Create a Business Plan
We will first know what a business plan is before knowing how to create a business plan
A business plan is the formal write-up of the entrepreneurial vision. It also describes the strategy and operations of the proposed venture. Business Plan is all about describing the ecosystem around the particular business. It covers strategies, resources, finance, products and processes.
It is not only required by the owner of the business but it also has external uses. It has various other names like “loan proposal” – when presented to a banker. A venture capital group might call it the “venture plan” or “investment prospectus.”
Every businessman has the idea what he exactly wants to achieve and how exactly will he do that? Nevertheless, it is utmost important to pen down those ideas.
The main purpose of the business plan is to state main objectives of the business. It helps in staying focused at the core activities leading towards the common goal of the organization. It is an honest assessment of your strengths and weaknesses.
Entrepreneur/Business Owner himself has in depth idea of the activities, products, processes of the business. Drafting business plan will enables thinking process through all the aspects of the proposed business and related decisions. However, on legal and financial terms one should reach consultants for their advice and expertise.
The responsibility of drafting business plan is of business owner or top management.
There is no specific rule or format of the Business Plan. However, generally a business plan consists following:
- Cover Page
- Table of Contents
- Executive Summary
- Products and services
- Marketing Plan
- Operational Plan
Let us have brief information about all.
It should contain name, address, logo of the business and should look professional.
Table of Contents
It lists the points covered in the plan with relevant page number.
It is the most important part of the business plan. The Objective of the business should be very well highlighted here.
It should not be longer than a couple of pages at the same time it should cover overall business plan i.e. what will your product be? Who will your customers be? Who are the owners? What do you think the future holds for your business and your industry?
It should be professional, complete, and concise.
Products and services
Describe in depth your products or services (technical specifications, drawings, photos, sales brochures and other materials.
Marketing Plan may include following:
- Market Research
- Market Scenario (including market risk)
- Competitive Analysis
- Distribution Channels
- Sales Forecast
- Legal Aspect
- Credit Policies
- Requirement of one time capital and its source
- Requirement of working capital and its source
- Projections (with assumptions)
- Break Even Analysis
- Return on Investment (ROI) – with assumptions
You can show three to five year cash flow projections, profit/loss projections.
The concluding sections provide details on timing, schedules and milestones, and a summary. The appendix contains reference material for documentation.
As discussed earlier, there is no rule or specific format of Business Plan so the above mentioned list is not comprehensive or complete in itself. You can add/delete/modify as per your need and size and structure of your business.
We hope that you found the above mentioned information useful.
Each plan must be well written and organized, and it must anticipate the many questions that the reader will have about the business. No plan, however, can answer all questions that may arise. It is important, therefore, that entrepreneurs be familiar with all the details so they can respond to potential unanswered questions and critiques.