What is a Business Plan?
A business plan is a document that outlines the goals, objectives, and financial expectations of the company. It is used to attract investors and lenders. A business plan might also serve as a general guideline or a marketing map for managers of the company.
A business plan consists of the following sections according to Fintalent’s Business Plan Consultants. These are:
The first section includes information such as the name and address of the company, a description of the product or service, an executive summary and business goals. The second section consists of assumptions made in writing and describes strategies to achieve company goals. The third section contains information about marketing, including advertising and distribution channels. The last sections deals with legal considerations, risks taken by the company, financial forecasts for up to three years, the projected cash flow and a number of other topics. After completing a business plan it should be thoroughly reviewed by experts in your field who can help you make necessary changes or additions before presenting it to potential investors or lenders.
Business plans are to be used for different purposes. A business plan is useful for preparing for a loan application or an investment prospectus. In general, it is used in order to provide investors and lenders with the information they require in order to make an informed decision about the company. A well-prepared business plan will increase chances in getting funding and will make it easier to acquire the necessary capital. A business plan can also help managers stay on track and improve their performance by providing them with an overview of duties and responsibilities as well as projections of financial resources needed for future periods.
Some things to keep in mind when preparing a business plan:
Analyzing the market, analyzing your competition and keeping track of what your competitors are doing is one of the most important aspects of running a company. With a business plan you can provide potential investors with the information they require in order to make an informed decision on whether or not to invest in the company. A business plan will help you come up with a comprehensive strategy for future operations.
A well-prepared business plan is likely to attract investors’ attention, especially if it’s been prepared by professionals with plenty of experience in similar projects. This will increase your chances of acquiring financing and capital.
It is important to keep in mind that a business plan is not a guarantee of getting funding, especially if you are starting a new business. The quality of the product or service you offer, the reputation and experience of managers as well as other factors will be taken into consideration when deciding whether or not to invest in your company.
A successful business plan will also help managers stay on track and improve their performance by providing them with an overview of tasks that need to be completed and the financial resources needed for future periods. In addition, the company can use a business plan as a marketing tool when approaching potential investors, which will save management time otherwise spent on looking for financing opportunities.
If you are running a company, creating a business plan is the first step towards improving your management skills and boosting your company’s performance. A business plan will help you set business goals, as well as achieve them by coming up with strategies for future periods. It will also enable you to develop a comprehensive strategy that takes into account the latest developments in your market and reduces the risks associated with such activities as starting a new project or expanding into other markets. Moreover, it will help you monitor your progress and make changes in order to stay on track.
Before writing a business plan, make sure that all of your assumptions are realistic and based on current market conditions and trends. For example, if you are planning to launch a new product in the near future, you should check whether or not the market is ready for it.
It is also important to note that the terms “business plan” is frequently used with different meanings and sometimes with quite different connotations. The business plan described here aims at acting as a guide for young businesspeople, who will probably not yet have their own business experience and are looking for recommendations on how to develop their business, boost its performance or find financing.
Business Plan Creation
Creating a business plan is not difficult, but on the other hand – it does require that you put some thought into it. In the end, the plan becomes your foundation for achieving your business goals. It will also provide you with a sense of structure and direction to help create more productive work and more time to enjoy the journey along the way.
Steps to create a Business Plan
The first step in creating a business plan is to decide what your goals are for starting (or continuing) a new venture or working within an existing one. You need to clearly articulate why doing so will benefit your organization and help drive results in terms of revenue, profit and efficiency. Before you create a formal plan, however, it’s best to think through these goals in an informal way. This will help you determine your “big picture” and where there is room for improvement.
Start with a big picture of everything your business does (or doesn’t do) and the core competencies that need to be established (or sustained). Ask yourself what the vision of your business is, the mission of your organization and the vision of its products or services.
This will give you a good idea what type of plan to create – its purpose, structure and format. You’ll have to zoom in and out on your plan as you work through different phases and decide which elements of it to focus on.
