Planning is an important process before starting any business and making a written business plan is an important part of this process. A business plan is like a map of your business Map or Blueprint. In which general information about your business, business goals, and how to achieve those goals are written. Business plans not only to act as your guide but are also necessary for many important tasks like Bank Loan, Startup Funding, or Business Partnership.
It is very important to make a business plan for almost all types of business.
What is Business Plan?
It is planned before doing any work. The same applies to a company where the written form of this scheme is called a business plan. Actually, Business Plan is a document that answers all the questions like ‘what’, ‘why’ and ‘how’ of a new company. like
- What is our business?
- Why do we want to do this business
- How will we do this business?
We get answers to all these questions through Business Plan. A business plan is mainly for a new company, but even if an existing company is doing something new, a company can be carried forward by making a business plan. Business plan does not just create a start-up but also establishes the company. Changes can also be made in the business plan from time to time according to the circumstances.
Why a Business Plan is created
You can think about what is needed to make a business plan. Through his Business Plan, the businessman clearly states the written goals of his set goals and what strategy he is planning to achieve those goals. A business plan or business plan is very important for the following purposes.
- Apply for Business Loan in Bank
- Fund raising for your Small Business or Startup in other ways like Venture Capital Firm or Crowdfunding
- Apply for any kind of Subsidy or any scheme related to Business
- For Business Partnership and Franchise etc.
A well-designed company plan not only makes it easy to get funding from banks and other external sources, but it is also helpful in internal operations.
How to Create a Good Business Plan
Any plan is made very thoughtfully. The same thing applies when creating a business plan. Before starting any company, its plan is prepared as a business plan. Therefore, some things are taken care of before making a good business plan. These include
- What is the core objective of creating this business plan?
- Who is the Business Plan being made for? Among the 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 or detailed company plan?
When these questions are answered, a businessman starts making his business plan. In any one successful and clear business plan the focus is on the following topics.
1. What is the purpose of business – a well-designed business plan can tell the objectives of any company? Through this business plan, the businessman reveals what he has planned for his future. The details of what the people associated with the company will benefit from these objectives, also goes through the business plan.
2. Explanation of the clear description of Business – Through Business Plan, a complete description is found about any company unit. It is through this company plan that another person gets to know how you started your company and what is your objective.
3. What are the products and services of the business – While designing the business plan, the businessman can decide what type of products he has to produce and what services to offer.
4. Assistant in market analysis – When a businessman prepares a business plan, he also analyzes his related market before it. It is only through this analysis that the advantages and disadvantages of the future can be known.
5. Description of business structure – In any business structure its employee and managerial capability are known. By making a company plan, one also gets to know about the company structure.
6. Use of resources – The best means of any business unit is the money put into it and the time of the businessman. When making a company plan, you have to decide how to use both these important resources.
7. Goal Setting – For any work to be done successfully, it is necessary to determine its goal. The determination of company goals becomes simple when creating a company plan.
Business Plan Template
However, there is no fixed format of any company plan and it is made in different ways as per the requirement. Generally, a company plan has the following parts.
The Executive Summary is the first part of any company plan and under it, all the important things related to the company plan are 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 Required, etc. are summarized.
In this part of the company plan, the complete information related to your company is written in detail like
- Nature of Business
- What you will sell – Product or Service Description
- What is your target market
- The legal structure of the business means that the business is a sole, partnership or company,
- Staff and management team,
- Commercial site
Apart from this, everything related to the product or services of the business is written in detail such as
- What problems are being solved by your product or services or what are the people doing?
- How different is your product or services from others?
- Why people will buy your product
- How will you make your product and is that method the best?
- Have you registered Trademark of Products and Services, Patent etc.
Product / Service Description can also be shown in a separate section.
In this section, all the important things related to the target market of your product or service are analyzed like
- Target Market, Market Size and Deemand
- 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 strengths and weaknesses
- Important Changes in Demand and Market in the future
This part of the company plan is considered very important. This section describes all the policies that you want to use to reach your product and services to the customer and market promotion. Under this section, you have to define the following things
- How to make your product or service your place in the market
- Who are your target customers who will show interest in your product or services first and how will you reach them
- What will be your pricing policy
- How will you promote your product or service like Direct Marketing, Advertisement Social Media etc.
- How will you deliver your product or services to the customer – distribution channels
- What will be your Selling Strategy?
This is an important part in which Business Operations i.e. “How Business will Run” contains detailed information about all things related to it such as:
- Business Place – Where will you do your business? Will you buy or rent a place?
- Production Facility and System – What type of production facility do you have and is it according to the requirement?
- Purchase Plan – How will you buy your Inputs and is this the best way
- Production Plan – How will you produce your product? Based on Demand or based on Estimates.
- Workforce Structure and their roles – Your employees’ positions, scope, and responsibilities
- Systems and Information Technology – What will be the main IT system of your business
- Store Facility – How much stock will you keep and where?
Financial analysis is the most important part of any company plan as this section presents all the important things and the Projection of your company in figures or numbers. It is from this part that the bank or venture firm comes to know the financial condition of your business and the requirement of capital, on the basis of which banks, lend and Venture Capital Firms invest. This part mainly focuses on the following points.
- How much capital or fund do you need for business and where will you use it – Capital / Fund Requirement
- How will you raise this capital – Loan, Venture Funding, Crowd Funding, Own Capital, etc.
- For how many years you will take a loan, what will be its security and how to repay it
- What will be the revenue/income sources of your business – Sales, Other Incomes
- What will be the expenditure of your business – Purchases, Interest Payment, Rent, etc.
- Profit & Loss Forcast for the next 3-5 years of your business based on Sales, Revenue and Expenses
- Growth Forcast of your Business
- Business Risk and its possible consequences
Important Statements of Financial Analysis
- Capital Requirement and Sources of Capital
- Sales Forcast of 3-5 Years
- Profit and Loss Forcast of 3-5 Years
- Cashflow Statement
- Balance Sheet
Business plans are the most important documents of your business which continuously guide you in taking your business forward. Therefore, great care must be exercised in its construction.