If you are putting up a new business or structuring the expansion of business, we will help you in staying positive by assisting you in preparing your business goal. Do not let lack of planning affect your business. Insufficient market research, financial planning, lack of social media presence, management all these mistakes add to lack of planning that can be traced back to the roots of the company, the business plan.
What is a Business Plan?
A business plan is a document that keeps a summary of all the financial and operational objectives of future business, all the related information, and detailed plans as well as the budget, and also showing how the objects will be realised. If a person is planning about starting a business, it is always recommended to sketch the basics of business, its product and services, the business market, and also to set goals for the company. All this information can be drafted in a single document called a business plan.
Why is Business Plan Important?
A business plan usually is a step by step process to convert a business idea into a successful business venture. It must include the following details:
- To identify new and innovative ideas.
- To make a complete research of the external environment for opportunities as well as all the threats involved.
- Identifying all the weaknesses as well as strengths.
- Assessing how successful the concept will be when applied practically.
- Allocation of the resources in a proper manner.
- Providing a proper vision to the entrepreneur.
- Evaluating the prospects of the new venture.
- It will also help in monitoring progress.
- It can convince others to join the business.
- It will also help in getting loans from financial institutions.
- It also facilitates the decision making progress.
Who needs a business plan?
Any person who plans to set up a business needs a business plan. You do not need to prepare a business plan for the purpose of a regular job, or for starting a hobby. Anybody who is launching a new venture or planning to expand its business, which will consume resources of money, time, energy, and in return also expects profits, must draft a business plan for the smooth functioning of a company. A business plan is needed by:
- Startups and
- Established Firms
Startup Business Plan
A business plan helps an entrepreneur to think about various aspects of a startup.
A startup focuses on big ideas, rather than on execution. A business plan in startups maps out business and also guides growth.
A well-planned business plan helps in convincing Investors.
For a business person who is seeking funds for a new business venture must have a business plan in order to convince the investors. It is useful for businesses at every stage, whether they are seeking financing or figuring out how to invest the surplus.
The business plan sets objectives for managers.
A startup can grow successfully with the help of proper management by the setting of objectives and also tracking. If the managers work as per the pre-set business plan, it will help them to achieve targets in a more organized manner.
Cash Flow Management
In a business to function efficiently, cash flow management is one fundamental activity. A complete planned assessment will help in monitoring the current funding, future requisites as well as cash inflow and outflow.
Profitable and Strategic Exit
To value a firm is robust, with the business plan in hand, all likelihood of investments can be highlighted. Hence, at any point in time, if the entrepreneur decides to close the business, a better valuation can lead to a successful exit.
For Established Firms
For the Growth of an Existing Business
A business plan helps in establishing a strategy as well as allocating resources as per the strategic priority.
Valuation of Business
Valuation of business means knowing the net worth of your business. This plan will help the valuation expert know about your business, what it is doing, why, when, and how much it will value, and also how much a company will produce.
For Developing Alliance
A business can use a business plan that can open doors or opportunities for new alliances.
For Selling Business
A business plan plays an essential role in the sales part of the business. By way of a business plan, the buyers can be made to understand its worth and why they need to buy it.
What are the Basic Components of a Business Plan?
If you are creating a business plan to raise money or to grow your business or just to figure out if your idea will work, every business plan needs to cover some essential topics. A quick overview has been provided below:
Company and Management Summary
The executive summary is a synopsis of your business and plans. It is the first thing to be included in a project, and ideally, it covers one to two pages. Many entrepreneurs write it on the last page.
The opportunity section answers some questions, like characteristics about the product, problem-solving strategies of the market, how to handle the target or competition.
In the execution chapter, the specific questions to be answered are how to convert an opportunity into a business? This section must cover the sales and marketing plan, operations, milestones as well as metrics for success.
Company and Management Summary
Investors search for great teams in addition to attractive ideas. It is suggested to use the company and management chapter to describe your current team and also who needs to be hired. You also need to provide a quick overview of your legal structure, location, and history if you are already up and running.
The business plan remains incomplete without a financial forecast. We will help you in preparing your financial plan, which will include a sales forecast, income statement, cash flow statement, and the balance sheet.
If there is any need for more space for product images or additional information, use the appendix for those details.
Types of Business Plan
Business Plan is generally divided into six types:
Startup Business Plan
Startups need to detail the steps while starting the new enterprise in a startup business plan. The business plan includes sections that describe the company, product, or service startup to offer the management team and market evaluation.
Internal Business plan
A specific audience is targeted via a domestic business plan. An internal business plan describes the current position of the company that includes operational costs, calculations, and profitability. Such plans also give information regarding marketing, hiring, and other technology costs. Typically, an internal business plan includes market analysis explaining targeted demographics, market size, and markets positive effect on the revenue of the company.
Strategic Business plan
A business can draft a high-level view of the company's goal and the policy regarding how to achieve the target under a strategic business plan. A strategic plan is a foundational plan for any business. There are different strategies for different companies. In many cases, the businesses include the following five elements in their strategic business plan:
- Mission statement/Business Vision
- Success Factors
- Objective achieving strategies
- Implementation schedule
The strategic business plan sets the big goals of the business by inspiring the employees to work together for the success of the business.
Feasibility Business Plan
This type of plan answers two inquiries about a newly suggested business venture that is who is going to purchase the services of the company or will a company be able to earn a profit.
Feasibility Business plan covers sections explaining what the need of the product or the service offered by the company, targeted demographics is, and capital required. These type of plans always ends up with the recommendations to be carried forward.
Operational Business Plan
The elements relating to the company's operations are explained here. Employee responsibility is summarised in an operational business plan.
Growth Business Plan
These plans are also known as an in-depth description of the proposed growth that is drafted for external and internal purposes. A complete description of the company is included in the growth description plan. If any investment required in the company for its growth, a brief description of about company's management and officers. The plan should provide detailed information to satisfy the potential investor. In the case, the company is not asked by any investor than the plan will include the details regarding the financial sale and expense projections.
The business plan guide owners of the company, its investors, and management through various successive stages of the company.
What is the business plan process?
The business plan procedure is as follows:
Generation of an idea
Project Report Preparation
Evaluation control and review
Generation of idea
The first step in any business planning process is the generation of an idea. It differentiates entrepreneurs from the general business. There are certain sources for new ideas that entrepreneurs can get are
- Existing Companies
- Research and development (R&D)
- The employees
- Retailers and dealers
In the next step, it is crucial to scan the factors that will affect the business ideas. The elements can be both external and internal surrounding the business.
- External environment includes:
- Socio-cultural appraisal
- Technological appraisal
- Economic appraisal
- Demographic appraisal
- Government appraisal
- Internal environment includes-
- Raw materials
- Human resource
It refers to conduct a detailed report on every aspect that is relevant to the business. The analysis includes-
- Market analysis is undertaken to calculate the demand and market share of products and services in the future.
- Technical and operational analysis is conducted to assess the functional ability of the proposed business enterprise
Project report preparation
It is a document which describes step by step strategies involved in running the business.
Evaluation, Control, and Review
The company functions in a dynamic environment, so it has to monitor and review all the strategies as well as the policies to compete in an existing market.