Armed with your answers, you can now sit down and create a plan from scratch. There are many sources of information available to you, including business plans created by others, standard templates and even books that provide step-by-step instructions for creating a business plan. These can be downloaded, or adapted for your own use according to your own preferences and needs (such as using a different format or style). Of course, you’re free to create one yourself if you prefer the process.
In writing your business plan, you must consider its function. Business plans can be used in three different ways:
Plan – to help you run a business more efficiently and effectively, reduce risk and make better decisions with confidence.
- to help you run a business more efficiently and effectively, reduce risk and make better decisions with confidence. Record – to show future potential customers how your company is different from its competitors, what makes it special and how it is being different from competitors. This can be helpful when seeking funding or investors for your venture or seeking to sell it (or part of it) in the future.
- to show future potential customers how your company is different from its competitors, what makes it special and how it is being different from competitors. This can be helpful when seeking funding or investors for your venture or seeking to sell it (or part of it) in the future. Marketing Tool – to help position your business for maximum return on investment, including funding, sales and partnerships.
Regardless of which purpose you use or combine them all, you need to start with a vision for the future as you envision it. This includes why you started your business and where you want it to go. Goals should include what kind of impact you want your business (and products/ services) to have on customers and the industry as a whole.
A plan or vision can also include an introduction to the “who, what and why” of your company. There should be a description of your company’s history, including how you were formed, the decisions you made and how you’ve grown. A section on philosophy and leadership should also be included (and should include a statement of purpose and mission), as well as providing a brief overview of who is involved in the business.
Your mission statement will help in developing your plan, but it must be more than just words on paper. It must reflect who you are, what you do and what it is that will bring value to your customers over time.
Knowing your “why” is critical to achieving your goals and objectives. It enables you to prioritize, focus and make the right decisions when they need to be made. There’s nothing quite like a clearly defined mission statement to keep you focused and moving in the right direction – especially when there are no distractions.
Your plan should also include an overview of how you will use your vision (and mission statement) in order to create your long-range objectives. You should include the big picture of what’s important when it comes to resources, marketing and sales, employees and networking – including how you plan on using all of these things effectively over a period of time.
A clear description of the market you are in and at least one key competitor will help you determine which elements of your plan have to be adjusted. This can serve as a guide for more research (and more information about your competition), and it provides the basis for making important decisions about what’s important to your company.
Now that you’ve got a good sense of where you are going, how you’re getting there, who’s in your way and what’s taking place behind the scenes, it’s time to work through each element that makes up plan. For example, you may decide that partnering with a supplier or taking on new employees is essential for providing value for customers.
Once you’ve established the “who” and “what” and set goals for each, you can decide what elements are necessary for achieving those objectives. These can include the timeline to achieve these goals, the resources (such as money, time and effort) that will be needed to achieve them, how to measure progress and who exactly will be doing what.
The next step is making sure your plan is realizable. Be realistic when you make plans as they can never be perfect – they’ll inevitably show areas where they’re not working as well as areas that need improvement. You’ll soon realize that it doesn’t matter how good your business plan looks once it’s written – unless it is implemented it’s just a formality.
Reality is the best teacher and it will open your eyes to where you need to adjust your plan. It will also tell you if a goal or objective can be met or if adjustments have to be made. You should also be able to identify what’s not working for your business and what needs to change.
It’s important that this type of revision doesn’t take place too frequently – the purpose of an action plan is to provide direction and focus so that decisions are made strategically and carry the greatest possibility of success. Changes after they’ve been put into action are often less effective than they could have been if they’d been made before implementation began.
This is where a business plan becomes more than just a piece of paper. Your business plan should be updated regularly to reflect changes in the market, industry and strategy based on feedback from customers and employees. The revisions should be submitted to the board of directors and approved (if applicable) in order for it to become an official part of your company’s planning process.