The importance of the Business Plan in Portugal
Intuition is not proof of a good or bad business idea. It’s just intuition and it’s merely subjective. A business plan is an objective and clear management tool that allows you to evaluate, mitigate risks and project the degree of success of a business idea, regardless of the stage of this idea. That is, the business plan is useful both in launching and in expanding a business. It is also useful only for the simple fact that it helps to strengthen an existing business.
The main objective of the business plan is to predict the sustainability (or feasibility) of a business, analyzing all the factors that directly or indirectly influence it. From this analysis, the business plan moves to a projection phase, where it outlines the company’s future strategy towards financial success and sustainability.
1# The Portuguese reality, financial resilience, and the importance of the business plan
In Portugal, we have a business fabric composed mainly of micro, small and medium-sized enterprises. In fact, 99.9% of companies in our country are SMEs. If we look at the financial resilience of some of these typologies we find values below or just above 50%. In micro-enterprises, for example, their share of financial resilience is only 42%.
Unfortunately, what happens with some frequency is that these companies fail not because they have a bad idea, but because they are not prepared to deal with the various risks inherent in the activity and the market. Many of these companies have never devised a business plan. Many of the entrepreneurs do not have the patience for planning and they move forward at full thump ahead having looked only at one aspect or another of the business.
In an article published by Marlene Tinoco, CEO and Founder of Lisboa Investments, 4 problems that the business plan helps to avoid and that are very much in line with the Portuguese reality were identified:
– avoids unnecessary risks.
– avoids the loss of time and money.
– reduces difficulties in obtaining funding.
– reduces communication failures between business stakeholders.
So, what must the business plan contain to be implemented in Portugal?
To answer this question in the most universal and clear way possible, we indicate below what a business plan should contain:
– Executive summary.
– Brief history of the idea and experience of the promoters.
– Size and indicators of the market where it will operate.
– The product/business idea.
– Customer segmentation and positioning.
– Strategy.
– Business model.
– Promotion and distribution channels.
– Investment required.
– Projections and financial statements.
To retain
A good idea is as good as its long-term economic and financial sustainability. And the tool that attests to this sustainability and shows you the way is the business plan. If you need help with the preparation of this business plan, you can count on the expertise of Lisboa Investments. Contact us here.
2# Business acceleration
Business acceleration is one of the “tricks” that many startups use to launch themselves to the market faster. This acceleration always has the help of a mentor, able to bring their experience and network of contacts to facilitate the implementation of this startup.
When “accelerating” a startup, you should consider the influence on the business plan. The new sources of financing and the timings that this acceleration bring directly influence the startup’s position in the market and financial commitments to creditors. Therefore, the business plan must be designed and/or adapted to this reality, allowing a clear view of the path that the startup must take.
Citing Marlene Tinoco, the “business plan is a dynamic instrument that can and should be updated and enhanced throughout the life of the company. ” Whether in the opening, acceleration or expansion of a business. Each different step of a company must be accompanied by an update to the business plan.
If you want to accelerate your business, count on the acceleration and mentoring service of Lisboa Investments. Get in touch with us.
3# Obtaining bank financing and/or venture capital
Bank financing and venture capital are two of the main financing tools that an entrepreneur can use in our country. And in case you can submit your application for one of these funding routes, you need to have a well-designed business plan.
For example, in the case of bank financing, the bank providing the credit needs to have guarantees as to the conditions of your company, its viability and financial health. One of the documents that best proves these points is the business plan, where the bank can verify that its growth strategy is well founded.
In the case of venture capital, as Indicated by IAPMEI, access to this financial instrument is made through the presentation of a business plan that should prove the credibility and potential of the project.
If you are looking for a financial instrument to support your project, count on our expertise to help you accelerate this process and get the best conditions. See lisboa investments services here.
