Business plan for start-ups: the most important points
In the previous article we talked about how to create a start up in Italy and the importance of a business strategy, which accurately indicates the market objectives to be achieved in a specific time frame and the expenses necessary to pursue them.
The importance of the business plan in the initial start-up phase
In the initial phase of a start-up it is necessary to objectively analyze the real potential of one’s business idea and, once the feasibility of the project has been ascertained, set the most effective strategy and operational/financial plan for achieve the set goals.
To do this, the entrepreneur must prepare the business plan, a program that describes in detail the gradual and sustainable development of the start-up, from its establishment to the placing of the product/service on the market.
It is also considered a fundamental document for obtaining start-up financing or incentives, as well as for attracting potential investors interested in the project.
How should the business plan be prepared?
The business plan must always be drawn up in a clear, understandable and truthful way. A business plan written in a confused way or with too technical language, in fact, risks being counterproductive and driving away potential investors.
Furthermore, the program must always include:
- an index, which lists all the sections present within it;
- the attachments (numerical data, diagrams on market surveys; product data sheets; quotes from suppliers, etc.), which confirm their content.
Finally, to draw up an effective business plan, it should be divided into two parts:
- DESCRIPTIVE, in which the project is illustrated, the reference market analyzed and the resources necessary to reach the pre-established target indicated.
- ECONOMIC-FINANCIAL, which illustrates the economic, equity and financial projections already analyzed in the first part. In particular:
- the Provisional Income Statement for the next 2/3 years, in which the forecasts of all expected revenues and costs (fixed and variable) to be incurred must be reported;
- The forecast balance sheet for the next 2/3 years, i.e. the indication of the origin of the capital and how it will be used).
- The budgeted financial flows (cash flow).
- Indices of development, profitability, liquidity and solidity.
The 7 fundamental points of the business plan
The descriptive part of the business plan is generally divided into 7 points:
- The executive summary, which briefly describes:
- the birth of the idea behind the project and the needs that the product/service aims to satisfy;
- the current situation of the reference market (products, technologies available, etc.) and the characteristics of current competitors.
A start-up, in this section, should highlight the main criticalities (or needs) of the market in which it intends to launch its product/service and the innovative effects (or benefits) in the short/medium term that the latter intends to bring.
- The description of the start-up, which must indicate:
- the (brief) history, the services offered, the structure, organization and locations of the start-up;
- the composition of the entrepreneurial team and a brief description of each member (role, experiences, motivations, etc.);
- the strengths compared to competitors (eg: possession of patents, high percentage of personnel employed in research and development, unique characteristics of the product or service, strategic location, etc.).
- The description of the product or service: the main characteristics and what distinguishes it (or makes it unique) compared to that of its competitors; the effects it aims to generate on the market, in the short and medium term, etc.
- The Market analysis: to estimate the real chances that the product /service will have once placed on the market, it is necessary to report the results of the research carried out on:
- the reference market: the regulations governing it, the macro-economic data (demand trend, growth rate, etc.);
- the target (generally consumers): socio-demographic and geographical characteristics, lifestyle and preferences, purchasing capacity, etc.;
- the main characteristics of competitors and their products/services (pros and cons, prices, assistance, etc.).
- The marketing strategy: in this section it is necessary to indicate the business model that the start-up intends to adopt to enter (and then establish itself) on the market, retain new customers and expand its network. They will therefore be described:the philosophy and mission of the start-up;
- the methods of procurement, production, supply, distribution and any storage;
- the sales/distribution policies of the product/service (prices adopted, sales network, marketing agreements);
- the methods of communication and promotion of one’s product/service (advertising media and channels).
- The operative plan, which illustrates in detail how to implement your marketing strategy.
- The organizational structure: the corporate and organizational structure of the start-up will be indicated in this section. In particular:
- the head office and secondary offices, as well as the business sectors of the start-up;
- the qualifications, functions and skills of the shareholders, directors, employees and any collaborators, for the purpose of achieving the corporate objectives.
The importance of legal and tax support
Now that we have analyzed the fundamental points of each business plan, it is good to focus on the most relevant issue that afflicts every entrepreneur in the start-up and development phase of the start-up: am I able to draw up the business plan?
The choice of external professionals (lawyers, accountants, market analysts, etc.) and the related costs to be incurred for advice and assistance in preparing the program are certainly the biggest obstacle, especially in the start-up phase. Furthermore, the “tempting offers” on the web always omit hidden costs and are not synonymous with reliability. Then? What is the solution?
Our advice, especially in the initial phase, is to rely on serious, qualified professionals with proven experience in consulting for start-ups, since the costs incurred for an effective business plan will certainly be lower than those that will derive from a wrong strategy prepared autonomously.
Our law firm, thanks to the expertise and experience in the field of consultancy and assistance to start-ups, both in the legal, commercial and corporate fields:
- provides all entrepreneurs interested in starting their own start-up or defining an optimal business strategy, advice and specific assistance in bureaucratic and commercial practices;
- assists its customers in the market analysis phase, in the preparation of the business plan and in the search for the economic resources necessary to finance the start-up;
- supports the company at every stage of development, recommending the best commercial and legal strategies to be implemented.
Contact us immediately at the numbers + 39 0683521985 or +39 3711453121, or write to us at email@example.com for specific advice.