BUSINESS OR FEASIBILITY PLAN

Accelerate your business with these expert tips on "Business plan, feasibility". Analyse and discover this TIP!

In order to create your company, it is necessary to first carry out an analysis of the feasibility of a project. To do this, it will be necessary to draw up a feasibility plan that gives solidity and credibility to your idea. In practice, the business plan is a projection of how you think - or dream - your new business will evolve in the future. 

It is therefore usually a rough, and almost always over-optimistic, benchmark, which a financier's or investor's analysis will take care to reduce to a more realistic scale, and if it does not do so, the market will soon do so!

In fact, very few business plans survive the first contact with the real world.

Investors (business angels) use this valuation rule for the business plan which, with some derision, states that: 'a business plan of 48 pages is worth 48.5 times the price of the paper it is written on".

That's about what it's worth, adding up paper, ink and all the other stuff.

For the investor, the important thing about a business plan is not so much the data it contains as the mere fact that the entrepreneur has prepared it, as this implies that he has studied the market - good or bad, that will have to be judged - and the whole environment that affects and in which his project is framed.

You cannot embark on a journey, at least not one as important and crucial as setting up a business, without a map, even if the map alone is no guarantee that you will arrive at the intended port, nor that the journey will be as you thought it would be.

As we all know, the map is not the territory. On the sea you must necessarily move with charts, although conditions will tell you whether or not you have to turn here or there and whether or not you have to change course. As General Eisenhower said in another context: "in battle you realise that plans are useless, but that planning is indispensable".

Although there is no shortage of people who say that most business plans should never have been written, the truth is that they were still very useful and meaningful until recently, when the economy was more static. Now, companies and the entire economic fabric are in continuous transformation and the key to growth is no longer just to have more customers, but to offer them as accurately as possible what they are looking for.

Because recently, especially in internet businesses, the business plan has been losing its relevance and usefulness, it has become necessary to find new tools for business analysis and planning.

Among them, the most common and useful today is the Business Canvas Model.

Characteristics of the business plan

A feasibility plan is a document in which the entrepreneur establishes the general lines of planning, evaluation and control of the main aspects of his business, from the initial business idea to the start-up of the business activity. This document is an essential part of the business plan or business plan. This is essential, especially in the search for funding or investors.

This document should include all the numerical data that will allow us to know the costs, income and benefits in order to evaluate the profitability of the project.

Content of the business plan:

• Conceptual development of your product. At this point it is advisable to confront the contributions of your product with the needs of the market and see if it has a place and if its commercialisation is viable.
• Study of market. Prior knowledge of the market is essential for the success of a business venture.
• Knowing the status of your competenceThe consumer's behaviour and the situation of the market in which you are going to operate is essential in order to be able to understand the environment and make the necessary adjustments accordingly.
• Strategy market. At this point it is necessary to define the product and sales strategy (channel, cost structureincome formula, etc.)
• Analysis financial. Essential for determining the financial and economic viability of a project: 

• • In order to get an accurate analysis, it is necessary to calculate the amount needed to start up the activity, taking into account own and third party investment.
  • It should be noted that a project will be feasible when the investment budget is covered by the financing budget, profit is made and liquidity is available.

• Calculation of the balancing point. By doing this simple calculation, which will tell you when your business will start to make a profit, you will make your viability plan a more solid document.

Advantages of the Feasibility Plan

A feasibility plan makes it possible to see what the entrepreneur has in mind and to check if there is coherence, weaknesses, strengths etc.

• Completing all the content forces the entrepreneur not to forget anything, and prevents him/her from focusing only on what he/she has mastered or what is easier for him/her.
• Sorting and gathering all relevant information in a single document avoids dispersion of data and helps to make better decisions.
• Having it created makes it easier to present it to funders who require it, such as banks and public administrations to provide subsidies.
• It helps to create a start-up plan with the necessary steps to avoid getting lost along the way.
• It focuses efforts on the same project and has a global perspective on the different alternatives.

By making the business plan, you identify opportunities to innovation in the product or in the process, possible automations to reduce costs or make the model scalable in the future, future possibilities for product and customer (market) diversification.

WHEN SHOULD I MAKE MY BUSINESS PLAN?

When I am starting with an idea or it is very innovative and there is a lot of uncertainty the business plan is not very practical to subject it to many changes, it is better to have the CANVAS more or less complete first. I recommend that from the beginning of your project you create a doc document in drive and create all the typical sections of a business plan. 

As you discover interesting information, incorporate it into your drive. For example, if you find something good on Google, copy and paste the url in the corresponding section. From the alarms created in Google alert for keywords you can receive links that will add value to your analysis, don't lose the info, and take it to your business plan!!!!

The Internet has so much information that it's hard not to get lost! After a few weeks' progress, tidy up your business plan so that the things that are essential for the successful implementation of your new business will appear.