A business plan is basically the blueprint of your about to start business which you intend to start the way you have mentioned in your business plan. There are many objectives of a business plan but the prior objective of it is to present a probable future outlook of your business which you intend to start.
A business plan contains all the necessary information regarding your business startup and it also addresses all the concerns that reader has about the business. In the recent while, business plans have become quite common and nearly every startup invests a significant amount in writing a business plan.
There are several advantages of having a comprehensive business plan. The first common question that arises regarding a business plan is who needs it? Well, every standard business startup needs to have one but here is a specified detail regarding this.
Who needs a Business Plan?
Nearly every standard business startup at this present time requires a business plan. While incorporating your business it is obvious that you will be required to explain the details of your about to start business venture. To make it much more convincing to your esteemed stakeholders a business plan would be the best. Here are specific details about the need to have a business plan.
Startup Business: A startup business is the one who needs a business plan the most. This business plan will help it to attract investors, get loans sanctioned from bank and to get other approvals related to license of business and business visa.
An Already Existing Business aiming to Expand Further: A business already in existence which aims to expand further also requires a business plan in order to attract and convince investors and other stakeholders.
A Business that aims to hire Employees: It is obvious that professionals who aim to join a business would like to enquire about the future prospects of the business. Such business plan helps in similar cause.
Especially for the Customers in Large: Businesses where customers are directly involved also requires a comprehensive business plan. The best example can be that of real estate where the builder shows a details business plan to the customers regarding their venture.
Apart from these, there are also other people who may need a business plan based on their requirements.
Why need a Business Plan?
Well if you are going to read this comprehensive piece of writing about business plan then you should be clear why you need a business plan. Here are some important reasons for having a business plan.
It is the Face of your Future Business: Every entrepreneur dreams of their business startup to be of a certain kind. They dream about its future and how they would like to shape it. Well their ideas remain with themselves but how will others know about how the person aims to build his business. The best way is to write a business plan that carries not only the dream of the entrepreneur but also dreams backed with hard facts and figures. A business plan thus turns a thought into a written form.
A Booklet which your Project to your Stakeholders: Since most businesses involve multiple stakeholders like investors, shareholders, partners, employees, and other people, before they actually get involved into your business they require a conclusive detail about your business. A business plan serves to the requirement which has all the details regarding your business. Most of the stakeholders approve their involvement based on details of your business plan apart from your personal persuasion.
The Ticket to many Approvals: If you are a foreigner intending to invest in a foreign country then the first thing you would require is a business visa. To obtain a business visa the foremost document they ask is a comprehensive business plan. Sometimes it becomes the sole reason for visa approval. Apart from this, a business plan is important to sanction loan from bank, get your business incorporated, and get waivers for special business ventures especially in innovation sector, and other license and approvals from authorities.
A Business Plan to Guide your Business Incorporation: Since starting a business is not a simple process therefore it is important that you have a roadmap ready in your hand to monitor the progress in your startup.
A business plan contains details related to the incorporation of your business. While the incorporation is in progress, you can use your business plan to check whether your business is going as per plan. Thus a business plan helps in guiding the startup to the correct path.
Components of a business plan
The above details contained the reason why you should have a business plan, who needs a business plan and its advantages. The next section will deal regarding the structure of the business plan or components of a business plan and how will you shape your business plan.
Even if you know that a business plan carries details regarding your business but it becomes quite tough to write it in details in a professional tone.
10 Steps you must follow while writing a business plan
1. Strategic Planning:
You intend to start a dairy business which was the product of your thinking. What you will write in your business plan is about how will you start your dairy business and how will you shape it. Strategic planning contains every aspect related to your dairy business. You need to conceptualise what will take to start your business. This includes funding, planning, roadmap, documents, employees, etc.
2. Feasibility Analysis:
The second step you must take after you have done your planning about your business is to conduct a feasibility analysis about your business prospects. Contact an esteemed firm that deals with feasibility analysis and state your plan to them. Based on your input and requirement they will carry out the analysis which will give you details regarding your business in comprehensive way. A feasibility analysis report is the one that will pave way for your business plan. This report contains:
- Cost involved for business startup
- Favourable place of business
- Your chance of success
- Steps that must be taken to grow your business
- Specific recommendations for success in business
- Team organisation and size
- Market Competition
- Method to expand business
- Conclusion and other specific details as required
These are some basic elements that a feasibility analysis report consists of. There are many more facets to this report which also documents return on investment, growth predictions, etc. which you can regulate based on your requirements. This report will thus shape the foundation of your business plan.
