Calculation of business plan

How to write a business plan?


The calculation of a business plan can be carried out independently or with the help of specialists working in consulting agencies or firms performing custom-made student work. Consulting agencies will help a novice entrepreneur to attract future investors, to determine the viability of a business idea. The student business plan is much simpler, so it can easily be done independently.

Structure and content

A business plan consists of such parts as:

  • The privacy statement, that is, that the information is not to be copied or used without the knowledge of the author. Rarely found in student work;
  • Summary with a description of the idea and method of the project. Indicates the necessary expenses for items, income, analyzes the need for credit funds. Here you can briefly indicate the economic feasibility of a business plan;
  • The purpose of the project, which describes the characteristics of a product or service, their difference from the products of competitors;
  • Market analysis, consumers, competitors. It is advisable to carry out segmentation, make a competitive map, consider development strategies;
  • Description of goods with an emphasis on the features of operation, certification, the package necessary for the release and implementation of documents.
  • The marketing plan is based on the 4P marketing mix, with a focus on promotion, pricing, advertising, and marketing methods.
  • Production with a phased description of the process, indicating the number of necessary workers, resources, equipment and their suppliers.
  • Organizational plan with a schedule for the implementation of the idea, indicating the responsible persons at each stage, the necessary documentation and costs. It is compiled at all times of production and sales.
  • Financial planning is based on the calculation of indicators of investment feasibility of the project, projected values ​​of income, expenses, profits. The calculation of a business plan itself involves determining the point of payback, the internal rate of return, the payback period and others.

Description of risks, indicating the method of their influence, methods of its minimization.
Applications consisting of documents that allow you to more fully judge the prospects of the idea

Calculation

Any textbook on investment management will tell you how to calculate a business plan on your own using such indicators as:

  • Monthly, annual and total costs and revenues, the amount of net profit, accrued taxes.
  • The quantity and price of products that must be realized so that the income covers the expenses.
  • Simple rate of return, which is the ratio of the planned profit and the cost of implementation.
  • The payback period, which is the ratio of the investment costs of the net flow of money received during the implementation. The term may be a month or a decade.
  • Net discounted flow is the amount of payments reduced to today and adjusted for the inflation rate. Independent calculation is made on the basis of the average deposit rate in the banks of the country.
  • Based on the net discounted flow, it is possible to calculate the profitability index, expressed as the ratio of discounted income to the sum of all investments.
  • In determining the internal rate of return independently, an interest rate is sought at which the amount of net present value is zero.

The business plan analyzes not only the simple payback period, but also the discounted one. In this case, the time value of money is taken into account.