Planning is an important part of before starting any business & making a written business plan is an important part of this process. Business plan is a kind of map of your business (blue map) or blueprint in which general information about your business, business goals & how to achieve those goals are written. The business plan not only serves as your guide but is also necessary for many important tasks like Bank Loan, Startup Funding or Business Partnership.
What is business plan
It is planned before doing any work. The same thing applies to Business as well, where the written form of this plan is called Business Plan. Actually, a Business Plan is a document that answers all the questions like ‘what’, ‘why’ and ‘how’ of a new business. like :
- What is our occupation?
- Why do we want to do startup business?
- How will we do this business?
We get answers to all these questions through a Business Plan. Business plan is mainly for a new business, but even if an existing business is doing something new, a new business can be carried forward by making a business plan. Business plan doesn’t just create a start-up but also establishes the business. Changes can also be made in business plans from time to time according to circumstances.
Why a Business Plan is created:
Every business must have a written business plan. Through his Business Plan, the businessman clearly spells out the goals he has set and the strategy he is planning to achieve. A business plan is very important for the following purposes: –
- Applying loan for a business in the bank.
- Fundraising for your small business or startup in other ways like venture capital firms or crowdfunding.
- Do not apply for any type of business related subsidy or any scheme.
- For business partnership and franchise etc.
A well-designed business plan not only makes it easier to obtain funding from banks and other external sources, but it is also helpful in internal operations.
How to Write a Good Business Plan
Any plan is made very thoughtfully. It does not matter if you’re making your 1st business plan. For a startup. Before starting any business, its plan is prepared for a business plan. Therefore, some things are taken care of before making a good startup business plan. Prominent among them are:
What is the objective in a business plan?
Who is the Business Plan being made for? Among people reading this, are Investors or Bankers who have invested in the business.
What is included in your business plan?
Do you need a brief detail for a startup business plan?
Business Plan Template
However there’s no any fix format of any business plan and it’s created in several ways as per the requirement. Generally a business plan has Following section: –
Executive Summary is the first part of any business plan and under executive summary all the necessary things associated with the business plan or written in summary form. Business Nature, Legal Structure, Product or Services, Target Market, Business Model, Management Team, Marketing Plan, Goals, Financial Projection, Fund or Loan needed etc. are summarized.
Company or Business Overview
In this a part of the business Plan, the whole information associated with your business is written thoroughly like
- Nature of Business.
- What you will sell in future – Product or Service.
- What is your target market?
- The legal structure of the business implies that the business could be a sole, partnership or company,
- Staff and management team,
- Commercial site
Apart from this, all the things associated to the product or services of the business are written in detail such as –
- What problems are your product or services solving or what are people doing?
- How different are your products or services from others?
- Why people will buy your product.
- How will you make your product and is this approach the best?
- Have you registered a Trademark of Products and Services, Patent etc.
Product / Service Description can also be shown during a separate section.
In this section all the important things related to the target market of your product or service are analyzed such as: –
- Target Market, Market Size and Demand.
- Who You Will Sell – Target Customer, Their Behavior, Class and Purchasing Power.
- Who are your competitors and how much market share do they have, their weaknesses and strengths .
- Important Changes in Demand and Market in future.
This section describes all the policies that you want to use to extend your product and services to customers and use them for market promotion.
- How to make your products or services for your place in the market.
- Who are your competitors and how much market share do they have for their strengths and weaknesses.
- What will be your pricing policy.
- How can you promote your product or service like marketing, advertising or promotion Social Media etc.
- How can you deliver your product or services to the client – distribution channels
- What will be your Selling Strategy?
This is an important section in which Business Operations i.e. “How Business will Run” contains detailed information regarding all things associated with it such as:
- Business Location – Where will you do your business? Will you buy or rent a place?
- Production Facility and System – What kind of production facility do you have and is it according to the requirement?
- Purchase Plan – How will you buy your inputs and this is the best or right way.
- Production Plan – How can you produce your product? Based on demand or by estimates.
- Workforce Structure and their roles – The positions, scope and responsibilities of your staff.
- Systems and Information Technology (IT) – What is going to be the most Information Technology system of your business.
- Store Facility – What quantity stock will you keep and where?
Financial analysis is the most important part of a business plan because this section presents all the important things and Projection of your business in figures or numbers. It is from this part that the bank or venture firm comes to know the financial position of your business and the capital requirement on which the banks, lend and Venture Capital Firms invest. This section mainly focuses on the following points:
- How much capital or fund do you need for the business and where will you use it – capital / fund requirement.
- How will you raise this capital – Loan, Venture Funding, Crowdfunding, Own Capital etc.
- For how many years you’ll take a loan, what’s going to be its security and the way to repay it.
- What will be the revenue / income sources of your business – Sales, different Incomes.
- What will be the cost of your business – purchase, interest payment, rent etc.
- Profit & Loss Forecast for next 3-5 years of your business based on Sales, Revenue and Expenses.
- Growth Forecast of your Business.
- Business Risk and its possible consequences.
Important Statements / Forecast of Financial Analysis
- Capital Requirement and Sources of Capital
- Sales Forecast of 3-5 Years
- Profit and Loss Forecast of 3-5 Years
- Cash Flow Statement
- Balance sheet