3. Content of your Business Plan:
Ideally, a business plan should contain everything that holds importance in your business startup. But to be specific, you need to include all the basic components that every business plan contains. These are:
- Executive Summary
- Business Plan
- Financial Factors
- Competitive Analysis
- Market Strategies
- Business Structure and other details
- Operations and Management Plan
Their details are as follows:
4. Write Executive Summary:
An executive summary is the soul of your business plan. It should always start on an intriguing note with full of optimism and zeal. The executive summary generally contains a general summary of your business and what it is all about. It includes the type of business you want to pursue, why you chose the business, why you feel that your business will be successful, what drives you to pursue this business, where you want to see your business in times to come and many such details which gives a general idea to the reader.
It should be such that it draws the interest of the reader. It should be connecting and logical backed with facts and figures in order to convince the reader that whatever you are claiming can come to reality.
5. Write Business Plan Summary:
As the name states, you will have to now go into details regarding your business. Whatever you have proposed in the above section you will have to explain them in detail. You will have to mention down the report of your feasibility analysis and also other details which you have collected through research.
Site reports, research papers, other details on your business and mention how much possible your plan is. Here, you will have to first figure out the existing problem in the market then you will have to propose a solution and later you will have to mention how you will implement the solution.
6. Mention Financial Factors:
Nothing works without proper financing. Especially when you are presenting your business plan to your investor make sure that this section is well researched and well-articulated. Loose statements and financial figures do not convince the investors as money is always the key component of any business and unless the investor is fully convinced regarding your finance module he won’t generally invest.
This section also requires the help of feasibility analysis report which would have laid down the expenditure regarding your proposed business. Take help of experts in determining the cost expenditure based on real-time conditions. A financial plan includes:
- Capital investment in the business
- Investment on specific field
- Probable source of investment
- Channelizing of resources in an efficient manner
- Return on investment
- Time required to get ROI
- Your projection on probable returns in a time span of 5 year or annually
- Income and expense while managing the business
- Savings and future investment policy
- Future outlook for business growth
7. Write Competitive Analysis Research Data:
This section deals with your business’s prospects in the market. Every business while incorporating is promised to succeed with all sorts of plan and strategy but many of them fail. Here you will state why your business will succeed in the present market. Where does your business stand at the time of inception and where you aim to take it in times to come.
You need to be very honest while stating market conditions since the stakeholder who is reading would also use his wisdom. Figure out the complexity of market, difficulties in growth, what are the barriers you would face. Then you should mention how you will manage and sort out all the barriers that you will face and what strategy do you have. Here innovative ideas will be of considerable importance.
8. Write Down your Marketing Strategies:
In this section you are required to mention detailed reports on your market strategy. How will you take down your opponents in the market and what are your strategies. This section holds key importance especially for investors who look for the key reasons for the success of business. Here are few key points which you should mention.
- Your strength, weakness, opportunity and threat
- Competition and market research
- Your target market
- Brand and product positioning
- Potential customers and their profiles
- Elevator pitches and timelines
- Results of any testing conducted so far
- Marketing budget
A professional research and advice is must to write this section. Again, feasibility analysis report will be very helpful. While writing about your target market, be very specific and elaborative as the correct assessment of your target market is the key to success. Be honest while mentioning your strength, weakness and threat.
9. Describe your Business Structure and other Details:
Whether you intend to make your business a sole proprietorship, partnership, LLP, joint venture, corporation or of any other type, you should be mentioning such details in this section.
A legal entity holds much value in your business and thus the investor or any other stakeholder will give an eye on this section. Legal entities define the organisational structure of your business and your intention on where you will place your business in times to come.
Read more:- Different type of business entities in the USA
Whether your business will be limited to a small size or will it grow out to be a giant MNC will depend on your business structure. This section will also include the intending size of your business including the number of employees, their pay scale, and powers of members, liability, and many other details. If you wish to include any other details closely related to this section then you can.
10. Write Down Operation and Management Plan:
Operational plan includes how your business will operate in reality. For example, in case you wish to start a dairy business then where will be your dairy farm, from where will you arrange cattle, who will manage the farm, etc. Operational section should include:
- Facility and Space needed to operate business
- Equipment required
- Technology to be used
- Infrastructure of your business
- Supply chain management
- Logistic and distribution
- Quality and control check, etc.
