Careful strategic planning is the most important step in setting up a business. Get the best tips for creating a business plan!
A good business plan will make it clearer how your firm works
Little by little your idea is becoming a reality! Strategic planning will turn your dream and ideas into a profitable and sustainable business. A business plan will also come in handy if you’re applying for external funding – not only is it necessary for the application, but also gives you a clearer idea of what is to come in the long term. We can help draw up a detailed plan that covers accounting, profitability and sales calculations, licensing and registration, pensions and social security, and insurance.
Strategic planning is the foundation for your whole business
Strategic planning encapsulates the purpose of your business and helps you visualize how the ideas will work in practice. The greater the goals, the more detailed the strategic planning will be. It can include everything from an outline of product pricing and plans for sales, marketing, and production resources to plans for staff and product development and an analysis of patents and risks. But also the simplest business plan can be enough to get you off to a good start too. Most important of all is to be sure that there is demand for your business, and that customers will respond well to your idea.
Careful strategic planning gives you a solid basis for achieving sales targets, and will serve as a useful tool as your business matures. A business plan is primarily for your own benefit, but can also be used when applying for start-up funding or grants. It’s also worthwhile drawing one up when buying a business that already exists, and there are ready-made templates, such as the Business Model Canvas, that will allow you to see more clearly how this existing business could develop.
Essential to any business plan are the following:
Business idea
Describe your business idea in terms of the products and services you sell: who are they for and how do you provide them? What demand do your products or services address? It’s a good idea here to also think about who your competitors are and how you provide something for your customers that the others don’t. It’s also important to know exactly who your customers are and how you will reach them.
Money
When you start your own business, you will understandably want to know what you can earn from it. That’s why it’s important to think about all the ways you might generate sales and make money. It all starts with pricing: how will you price your product or service and what will the pricing be based on? How much are you aiming to sell per day, per week, per month, or per year? You can visualize this in terms of the number of products sold, for instance, or customers served.
Risks
There are always risks in business. It’s good to be aware of exactly what they are, and to bear in mind they do not have to stop your business from succeeding. It’s simply a case of being prepared for what might happen if they do. One way of identifying risks is to use a SWOT analysis, which lists your company’s strengths, weaknesses, opportunities, and threats. As a business idea often relies on the entrepreneur’s skills, you can also briefly record what those skills are (including those of your potential team), and also think about the skills you might need in the future which you may not yet have.
Financial calculations are a part of profitable growth
Financial calculations will help you outline how profitable your business is and whether you can pay yourself a salary. Profitability calculations, consisting of an investment and finance plan, a sales calculation, and a costs calculation, should always be done when starting or expanding a business, or when launching new products or services. It will help you understand the total sales that will cover the costs of running your business profitably and the way you want it. All estimated expenses and income are included in the calculation, and we can help you make it using a model that suits your business – like for example, the Business Pilot Strategic Planning template which includes a sample expenses/income calculation, a three-year revenue plan and a cash budget for the first year.
Knowing the costs will pave the way to a flourishing business
Fixed costs
These are the everyday expenses that must be met irrespective of any sales: e.g., salaries, rent, electricity, water, insurance and YEL (pension insurance contributions for the self-employed). You should also take into account any digital marketing costs like setting up a website.
Variable costs
These costs vary according to the volume of production and sales. In general, if your sales increase, variable costs will do so also and vice versa. Variable costs include, for example, raw materials and supplies.
Taxes, loans, and other financing costs
Rather than underestimating your costs, it’s better to overestimate them, in case things don’t go according to plan. For example, the cost of raw materials may rise or a tool break. Once you know all your costs, you can estimate the prices you need to charge, the timeframe for doing a job, and how much your business needs to sell to make it profitable. When estimating your sales requirements, it’s a good idea to break down the total sales into hourly, daily, or monthly billing targets. This will help you to see how realistic your estimate is.
Accounting as part of the entrepreneur’s daily routine – how to find the right accountant?
In the simplest terms, accounting means keeping a record of the income, expenditure, assets, and liabilities of your company. A responsible entrepreneur is one that makes sure the accounting is organized properly.
Most entrepreneurs entrust their payroll and accounting to a professional accountant. A good accountancy firm will offer expertise support, so the cheapest accountancy firm is not always the most appropriate. Before choosing an accountancy firm, it’s a good idea to talk to other local entrepreneurs and listen to their opinions. Having a professional accountant with extensive business knowledge is an important asset when it comes to developing your own business. We can help you choose the right accountant!
Do you need help setting up your business, developing it further, or dealing with those everyday challenges of being an entrepreneur? Our business advisory service can help find your own direction, whatever stage you’re at!
Quick downloads – Useful materials for positive entrepreneurial energy
Have you reached the stage of starting a business where it’s time to draw up a business plan? Get off to a good start with the business plan templates from My Enterprise Finland and Uusyrityskeskus!
What things should you consider when setting up a business? What is a good business idea, how do you make a business plan and choose the right type of business to register? Download our guide to starting a business!
A start-up grant provides support not only for entrepreneurs who are starting out but also those consolidating their business. Read more about the criteria for start-up grants on Job Market Finland’s website.
The Cooperative Founder’s Guide comprehensively describes the key issues involved in setting up a cooperative. It’s intended especially for those who are considering or already planning to set up a cooperative.
How much should you pay towards your pension as a self-employed person? What are the benefits of making YEL (pension) contributions? Find out with YEL calculator provided by Varma!
