Business plan and calculations

A business plan helps outline the overall structure. At the same time, it becomes clearer whether the idea is profitable.

The business plan helps the entrepreneur see the overall picture: who are the customers, what are the competitors like, how the services are provided and what are the goals. It gives the operations a focus and also serves as a tool for financiers and partners. 

The calculations related to the business plan examine, for example, how much the initial investments will cost and how you will fund them, how the different costs will be distributed on a monthly basis and at what sales volumes the business will be profitable. Even a simple plan and calculations provide a lot of help in decision-making. The most important thing is being realistic and able to justify choices.

Entrepreneurship always involves risks. These may include customers’ payment defaults, suppliers’ delays, fluctuations in demand or the entrepreneur’s own illness. Risks should not prevent entrepreneurship, but you should identify them and prepare for them in advance. A good tool for mapping risks is the SWOT analysis, which assesses strengths, weaknesses, opportunities and threats. If the business plan template you are using does not include a risk analysis, make one separately. It is important that you do not to leave things up to chance, but that you minimise potential losses with good planning.