Management includes your team as a whole which will monitor and manage everything. An advisor who will render advice on issues, accountants, sales person, marketing expert, etc.
This will also include cost required to manage the business. Management team in general also forms the core team which includes founders, CEO, COO, managers, board of directors, advisors, etc. Be very specific while mentioning these details. Also list down the details of your business employees, advisors, investors, etc.
Appendix: This is basically the section which includes some other details which have found no place in the above sections. This can include documental details of your company like status of your business, balance sheet, resumes of your employees, growth data, license, trademarks, IPR, other research data, etc.
How would you like to see your Business Plan?
Would it be simple and stating facts or it should be comprehensive containing your dreams as well. Should it be short like 10 pages or should it be in detail having more than 50 pages. Also, there are traditional and lean startup business plan. The structuring of your business plan is also very important.
Make sure the content looks neat and clean. By this one means that reading clarity should be maximum so that the reader does not have trouble in finding the content of his interest. Mention the index of contents to ensure that the reader gets the content he wants to read. Also use standard writing tools and formats like headings, titles, subheadings, bullet points, etc.
Key Points to Ponder while Writing your Business Plan:
Use Simple Language:
What one means by simple language is a standard medium of communication which ensures that the person reading should understand the basics of the writing. Simple language does not mean that it should be poorly comprehended or it is written loosely without much care. Always be careful while drafting the plan to ensure that it satisfies the basic standards of writing while also ensuring that it does not have jargons to trouble readers. Use examples to explain your point while also using lighter tones to express your point effectively.
Keep it Short and Concise:
It is obvious to mention all the details but ensure that your drafting should be short and concise. Nobody is that much free to read scores of pages. Make sure it is short yet effective. In case there are details and reports that you feel is important to mention then you can add it separately in the end specifically mentioning it.
Address the Appropriate Audience:
Those who will be reading your plan will include investors, shareholders, visa authorities, bank officials granting loans, license authorities, approving authorities, employees and other stakeholders. Each of them would read your plan in their own way and they would be looking for things that would interest them. Make sure to address each of them clearly. For example, for issuing your business visa, a visa official generally looks about investment amount, chance of success, growth trajectory, number of employments created, etc. Try to target each one of them.
Be Enthusiastic while being realistic at the same time:
A business is often driven by hope, zeal and enthusiasm. While writing your plan and especially the starting and end section, you should be full of enthusiasm and zeal to charge up the reader. At the same time you should also be realistic. By using the term realistic, one tries to say that you must not be writing shallow words which sounds unrealistic and highly improbable. Don’t promise something that cannot be fulfilled. Everything you mention should be backed with facts and research.
Your Shortcomings and its Solution:
It is obvious that your business will have some shortcomings. Don’t feel shy to mention it along with the solutions you have. You can also seek advice from the readers and ask for their views. Make it interactive to ensure participation.
Don’t deviate from the Path:
Often while writing long papers it happens that one deviates from the main point and wanders around. Be specific about what you intend to write and how will it serve your purpose. Don’t mention things which are of no use. Only mention what is important to be mentioned. When you get deviated what happens is that the reader becomes confused and disinterested. This should be the last thing to happen.
Take Advice from Experts while formulating your Content:
While writing down financial statement, business structure, and other important sections, it is obvious that you will require lots of details, research and opinions. Hire experts or consult them while writing such sections as they require lots of precision and factually correct statements.
Reports that you attest should be of credible nature and while mentioning facts and specific objectives, always back them with references from where you have obtained such information.
Take Help from the Professional:
Hire an expert to write your business plan. There is lot more than the things mentioned in this article. Lots of precision is required while writing a business plan. A professional will take care of all such important aspects while writing your plan. Drafting your plan in the correct way is necessary to enhance the presentation level. Such professionals will also use tech advancement in drafting the plan making it much more attractive and readable.
A Perfect Conclusion:
The starting and end is something that always matters in a business plan. The start as mentioned above should be hopeful, cheerful, promising and full of enthusiasm while the end should be satisfying, full of confidence and should end at a note that illustrates a dream of the future.
The reader should get a sense that if such plans are executed as per plan then this is what one will get in the future to come. Make sure that the reader remains glued till the end.