A viability plan It is a business plan, the document that you should know how to write when you have a project in mind, because if it is well structured it allows you to present it to a bank or an investor to carry out your idea.
Next you are about to know how you should write it either with Excel or simply by writing it in Word and best of all you will read an example so that you can transport your idea and develop your plan.
What is a feasibility plan for?
- The viability plan It is the written description of your business idea that is useful for analysis thanks to the fact that in the document you describe and you can identify your idea in detail.
- For example you can examine all the technical details and from there you realize if it is feasible.
- Even with an analysis of commercial concepts, you also realize if the service or product of your idea is suitable for sale.
- Like any business you are looking for profitability, because when writing your plan you will realize if the product will be really profitable.
- In the written document, you plan all the strategies that you must follow to complete your project with a step by step incorporating the resources that will allow that idea to be turned into reality.
- Perhaps you think that you do not need financing and therefore you think that you will not present your plan to any investor. However, it will serve you internally in your future company.
- The first reason is based on the fact that you will be able to have a complete description in front of you so that you can analyze and make a better planning of the project.
- By having more knowledge about your project, you will be able to realize if you need to make any adjustments to your idea and therefore you will get your future company on track to success.
- If you do not have sufficient financial resources to start your business, it will serve you externally because you will need to request financing. This is the document that you will present to investors, banks, etc.
- If you are a self-employed entrepreneur, it will also serve as a cover letter for your project. In fact, if you ask for a grant, it is a mandatory document to present, since it is your endorsement.
Who draws up a feasibility plan
As a freelance entrepreneur you can develop your viability plan always taking into account how complex your project is, because sometimes you may need the help of a consultant who will work with you to prepare it.
Of course, its content will vary depending on the investment you need to complete your project and the type of activity, because when it is a simple project, the document will be less extensive than you may need if your company’s project is larger. extension.
How to develop a feasibility plan
But in any case, beyond the length of the project, it should never have more than 50 sheets where in the first two or three pages you will include an executive summary as an introduction.
- When writing it you should think about elaborating it in such a way that it is so convincing and clear so that anyone can understand it, since it is the way in which you will be able to get the economic resources you are looking for. to get them.
Example feasibility plan
With a viability plan example is the best for you because it will help you to develop your own plan, then assuming that your idea has been to open a store …
Of course, you will have looked and decided the physical place and you know what type of product you will sell, but you will guarantee that your business is successful by developing a viability plan in this way in Word:
- Start with an executive summary remembering that you cannot extend it to more than 2 or 3 pages.
- Continue with the presentation of the project, that is to say that this section must capture your business idea with all the details so that anyone can understand it.
- Make a description of the market study that you have surely already carried out, explaining how your product will be placed on the market with the advantages that you discovered.
- Explain the commercial strategy that you will apply to place your product before the demand of potential customers.
- Describe in all its details how you will carry out the production of your product and what human resources will be involved in its production.
- Do an economic financial analysis so that whoever reads it can realize that your idea has to do with a profitable project.
- Prepare a SWOT analysis, as it is a tool that will lead you to make a good analysis of the current situation of your business and make the right decisions.
In the SWOT analysis you will write internal and external factors separately. For example, internal factors include the cost of production, what is the productive capacity of the business, how will you select human resources, if they need training, how will you organize your company with an organization chart.
You will also include financial ratios, what is the level of indebtedness and other factors that have to do with equity and finances.
You will describe how your product will position itself in the market, which will be the distribution channels, how you will promote and distribute it and everything that has to do with marketing.
You will also do an external analysis in your SWOT analysis, including who is the target audience of your product, who is it aimed at and what is the volume of their demand.
You will include a review of your competition detailing what their pricing policy is, how they distribute the product and how they carry out their marketing strategy.
Finally, in the external SWOT analysis, you will include factors that influence either directly or indirectly in carrying out your business idea, such as environmental, technological, social factors, etc.
Excel viability plan
In the same way that you wrote it in Word form, you can do it in Excel, preparing financing, investment, treasury, profit and loss accounts, and with good coordination between them, you can do it this way:
In data entry sheets you enter:
- The detail of investments with the calculation of depreciation and the useful life of the assets.
- The financing budget includes the calculation of interest to be paid with installments and interest rate.
- The sales income budget will include the cost of supplies.
- You will include overhead, rent, and personal expenses.
In results sheets you will include:
- the income statement with all its details.
- You will include the treasury budget as derived from the results, adding payment and collection for financing, investment and exploitation.
- The balance with the balance of the activity start-up account and the corresponding accounts at the end of each year.
- Complete the study with the balance, profitability and breakeven ratios.
- With a good analysis of the statements you will be able to know if the project is viable, if you will obtain profits, if the ratios are within what is recommended and if the treasury is adequate enough.
Viability plan of a company
- You can carry out the viability plan of a company because you are the one who knows your business best, you know what it plans to sell and offer and you can even do an analysis of your competition.
- Well, all this is what you must include in the description of the plan. Therefore, it will become the presentation letter of your future company, since you know what the product you will sell will be, tone then ask yourself how you will sell it, who will you sell it to, what is your target market, its magnitude and ultimately in function of all this analysis you will be able to realize what your target audience is.
- You must also set out the legal form of your company, will you conform it as a self-employed person, will you constitute a company? What kind of society?
- When you finish making the description, read your plan and have friends and family read it so that they can tell you if everything you have captured is understandable and you detailed everything in such a way that whoever reads it understands the same as you.
Business viability plan
Therefore, they will be reading a document with the details of your business idea, which will reveal if that project is viable and is also as profitable as you think, so you must prepare it before starting your project.