Is Your Business Plan Ready? What are you Waiting For?
IS YOUR BUSINESS PLAN READY?
Say, What on earth is a Business Plan?
A Business Plan is a comprehensive document that while outlining the intent to do a certain business describes the environmental situation the business faces, market opportunities, the requirements of doing the business, costs of doing the business, revenues that would be made out of it and the profits that the promoters and investors can hope to get. A business plan is supposed to the most important document that any business must have before it is launched. The investors and the due diligence experts that would review your business, would be particularly interested in a business plan as it would tell them about the returns that they would get for the money that they invest in that business.
A well-structured business plan document is absolutely important and every business must have one. In practice however, business plans have been reduced to filling pages after pages of boring rhetoric, simply picked up from somewhere in Google and placed in the document…..sometimes without changing a word. A well-thought-through business plan can be a game changer in any business. In this article here, we provide a simple guide to how a business plan is to be made and what its essential aspects should be.
- Title Page should introduce the product: The title of the plan should be used to convey what the business plan is all about. It should be slightly descriptive and introduce the product then and there. Something like, ‘Business Plan for production and sale of organic pumpkins’ or ‘Business Plan for setting up a 3-D Printer manufacturing and distributing company’ may be acceptable. But a title like ‘Business Plan’ or ‘Business Plan with financials’ is not acceptable.
- Executive Summary should be crisp and must bring out essential elements of the plan: As the name suggests, this is a typical summary of your business plan. You need to pull out the high-points and low-points of your business plan and put it here. Anyone reading the executive summary should get a quick overview of what the plan contains. As a general rule, the more transparent you are about your low-points and on how you are going to manage them, the more convincing would your business plan be. Key figures from financial projections should be given.
- Macro-Economic, Country Outlook should be included, if the relevance can be explained: There is no need to simply include a section on Macro Economic outlook, if you can’t explain why the macro-economic indicators are relevant for your business. Every section that you include in the plan, must have a relevance to it. This section is often the most abused section in most business plans as the words, sentences and paragraphs are usually a simple cut and paste from some other document. Avoid cut-copy-paste.
- Industry Outlook: This is a ‘must-have’ section on your plan. This gives the reader a general idea of what the industry looks like in which your product / idea is going to operate.
- Competition Scan: Another important section that gives details of competing products that are already available in the market. If there are competitors that are doing well, it is helpful to mention because this goes to prove that the product that you are talking about has precedence of success in the market.
- Operational Plan for your business: This is the most critical section of your business plan. In here would be covered the step-by-step approach that you would adopt to make your business a success. Starting with formation of a formal entity to produce and market the product to full-blown financial projections will be covered under various sub-headings under this section. Some of the important sub-headings here would be:
- Product Description
- Unique Selling Proposition
- Customer Segment – Who are your customers?
- Market Description – Size, Distribution, Dynamics,
- Physical Infrastructure – Office, systems etc.
- Profiles of promoters, other staff required to run the company, Organizational structure and hiring plan
- Project Plan – Timelines and milestones for each item
- Marketing Plan
- Financial Projection (Ideally a 5 year projection of financial position of the business) – This should include Projected Profit and Loss Account, Projected Balance Sheets, Projected Cash Flow Statements
- Most Important: What are the key risks and what can go wrong?
The above is the basic structure of a business plan. Any start-up organization must have a business plan, at least a basic one with financials. If you are looking to go for investments, you must have a comprehensive business plan as the investors would be interested to know a lot of details. Ensure that you have a good business plan for the success of your business.
If you do not have one, we can help you in building a basic or a comprehensive business plan, along with complete financial projections.