Owning a business, and growing them is difficult yet doable. This is the era of startups. However, before starting a business, we should plan, shouldn’t we? So let’s make a solid business plan. Here is how!
What is a business plan?
Have you seen any document that describes a business?
A business plan is exactly that! A business plan is a document that gives a detailed description of a business. It describes the product, services, how it will earn or earn money, its finances, etc. It is a formal document prepared to achieve the target. It is detailed planning of the working of the business. It also provides necessary information about the background of the organization etc. A business plan provides a direction to reach the target destination.
The business plans differ from the type of business, scale of the project, industry and geography. It can be a company or a startup or maybe non-profit or for-profit organizations. Each has a different set of goals to achieve making their business plans different.
Typical structure of a business plan for a Startup Venture
∆ COVER PAGE
Cover page and table of contents are necessary while making a business plan mainly for a startup venture. It has all the basic information about the company. It is an overview of the company’s information. Pieces of information like the company’s name, company logo and other basic, yet crucial information like the address and other contact details. There is no necessity for all the information to be dumped on your cover page. Always make it up to the point. The cover page does the work of the introduction. It should always be professional.
Contents to be included in a cover page for a startup venture
The company logo is unique. These logos trigger the mind into remembering them. It’s a brand identity providing a visual representation of the brand.
While writing a business plan, always make it bold and legible with bold fonts, etc. The title can also relate to your business.
The company name should also be made bold and legible. It is an important factor. The basic contact information should also be provided like the physical address of the company, the official website or contact number, fax number, or email address. It is also useful if you add the name of the executive officers or founder or partners name for easy contact.
- Business plan completion date
- Always write the date on which this business plan was issued.
- Confidentiality statement
- A confidentiality statement offers a protective measure against the disclosure of ideas.
∆ EXECUTIVE SUMMARY
The term in itself defines the content which should go in it. It is a detailed summary of the company. It’s a crucial part of a business plan, should include all the information like what your company does, your target audience, and financial highlights. Even though it’s a summary, you don’t necessarily include all the unwanted clutter into it. Always make it simple yet include all the necessary information. Most people don’t go through the whole of a business plan, but rather have a quick read of your executive summary. Give a detailed summary of the product and services you offer and their importance.
Contents to be constituted in an executive summary of a business plan
A detailed description of your target market is necessary. You should always know to whom you are providing your products or services. Information like the age group, type and gender all fall under this.
Competition exists in business. This briefly describes how your company is different from your competitors. The difference in price, product quality, or any uniqueness of your product or service that would make you outstand your competitors should be included in this. It should be brief.
If it is a startup company, there would be no financial overview, but you would be able to brief the vision or aspirations for the coming years. For an existing company, you can highlight the recent annual sales and growth.
The team is an important factor in any company. The success of the company is in the hands of the workforce and the team behind it. It is crucial for a startup company. Investors would like to know who is behind the idea and why your team would be the right people for the success of the business.
The executive summary of the business plan should describe how much money is required from your investors. By highlighting them in the executive summary, they would get quick access to the financial requirements of your company.
All these factors should be mentioned professionally and perfectly with the very fact that most people tend to run their eyes through the executive summary of the business plan.
∆ MISSION STATEMENT
A mission statement describes your vision. That is your vision on what to achieve and what you have got to offer the target audience. The mission usually stays the same throughout the years of the business as most of the vision tends to remain the same. All companies move forward with a mission to achieve. That should be included in the mission statement of the business plan. It’s an optimistic part of the business plan. The plan should be brief and simple. It is an attractive tool for the future. The overall goal is to be mentioned, with its values and philosophies. This helps you shape your business. briefing about the mission, it defines how to accomplish them.
- Business environment analysis
Analyzing is a crucial part. Do thorough research on environmental factors before stepping forward. Collect all the relevant information and opportunities for your organization. Few of the frameworks that come in handy while analyzing the current business environment are :
- SWOT Analysis
- Porter’s Five Forces Analysis
- BCG Framework
- Product- Market Fit
- 7 P’s of Marketing
- Competitor analysis
Knowing about your competitors would help you to move forward. If you don’t know who your competitors are then you are missing out on a huge opportunity. A competitive analysis shows the strength and weaknesses of your competitors helping you to make your product or service better than your competitors. A competitor’s analysis contains a description of the target audience, details about the products and why your products or services are better than your competitor’s products or services. Also, compare the price of your product or services with your competitors. It is a comparison of all the factors from your competitors.
- Market Analysis /Marketing plan
Thorough research on the aspects of the market is what is included in this. It looks into the size and value of the market. By doing an analysis of the quantitative and qualitative aspects, we can understand the various customer segments, the competition in the market and the environment and the buying pattern. Knowing your market is important while making a business plan.
∆ OPERATION PLAN
An operation plan simply means how your company operates. It can include the whereabouts of your company’s location, equipment, facilities, etc. An effective business plan will include a quarterly operations plan with a corresponding hiring plan, milestones and targets. This plan is what the business will follow and track their progress with respect to.
∆ MARKETING & SALES PLAN
The marketing and Sales plan of a business outlines the major customer acquisition and retention strategies. It also outlines the go-to-market strategy, milestones to be achieved, the projected rate of adoption of product/service, etc. A sound marketing and sales plan shows a clear path to follow.
∆ FINANCIAL PLAN
Components of the business are gathered and expressed in terms of numbers. There are both revenue and startup expenses. If your company is a startup, then you wouldn’t have any financial data, they may rather refer to your personal financial information. However, a ballpark forecasted financial projection, ROI, and company valuation over the next 5 years give a pretty good understanding of the predicted health of the business. If you are a startup and are looking for investment, this document will be the most important one for you.
∆ MANAGEMENT SUMMARY
Every business has a management summary. It simply means the individuals involved in the business. Shows that the people who manage the business are the strength of the company. Investors, financiers, and shareholders are most likely to look at this section since it has the crucial data that they need for decision-making.
A consolidated docket of information outlining and clearly mentioning every aspect of the business is very necessary to monitor, course correct and turn the business into a success.