How to Write a Business Plan: Things to Keep in Mind
A business plan is the documentation of a company's overall purpose. It includes the services and/or products provided by the company, its objectives, goals, strategies, finances and so on. It is a vital blueprint that not only helps you maintain your business standard, but is also important for investments, partnerships, loans and other such purposes.
A written plan will give you a concrete ground to build your business on. It provides clarity and also helps in identifying scope for loopholes that could arise in the future. Therefore, having one in place before company registration is important.
With a lot riding on it, writing a business plan could seem to be quite daunting. But if you put some time and thought into it, putting it together wouldn't be that difficult a task. This article enlists a few things to keep in mind while creating your business plan.
The Audience of Your Business Plan
You are writing the business plan not only for yourself but also for external funding. Banks, shareholders, potential investors would be going through your business plan to determine the purpose of the business. Additionally, it should also easily convey the future plans of your business. This will give the investors an idea about their expected returns on their investments and the duration for the same.
Apart from that, a business plan has a number of other benefits. It can also help you monitor your company's performance and keep track of progress. This way, any disparity will immediately come to your attention and you would get a chance to rectify it.
Your business plan should be directed to the audience. Formulate your business plan with the diversity of the audience in mind.
Contents of the Business Plan
A business plan should essentially define your business and break down the details in simple terms. It should be clear and focus on the following important points:
- An overview of your business: This is where you describe your business in short. This section needs to cover the important points that you wish to highlight since a lot of investing decisions are taken based on this.
- What your business has to offer: In this section, you need to include the products or services that your company is going to offer. Additionally, you need to include your target audience, the purpose and the basic idea behind the offerings.
- A concrete marketing strategy: A business doesn't end with its services and purpose. Spreading awareness and selling these to your target audience bind it all together. Your marketing strategy will determine how you plan to achieve this. Therefore, having a working strategy in place is absolutely crucial.
- Infrastructure: This includes the team of professionals you plan to hire and the machinery you plan to use to achieve what you have planned for your business. You need to get down to the details of each. For example, the credentials, experience and skills for the former and the details of the office space, IT systems, electrical components, other equipment and so on for the latter. You can split this into two sections according to your preference.
- Financial predictions: What is the expected financial outcome of your business? What are your ideas of revenue generation for your company? How are your plans going to spell out into numbers? These need to go into this section.
As a budding entrepreneur, you will be expected to have a thorough idea of the market since this will reflect on the business plan you frame. Some of the factors that you need to look into are:
- An estimation of the market value of the products or services of your company
- Your strategies to gain access into the market
- Estimated path of growth
- The approximate market size
- The market conditions and scopes
These should be included in the business plan you formulate. Apart from this, a knowledge about your competitors is going to play a major role as well. You need to have an idea about how you plan to stand out from the existing players and create a niche for your business.
You need to keep these points in mind while framing your business plan. As your business grows, you can tailor and build on the existing plan accordingly.