A business plan is a detailed analysis of a company’s business. It includes the detailed reports of the company’s service or product, production methods, marketing strategy and clients, financial status, and other aspects.
Why Business Plan?
A business plan is an important tool in every business start-up. It provides information on the business, whether it is a new one or an existing one.
For a business plan to be effective, the business in question should have an upward trend. It is good to include detailed information on the business’s past and present status in a business plan. But the important thing is to present a beneficial prospect of the business.
No matter what company or organization you present, the business plan, facts, and details matter a lot. So, a good business plan should be informative, organized, and factual.
Who Needs A Business Plan?
A business plan identifies, describes, and analyzes a business. It provides a clearer picture of the technical, economic, and financial aspects of the business.
Business plans generally fit better with people who are serious about their business. If you are looking for a temporary freelance job or something that can instantly earn you lots of money, business plans are not for you.
Business plans delve into the in-depth background and status of a business. So, if you are going to commit to serious long-term business, you should take planning seriously. A good business plan can make a huge potential difference in your business.
There are several opinions about who needs a business plan. Many people opine that business plans are for those who are launching new businesses or applying for loans. But there is more to a business plan than just that.
Business plans are not only essential for starting a new business, but they are also important for existing businesses. Businessmen should maintain a business plan to record and update the change in market trends over time.
1. New Businesses
A business plan is vital for every new business to thrive. Business plans often follow start-up businesses as it breaks down the image of the business for better understanding. The business is sub-broken into smaller aspects like product/service information, sales forecast, expenses, and others.
In a business plan for a new business, there are some topics that are more prominent. These include the idea of the company/business, goals, and missions, and why the founders are the right fit for the business. A start-up business plan should also have documentation of the initial start-up costs, the development stage, and forecast.
2. Existing Businesses
The secret behind every successful business is effort and a killer business plan. According to a study by Prof. Andrew Burke, the founding Director at Cranfield School of Management, businesses with business plans grow faster by 30% than those without one.
Business plans in existing businesses not only help the founder to address the changes in the market. It also provides better clarity and understanding of the business. A business plan can also warn of potential problems so that the owner can tackle them before it harms the business.
Now that we know that both new and existing businesses need a business plan, the next question is – who prepares it?
Chief Executive Officer (CEO)
The CEO is the main supervisor of a business plan. He oversees the business planning process.
A marketing/sales manager should have a business plan to keep a record of the market trends, growth potential, rivals status, and others.
Development and Production Manager
The development and production manager plans on the timings of the new product developments and launches.
A financial manager is one of the most important business planners. He keeps a record of the figures in business.
What To Include In Your Business Plan
There are several things to include in your business plan to make it effective and convincing.
Make A Detailed Study Of The Present Scenario
The current market plays an important role in every type of business. That is why it is wise to carve out a neat plan for the present market.
- Write about the business – its current stand in the market and its prospective outlook.
- Keep a record of the potential competitors and the level of competition it holds.
- List the factors that determine the success or failure of the rival business.
- Explain what makes your business stand out.
- Make a note on the strengths and weaknesses, and threats and opportunities of your business.
- Specify if your business targets a particular market.
Plan Out The Objectives In Your Business Plan
Everyone trusts a business with an aim or goal over one that does not have an objective. These are some of the things you can include in the objectives section:
- State your reasons for choosing a particular business.
- Provide a description of the business and the type of services or products it offers.
- Carve out a beneficial strategy to implement in the business in the long run.
- List the specialization and differences of the business.
- Point out the areas that need special attention to development.
Include A Strategic Plan
It is important to be clear about your mission. Strategic planning is an important factor in determining the success of the business.
- Clearly state the mission of your business.
- Elucidate how your strategies will be beneficial in the long run.
- Make a note on the specific plans to be implemented to fulfill long term objectives.
- Prepare a structural presentation of the business marketing policy.
- Compile a list of the number of employees in the business.
- Include your staff management strategies.
- Reveal whether the business will be financially secure in the long run.
Provide A Clear Financial Plan
Nothing beats a clear and precise finance document. After all, a good financial plan is one of the top aspects of a successful business.
When making a business plan, providing a clear financial plan is a very important step. A financial plan keeps an account of the financial handling of business. It also analyzes the business profitability and economic gain in the business.
Document Your Claims
Once you have included all the necessary elements in your business plan, it is time for documentation. Attach relevant documents that support your claims at the end of your business plan.
Although this is a fairly tiring process, it is an important step in creating a great business plan. Documents are the proofs of what you state in your business plan. Without it, anybody can make any claim and get away with it.
The main thing to keep in mind is that your claims should correspond with your documents and certificates.
Carefully go through the business plan that you have written and see what documents should be relevant. You can add marketing study documents and other related certificates.
Sometimes, some investors might want to see certain documents to make decisions. That is why it is important to keep your documents ready and available anytime.
Below is the list of documents that you should attach to your business plan:
- Cash flow statement
- Income statement
- Marketing and expansion plans
- Balance Sheet
- Credit reports
- Maps or diagrams of assigned space
- Detailed financial projections
- Capital equipment list
- CVs of the main employees
- Letters of intent
- Reference and support letters
Now that you know what a business plan is all about, it is time to get started. Although it can take years for a business to flourish, the secret is to plan and hustle simultaneously and consistently.