A business plan is a written document describing a company’s core business activities, objectives, and how it plans to achieve its goals. Good business plans should include an executive summary, products and services, marketing strategy and analysis, financial planning, and a budget.
IMPORTANCE OF BUSINESS PLAN:
- To give direction to the vision formulated by the entrepreneur.
- To objectively evaluate the prospectus of business.
- To monitor the progress after implementing business plan.
- To seek loans from financial institutions.
- To visualize concept in terms of market availability, organizational, operational, and financial feasibility.
- To guide entrepreneur in actual implementation of plan.
- To identify actual strength and weakness of plan.
BUSINESS PLANNING PROCESS:
1. Research: Detailed research into the industry, customers, competitors, and costs of the business begins the process. Research should be documented and organized carefully with the information gathered and the source as there is a need to cite sources within the plan.
2. Strategize: The information from the research should inform the strategy you choose for your business. Revisit the strategy you created even before your research and dig deeper into decisions on appropriate marketing, operations, and hiring for the first five years of the company’s life.
3. Calculate: All of the activities you choose for your strategy come as some cost and (hopefully) lead to some revenues. Sketch out the financial situation by looking at whether you can expect revenues to cover all costs and leave room for profit in the long run.
4. Draft: With financials more or less settled and a strategy decided, it is time to draft through the narrative of each section and component of your business plan. With the background work you have completed, the drafting itself should be a relatively painless process.
5. Revise and Proofread: Revisit the entire plan to look for any ideas or wording that is confusing, redundant, or irrelevant to the points you are making within the plan. Finally, proofread thoroughly for spelling, grammar, and formatting, enlisting the help of others to act as additional sets of eyes.
Elements of a Business Plan:
- Executive summary: This section outlines the company and includes the mission statement along with any information about the company’s leadership, employees, operations, and location.
- Products and services: The company can outline the products and services it will offer, and may also include pricing, product lifespan, and benefits to the consumer. Other factors that may go into this section include production and manufacturing processes.
- Market analysis: A firm needs a good handle of the industry as well as its target market. It will outline who the competition is and how it factors in the industry, along with its strengths and weaknesses.
- Budget: Any good company needs to have a budget in place. This includes costs related to staffing, development, manufacturing, marketing, and any other expenses related to the business.
- Financial planning: The company should include its financial planning and future projections. Financial statements, balance sheets, and other financial information may be included for already-established businesses.