A Business Plan is a document that describes or explains, in detail, the objective, goals and means to achieve goals of a certain company or organization. A business plan is used in various ways, from pitching an idea for a start-up, to presenting the performance of an established company to potential investors or financial institutions etc. The aim of a business plan is to give a clear idea of what a company is constituted of, to its finest units.
It is a roadmap that explores all essential aspects of a company, ranging from planning to financing to marketing, and lays out a detailed process for operation. Once such a detailed roadmap is established, both internal and external bodies of an organization know clearly as to what they are looking at, whether it is terms of approaching the organization for employment, investment or financing etc.
Clearly defined goals and processes also make the functioning of a company that much smoother. Therefore, it is especially useful for newly setting up or to be set up companies, while also utilised and updated by existing companies. New companies require a detailed, viable and promising business plan to get their initial round of investments.
Business plans are given such importance, not only due to mapping out a whole business idea, but also because it allows for speculating and estimating possible risks, obstacles and accordingly viable solutions, beforehand. It allows premeditated strategies to come up by defining and speculating the goals, resources and costs to be met.
Important elements of a business plan:
The plan varies according organization’s industry and size. Each plan is unique and may include more categories and aspects for a detailed image.
- Executive summary: An outline of the company and its leadership, mission, structure, location, employees, and operations.
- Products and services: Outline of the products and services the company offers, including patents, original and proprietary technology. It may also include details regarding research & development, pricing, lifespan, manufacturing process and benefits to consumers.
- Market analysis: Details of competitors in the industry and the target consumer market. From analysing competitors and the company’s own weaknesses and strengths in relation, to analysing the demand that is expected to be generated from the target consumers.
- Marketing Strategy: Plans and approaches to communicating to, attracting and maintaining a consumer base. Includes aspects of marketing, from market research, to advertising campaigns and distribution channels.
- Financial planning: Procedure and plans for financial requirements and projections, consisting of balance sheets, financial statements and other information for existing businesses. For newer companies, potential investors, targets, estimations and projections for first few fears of functioning are mentioned.
- Budget: An estimate to be met for the smooth operating of a company, that includes expenses generated between business to consumer and back. It includes costs of production, transport, lease, development, marketing, wages etc that is incurred in the duration of a business cycle.
More sections can be included if deemed relevant to the business model. However, these can be considered as minimum requirements in what is expected in a business plan.
Tips for a good business plan:
- Clear and concise
- Defined goals, targets and operations
- Categorizing expenses, investment and risks
- Analysing strengths and weaknesses for the purpose of strategizing
- Relevant and credible projections of finance
- Clearly identified stakeholders
- Strategies for consumer reach and loyalty