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How to evaluate a business idea to develop a business

Mar 23, 2021
business idea

Why do you need a business plan?

Planning is a never-ending process for all companies. It is extremely important in the early stages of any business when the entrepreneur will need to prepare a preliminary business plan.

There are different types of plans that can be part of any business operation. These include, but are not limited to, financial plans, marketing plan, human resource plan, production plans, sales plans, etc. Plans can be short or long term or they can be strategic or operational. Whatever the type of plan or function, plans serve an important purpose; provide guidance and structure to management in a rapidly changing market environment.

A business plan, on the other hand, is a written document prepared by the entrepreneur that describes all the relevant external and internal elements involved in starting a new company. It is often an integration of functional plans such as marketing, finance, manufacturing, and human resources. It also addresses both short-term and long-term decision making during the first three years of operation. Therefore, the business plan, or roadmap, answers the strategic questions of where I am now. Where I go? And how will I get there? Potential investors, suppliers, and even customers will request or require a business plan.

How I prepared my preliminary project proposal

In my case, I followed the breakdowns below keeping each section as short as possible.

1. Background: In this section, I established the context of the project by accounting for the problem it is trying to address.

2. State of the art: I provided an overview of existing and emerging technology in the field, including a description of rival technologies and a comparison of the advantages and disadvantages of the various options.

3. Proposal: I wrote an overview of the proposed project and the approach, that is, the activities that I will carry out to achieve the project objectives. Clearly state the research element or novelty component in the proposal.

4. Consortium: an overview of the proposed workforce and establish the capacity required to carry out the project successfully (eg skills, competencies, etc.)

5. Objectives and deliverables: Identify (1) the objectives and (2) the deliverables of the proposed project.

6. Competitiveness: where appropriate, establish the competitiveness or advantages of the proposed solution over other solutions, whether they exist or are being investigated.

7. Cost – Provide an overview of the cost of the project (including initial cost and working capital requirements).

8. Impact: this section should include:
me. Markets and Uses: identify possible uses and markets for the project deliverables.

ii. Benefits and Beneficiaries: Identify the beneficiaries of the project results (eg, project participants, the general public, third parties) and how they will benefit.

iii. Roadmap: Give an indication of what additional steps, effort, costs, and timelines are required before tangible benefits can be realized from the project deliverables or results (unless these are completed within the life of the project).

iv. Secondary benefits: Identify the secondary benefits of the project (for example, facilitating participation in funding programs, improving Malta’s ranking, strengthening Malta’s reputation in a particular area, etc.)

Preparation of a detailed business plan
The stages of writing a business plan are: After deciding to start the business, before starting the business, and when an update is required.

Business plans can be written for retail businesses, wholesale businesses, service businesses, manufacturing, and any other type of business.

A business plan is written by doing the following:
Identify all the questions that may be asked about the business.
Determine what additional information needs to be collected to answer all the questions.
Obtaining all the necessary information.
Comparing several alternatives
Making a decision on each question.

A business plan must:
Have good looks
Provide an index
Provide a summary
Number each copy
Sign to show who sent it.
It depends on the nature of the business.

A business plan should be organized to include a cover page, index, executive summary, business description, marketing plan, organizational plan, operating plan, financial plan, and appendices.

The outline of a typical business plan is as follows;

1. Title: Report of the feasibility study ______________________
Commissioned by_________________________
2. Project consultants
3. Table of contents:

Executive Summary
The report
project background
Study objective
Project description and
Loan advance
Promoter
Location

Market and marketing plan
Potential customers
Competition
Prices
Sales tactics
Publicity and promotion
Distribution.

Technical feasibility and management plan:
Factory
Machinery
General charges
Packing materials
Raw materials Labor and Labor costs.

Financial projection / viability:
Summary of capital requirements
Financial plan
Projected cash flow
Projected profit and loss account
Projected balance sheet
Analysis breakeven point
Source and application of funds

Organization plan:
Form of ownership
Identification of partners / main shareholders
Directors’ authority.
Management team background
Roles and responsibilities of the members of the organization

Risk evaluation:
Assess business weakness
New technologies
Contingency plans.

Schedule:
Projected 12-month sales
Projected purchase in 12 months
Fixed assets and depreciation schedule
Profitability index.

Thank you for reading

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