“A goal without a plan is just a wish.” – Antoine de Saint-Exupéry.
A business plan can be described as the roadmap, a blueprint of your business journey.
Assume, you are planning to drive from New Delhi to Chandigarh, which is a distance of 260 km. How will you start?
The first word which comes to mind is a map. Either a physical, on-paper map or Google Maps/Apple Maps on your car’s navigation system or mobile. What if you don’t have a map to reach Chandigarh from New Delhi? Either you will never reach your destination, or take double, triple time thereby wasting your most precious resource: Time. And here comes the importance and relevance of your business plan.
So, What is B Plan? What is a business plan in entrepreneurship?
What is Business Planning?
A business plan can be described as the roadmap, a blueprint of your business journey. Be it a startup or an already running business, everyone needs this roadmap to reach the goal. It acts as a guide, a map which shows you the direction: Where you are currently, what you wish to achieve, how you will achieve it, and when.
And most importantly, a clearly defined business plan will showcase why you are embarking on this exciting journey?
A business plan is a strategic guide for the entrepreneur, which helps to provide all these answers.
What is Business Level Strategy?
A clearly drafted business plan provides a business-level strategy to any entrepreneur and helps all key stakeholders to be on the same page. Whether you are a one-person company or a hundred people team, everyone needs this clarity.
List of reasons why a business plan is required:
1. 360-Degree View of the Business
Not only the founder and co-founders, but all employees and investors can get a clear picture of the business goals, and the means to achieve them.
2. Priorities are Set
The business plan should clearly show what the priorities of the business are, and what is the order of priority of tasks. This brings more clarity.
3. Manage Profitability
What is a corporate-level strategy? It’s a refined blueprint, an advanced business plan which suggests ways and means, to manage profitability which is the sole purpose of any business.
An important read about – Decoding Profits: How To Find High-Profit Margin Business?
4. Measuring Growth
With the business plan in place, and the entrepreneur being aware of the goals, priorities, and means to achieve those goals, measuring growth becomes seamless. Unless you know what you are about to achieve, how can you measure success?
5. Raising Funds
If you want to raise funds from a bank or NBFC or any VC or Private Equity, they will wish to see your business plan first. Anyone before giving their money to you wants to see if you are going to utilize the funds properly with a plan. The business plan gives confidence to investors that as an Entrepreneur you are ready to grow.
Read more about – 9 Elements of a Business Plan to remember if You Are Looking to Raise Funds
How to do Business Planning?
Every business is unique in itself, with unique goals, strengths, weaknesses, and measurement of success. While more units manufactured can be the success metric for a manufacturing company, getting more software clients can be the measure of success for a development company.
But one thing is common for all businesses: Increasing revenues, and boosting profits.
There can be hundreds of templates and blueprints for creating a business plan, depending on the business and its goals.
Read more about – Fast-track your Business Set-Up with Free Business Templates
However, we will share a 6-step procedure to create a business plan, which is easy to do and applicable to all businesses. Use this as a basic template, a foundation for elaborating your business goals and objectives, a stepping stone in your endeavor to understand: What is Business Planning.
So, here we go…
Step 1: What is the Business Opportunity?
In this section, mention the business opportunity which has inspired you to start the business in the first place. Some management gurus describe this step as understanding the pain points of your target audience: What problem are you going to solve with your business? In short, the biggest USP of your business, and its relation vis-a-vis the market demand. Having a clear understanding of your target audience is very crucial for this step.
An important read about – What Is Business Forecasting: Importance Of Business Forecasting
Step 2: How Will You Execute it?
And then comes the ‘How’ part of your business plan. How do you plan to execute your business plan? How will you convert the opportunity into a viable business, and make money out of it? You can describe in detail the business processes, how these processes will be interlinked and solve the problem of your target audience.
Step 3: Summary of Your Management Team
No business in the world can survive and thrive without a team. In this 4th step of creating your business plan, explain everything about your team and the management:
- Who they are
- What expertise they bring in
- How they plan to convert an opportunity into a business
- Which team member will manage which aspects of the business, and more
Step 4: What is the Finance Plan?
Step 5 is about finance, and one of the most important aspects of creating a business plan. In this section, mention your goals to raise funds, or if self-funded, then how and when you will raise money. It can also include forecasting and predictions about sales, revenues, profits, and expenses. In short, your financial plan should have an overview of everything about money and the future.
Step 5: How Will You Measure Success?
And lastly, the metrics you will use to measure success. Every business and every entrepreneur has different yardsticks to measure success. The metrics are created based on your business goals, financial structure, team, target audience, and sale forecasts. For new businesses and startups, creating 4-5 critical metrics are recommended, which are easy to track and monitor on a monthly or weekly basis. Depending on the success metrics, you can alter your business plan, add new elements, and reduce them.
Read more about – 5 Proven Techniques of Performance Management System for Early-stage Companies
Step 6: Write an Executive Summary
And the last step in creating a Business Plan is a Summary. Write down an executive summary of your business, in one or two pages. A toned-down, bare-bones document that clearly and crisply tells the reader what is your business all about, and what you are going to do about it. If your entire business plan is stripped down to the essentials, then this executive summary should suffice on its own.
Still, have doubts related to business planning and wondering where to start? MSMEx business operations experts are here to help you! MSMEx is a leading startup advisory platform, where business veterans and experts provide live mentoring and coaching to new startups, MSMEs, and established businesses.
