Here you can find some useful instructions on how to develop a business plan.
In general, a business plan is one of the most important documents and the most essential roadmap for foreseen business success. This document projects and outlines the way which a potential or existing company could follow in order to develop and to increase its revenues. The plan projects several forthcoming years, mostly from three to five years.
It is to be noted that a business plan is a decision making tool, its structure, content and format is determined by goals and an audience. On the other hand, it aims to give a clear and understandable overview of foreseen business for someone who is not very familiar with it. Moreover, preparation of a business plan refers to different knowledge disciplines like finance, marketing, human resources, management, intellectual property rights, supply chains management, etc. And these disciplines clearly are related to several crucial questions which need to be addressed before starting a business.
Because writing a good business plan is not an easy task, the main aim of the investment toolbox is to give useful tips and information how to proceed with its development.
In general, the business plan should at least give answers to the most important issues:
A place of business plan in decision making process
A business model is part of a strategic plan of business activity, it provides the fundamental link between product, the producer and the markets. It describes how a company creates, delivers, and captures value and consider it in economic, social, environmental and cultural aspects. The main goal of a business model is a description of how a company will convert inputs (capital, raw materials and labour) into outputs (total value of goods produced) and make a return that is greater than the opportunity cost of capital.
A business model is a long-term approach adopted by the company to maximize and utilize resources to provide customers with a competitive offer while ensuring profitability. A good business model is designed to obtain and, at a later stage, maintain the competitive advantage.
Business models are constantly changing. What may have been a good solution a few years ago may not be as good as it is today, so it is important to keep an eye on the changes and trends in the market.
Creating a good business model is not easy and requires a wide knowledge of the company, the key factors that create value for the customers and the benefits they value.
The business model is defined by the company’s mission and values, as well as products or services it will deliver, customers or markets it will target, and supply and delivery channels it will use.
One of the business modeling tools is the Business Model Canvas concept, which is the starting point for the company looking for effective ways to build competitive advantage based on an innovative business model.
The template is divided into nine dependent elements.
On the right side there is a customer segmentation (Customer Segments), which indicates the different groups of customers to which the company is trying to reach. Then the set of products and services that generate value for each customer group (Value Proposition) must be indicated. The next step is to identify the channels through which the company communicates with the individual customer groups and how it communicates them its value proposition (Channels). The fourth stage in the design of a business model is the definition of customer relations (Customer Relationships). The last element to the right of the template is the revenue stream (Revenue Streams), which represents the number of resources generated by a company in relation to the operation of each market segment.
The left side of the template focuses on costs. This part of the model identifies: Key Resources (physical, financial, intellectual, human), necessary for the proper functioning of the business model, Key Activites, which the company must take to make the model function efficiently and key partners - suppliers and associates who depend on the success of the business. The last, ninth element, is Cost Structure, which covers all expenses incurred in using a particular business model.
The greatest advantage of the business model template is undoubtedly its simplicity and intuition. One can look at the transparent, easy to present business model of the company and understand it. The versatility of the application and the great flexibility of the approach in question, as well as the introduction of a value proposition to the customer, can be emphasized in the central point of the template, which gives the business the right priorities
One of the practical tools based on the business model canvas is the strategyzer's offer, available here:
Potential investor is interested in utilization of waste heat for own needs and purposes.
Business model framework:
Potential investor is interested in starting a well prospering business based on waste heat.
Business model framework:
Energy Service Company (ESCO) as an intermediary
ESCO (Energy Service Company), ESCO (Energy Service Company), means a company that offers energy services. An entity of this type invests its financial resources by implementing energy-saving solutions at the client's premises and performs necessary works in the facilities. In practice ESCO implements executive contracts and comprehensive services, providing clients with a guarantee of obtaining savings. Thanks to the implemented solutions, the client gets savings, which allow him to pay the costs of this investment. After a total "payment" of the project costs, the savings remain on the customer's account. The two most important contract models in the ESCO formula are energy efficiency contracting (Energy Performance Contracting, or EPC) and guaranteed delivery of energy (Energy Delivery Contracting, or EDC).
- Energy Performance Contracting
Energy Service Company (ESCO) dependent from heat producer
EPC (Energy Performance Contracting) is the agreement between the beneficiary and the supplier of energy efficiency improvement measures (ESCO). It guarantees that the investment is repaid according to the schedule specified in the agreement, depending on the level of energy efficiency improvement achieved, which is guaranteed by ESCO. The full definition of the EPC contract is contained in art. 3 of Directive 2006/32 / EC on energy end-use efficiency and energy services
The services offered by the ESCO companies differ from each other in terms of financing and risk sharing between the ESCO and the client and the profits from the implemented investment. There are four basic types of EPC contracts:
- Contracts in which ESCO offers financing, at the same time giving the client a guarantee of savings (ESCO bears almost the entire investment risk).
- Agreements in which the client / owner is responsible for financing, and ESCO guarantees energy savings (the risk is divided between the parties to the contract).
- Agreements providing for the total assignment of savings to ESCO due to reduced energy costs up to the total investment repayment.
- Energy management agreements based on which ESCO receives payment for the provision of an energy service
- Energy Delivery Contracting
Energy Service Company (ESCO) dependent from heat utility / network owner
EDC (Energy Delivery Contracting) ) is the second most popular type of contract proposed by ESCO. They specify the conditions for the operation, construction or modernization of energy sources (heat and electricity) at the own risk of the contractor (most often ESCO), based on long-term contracts. They are based on the assumption that the optimization of energy consumption in the long term allows to obtain significant economic and ecological benefits. The elements implemented by the contractor (most often ESCO) include financing, planning and construction or acquisition of the source of energy production as well as operation management (in particular maintenance and operation), purchase of fuel and sale of energy. The remuneration for these services consists mainly of payments for the supplied energy.