Do you have a viable business idea? Do you have a product or service to sell? Have you thought of ways to distinguish your idea from numerous others out there? Whether you are starting a business or growing your existing business, a business plan is a key document that you should prepare for the success of your venture.
A business plan helps you to think through the process of running a business. This roadmap document describes how you will structure, run, and grow your business.A good business plan is imperative for attracting the investors and to ensure the success of your company.
Writing a business plan can be nerve wracking, as it involves a lot of trial and error. The business plan is written with the growth phase of the company in mind which is usually 3 to 5 years for most businesses. Even though every business is different and there is no single ideal format for a business plan, here are the following essentials that you should cover in your business plan document.
The executive summary section should be used to briefly describe your company and why you think it will be successful. If investors are part of your target audience for the document, include funding information and financial projections. Remember that this is a vital component of your business plan document and an opportunity to get a buy-in from the reader.
Sell your business here. Describe your story which includes your business as well as the industry. Use specific details such as your customers, partners, and competitors and avoid long descriptions. You should also include your vision and mission statements, and information about your leadership team, employees, and the location of your business in this section. Utilize this section to describe how well your business is organized – such as the expertise your company possess or your unique strategic advantage.
Ideally, this section must cover the following points:
- Gap / Opportunity
- Your solution
- Why is it better?
- Location of business
- Operating Principles
- Legal requirements
- Risk assessment
- Current status
- Future of the market
Market Analysis and Competitive Analysis
Do you understand your market well? How big is your industry and market? Do you know the industry trends and the taste of your target customers? Are you keeping up with the technological trends in your industry? Who are the successful competitors and why are they successful? Do you have a strategy to outshine your competitors? What are the pricing strategies followed by your competitors? What do you know about the sales and distribution channels of these companies? These questions must be answered in this section.
Organization and Management
Describe your organizational structure and the profiles of your team members. This includes their qualifications, areas of expertise, and years of experience in the relevant industry. This section tells the investors about the chances of your success because a competent team is required to run a successful business.
Sales Strategies and Timelines
This section should be able to convincing answer the following questions. How are you planning to sell your products? Will you focus on certain strategies to acquire the market first? Do you have any promotional strategies? How will your product be priced and what is the timeline for these prices? What are your advertising strategies (channels, partners)?
Include descriptions on how you will benchmark yourselves against the industry and a detailed chart of timelines for expansion of your business. Note that this section is going to be cross-referenced to the funding requests and you must be thorough with your sales strategy.
In this section, clearly outline the amount of funding you need over the next few years (3 to 5 years) to build your company. Add details on how you are planning to spend the funds. This includes information on money spent on equipment, salaries, or advance payments. Also include details like whether you want equity or debt, the terms and conditions, and the timeframe for you request. Include details of your all present investors and your strategic financial plans such as selling the business or debt repayment.
This section should recapitulate the financials of your company which includes the Balance Sheet, Income Statement, and the Cash Flow Statement. Incorporate important parameters like gross profit, EBIDTA, equity, net income, cost of margin, etc.
The business plan for your venture should be a compelling document for an investor to invest money in your business. Many a times, your business plan will determine whether or not you will get a chance to present your case in front of potential investors. Remember that a business plan is a dynamic document. It must be updated as when your external environment and your internal factors change and must be kept up to date to reflect the current scenario and the thought process.
Got an Idea?
Do you think you can germinate your idea in to a successful business if you have mentorship and support? Then here is an opportunity for you. INNOLABZ is conducting a business plan competition for budding entrepreneurs to showcase their idea. The first round of the B Plan Competition is happening on 28th April, 2018 at Let’s Connect – D-41, Sector-59, Noida, UP. If selected, you stand a chance to present your business idea in Techniche, IIT Guwahati and Win Rs 1,00,000 with Incubation & Mentorship. To know more and register for the competition, visit their Facebook page (event over).