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“You never make the shots you don’t take!” Michael Jordan
A good business plan guides you through each stage of starting and managing your business. Your business plan is a roadmap on how to structure, run, and grow your new business. It helps you think through the key elements of your business.
Business plans will enable you to get funding or bring on new business partners. Investors want to feel confident they’ll see a return on their investment. Your business plan is the tool you’ll use to convince people that investing in your company is a smart choice.
There’s no right or wrong way to write a business plan. What’s important is that your plan meets your needs. Expect the business plan to be very detailed and is comprehensive. Lenders and investors commonly request a very detailed plan consisting of the following sections:
Note for the students:-
Before we start, the students should know what they really understand by a business plan. For this purpose, students are required to answer the following with respect to their idea of start–up.
Business Plan
A business plan can be written for several purposes. It is a professional document that can be written for banks, government agencies and for stakeholders. Before start working on a business, it is mandatory to work on the business idea. In this way, it is a blueprint of what is to be done and how it is to be done.
It is very essential to have clarity in our own minds about the nature of our business. Once we are familiar with all the pros and cons of our business, we can modulate it for any required form.
This brief will clear some doubts of a beginner.
Process of a business plan:
Defining Business Plan:- This is the most crucial part of a business plan. When a student starts thinking to start his own startup, his /her ideas for business are very vague. A student’s thinking circumference is very limited. For example:- if one wants to start selling garments through online , then they are not clear on what type of dress they will be selling. Initial they can have a limited idea – for example- they think that they will sell men’s jeans, but very soon they will realize that they need to be very specific in dealing with items. Even jeans have a good number of varieties. Will it be for boys or for grown-up persons etc.
Basically, we need to answer the following questions:
- Who are the owners of our company? Backgrounds? Experience in sector/business?
- What motivated us to start our company? Why now?
- What sector we are in?
- What products/services do we provide?
- Who is our target audience
- What does the future of our industry look like?
- How we can measure the profits.
- What are the next steps?
Thus, this is a process of the very beginning of a start-up.
Submitted By:
Dr. Shilpa Jain
Executive summary
“I never dreamed about success. I worked for it.” Estee Lauder
Briefly tell your reader what your company is and why it will be successful. Include your mission statement, your product or service, and basic information about your company’s leadership team, employees, and location. You should also include financial information and growth plans if you plan to ask for financing.
Company description
“Wanting to be someone else is a waste of the person you are.” Marilyn Monroe
Use your company description to provide detailed information about your company. Go into detail about the problems your business solves. Be specific, and list out the consumers, organizations, or businesses your company plans to serve.
Explain the competitive advantages that will make your business a success. Are there experts on your team? Have you found the perfect location for your store? Your company description is the place to boast about your strengths.
Market analysis
“Before you build a better mousetrap, it helps to know if there are any mice out there.” Yogi Berra
You’ll need a good understanding of your industry outlook and target market. Competitive research will show you what other businesses are doing and what their strengths and weaknesses are. In your market research, look for trends and themes. What do successful competitors do? Why does it work? Can you do it better? Now’s the time to answer these questions.
Organization and management
“I am not a product of my circumstances. I am a product of my decisions.” Stephen Covey
Tell your reader how your company will be structured and who will run it.
Describe the legal structure of your business. State whether you have or intend to incorporate your business as a C or an S corporation, form a general or limited partnership, or if you’re a sole proprietor or LLC.
Use an organizational chart to lay out who’s in charge of what in your company. Show how each person’s unique experience will contribute to the success of your venture. Consider including resumes and CVs of key members of your team in the appendix.
Service or product line
“Do or do not. There is no try!” Yoda
Describe what you sell or what service you offer. Explain how it benefits your customers and what the product lifecycle looks like. If you’re doing research and development for your service or product, explain it in detail.
Marketing and sales
“If opportunity doesn’t knock, build a door…” Milton Berle
There’s no single way to approach a marketing strategy. Your strategy should evolve and change to fit your unique needs.
Your goal in this section is to describe how you’ll attract and retain customers. You’ll also describe how a sale will actually happen. You’ll refer to this section later when you make financial projections, so make sure to thoroughly describe your complete marketing and sales strategies.
Funding request
“Whether you think you can or you think you can’t, you are right!” Henry Ford
If you’re asking for funding, this is where you’ll outline your funding requirements. Your goal is to clearly explain how much funding you’ll need over the next five years and what you’ll use it for.
Specify whether you want debt or equity, the terms you’d like applied, and the length of time your request will cover. Give a detailed description of how you’ll use your funds. Specify if you need funds to buy equipment or materials, pay salaries, or cover specific bills until revenue increases. Always include a description of your future strategic financial plans, like paying off debt or selling your business.
Financial projections
“There is no passion to be found playing small, in settling for a life that is less than the one you are capable of living.” Nelson Mandela
Supplement your funding request with financial projections. Your goal is to convince the reader that your business is stable and will be a financial success.
If your business is already established, include income statements, balance sheets, and cash flow statements for the last three to five years. If you have other collateral you could put against a loan, make sure to list it now.
Provide a prospective financial outlook for the next five years. Include forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets. For the first year, be even more specific and use quarterly — or even monthly — projections. Make sure to clearly explain your projections, and match them to your funding requests.
This is a great place to use graphs and charts to tell the financial story of your business.
Appendix
“If I had nine hours to chop down a tree, I’d spend the first six sharpening my axe.” Abraham Lincoln
Use your appendix to provide supporting documents or other materials that were specially requested. Common items to include are credit histories, resumes, product details and pictures, letters of reference, licenses, permits, or patents, legal documents and other contracts.