entrepreneurs’ Association:
- Business idea: Describe your business idea in a few sentences. What products or services do you sell, to whom and how? How do you stand out? Who are you competing with?
- Customers: who are your customers? How do you get in touch with them?
- Products and services: what is the demand for your product or service? What need or problem do they address?
- Money: what are all the ways you can make sales and money for your business? How do you price your product or service? What is your pricing based on? How many sales are you aiming for per day, week, month or year? You can visualise this in terms of products sold or number of customers, for example.
- Risks: what are the risks involved in your business? What could happen if they do? How can you prepare for risks? For example, you can use a SWOT analysis to help you identify risks. This lists the strengths, weaknesses, opportunities and threats of your business.
The business plan should also take a stand on skills: what skills does the entrepreneur or company already have in the early stages, what kind of skills are needed? In addition to your strengths, it is also important to identify your weaknesses honestly. Then they can be taken into account, and an effective plan can be built for them.
As part of the process, and before you start, it is also essential to find out if there is a demand for your business idea by asking potential future customers about it. It is important to find out whether your idea meets customers’ needs and expectations, what they would be prepared to pay for it, and whether they would be prepared to choose your idea over others. If the idea does not yet meet customers’ expectations, it is easy to refine it before you start – afterwards it is much more challenging.
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