Business Plan

What You Always Wanted To Know About Creating A Business Plan

A business plan is vital if you want to procure finance for your venture or intend to implement a specific strategy. The document is supposed to clearly outline the path that the organization will take to meet its objectives in the next three to five years. Because a business plan can serve several purposes; it is essential to make it succinct and pertinent. Au contraire to what people believe even small home based companies need a business plan so that the business owner can ensure that the company’s goals are being met. If you find the prospect of creating a business plan harrowing; here is a look at some vital points that will help you to create impressive business plans for your company.

What is a business plan?

If you are wondering about what is a business plan; it is simply a document that tells investors about the viability of your company and the gains that they can expect by investing in it; when created for outsiders. On the other hand, a business plan created for employees and management will contain in depth information about the objectives and goals of the company and the steps that will be taken to meet them. It will also contain detailed information about the resources of the company, the expenditure vis à vis the profits that can be expected after the implementation of the strategy and much more.

Why should you create a business plan?

A business plan is a simple yet efficacious management tools that minimizes the scope for errors and consequently the risks. The document is primarily drafted for two purposes

• To create a framework for the employees and the management as they try to achieve the goals of the organization
• To convince a financial institution of an investor that ma\king an investment in the company will be a sound decision.

How should you go about creating a business plan?

The easy way is to use a template for creating a business plan, but if you want to get down and dirty; here is a look at the information that you will need to create business plan in 13 simple steps

• Start by drafting the mission statement of your company; even if you are the only employer and owner of the organization; its still advisable to have a mission statement so that you do not lose focus. So, Bill Gates decided that his company would make programs that would be used on every computer in the world

• Make a note of your business idea; here Bill boy decided that he wants to make a program/ OS that would simplify things for computer users. Similarly, you can decide on your business idea; this should generally i9nvolce taking a look at the problems or what is lacking in a particular niche and devising a solution for it.

• Write down the solution that you propose; that is, make a note of what your product or service will do.

• Define the marketing strategy that you intend to use to sell your product services; also think about where you want to operate, offline or online and the customer strata that you intend to target.

• Think about what makes your product/ service unique; basically, jot down the USPs of your product and why the consumers should consider it over the competition.

• The next step is to conduct some market analysis; for this, you will need to surf through several websites and may even need to pay a visit to the local library. It is imperative to understand the size of your market; their expectations and requirements before you market to them.

• Define your job in the company; will you be the marketing guy or the accountant; even if you cannot afford to hire full time employees you can certainly enlist the help of freelancers for a small fee to take care of some of your tasks.

• If you are hiring external help, write down about the job each person will perform in the company.

• Next put some research into the pricing of the type of product that you intend to sell and how your customers will pay you.

• Give a diligent thought to the amount of money that you will need to get this project up the ground; this should include a clear idea about the capital needed to get the service or products ready for sale.

• Clearly define the start up amount required and from where you intend to procure it.

• You obviously plan on being successful; however, in order to ascertain whether you have reached your success goals, you will need to define them. So, what would make you feel that your company is making a killing? Will selling 500 units of a product be enough or would that simply be considered mediocre?

• Make a note of the different business milestones that you intend to reach; date each accomplishment so that you have a fixed time frame in which to achieve it.

The different types of business plans

Business plans can be segregated into various categories based on the purpose they serve such as:

• Feasibility Plan: As the name suggests; this type of business plan is used to determine the feasibility of a business and whether it is worth the time and money to actually start the company
• Start-up plan: By creating a business plan of this type, the entrepreneur is trying to gather all the crucial information needed to start the venture
• Internal Plan: This is for the internal audiences only and lays down the framework for the general operations of the company
• Operations plan: This document provides a detailed description of the operations and tasks to be performed and the goals to be reached in a specified time frame.
• Strategic Plan: This is akin to the operational plan with the only difference that it tackles decisions made at the executive level.
• Expansion plan: Focuses on a particular area of business and its progress.


When should you start working on a business plan?

Depending on the results that you are trying to achieve by creating the business plan, you should either start working on it before you launch the company or before you need major financial assistance which will call for approaching a lending institution. It is best to not draft the document on your own. You can seek the help of professional establishments that excel at creating business plans or you could use the innumerable business plan templates online with proper input from your employees and partners.

Do you need a business plan for yourself and your employees or for outsiders?

The answer to this question once again depends on why you are creating the business plan to begin with. If the document is going to serve as a framework of the policies and strategies of your company; then it will only need to be accessed by the employees of the organization.

On the other hand if you want to procure finding, you will need to hand the document over to external audiences including the loan granting committee of a lending establishment.

Advantages of business plans

The advantages of using a business plan include:

• Helps you to recognize and deal with competition
• Is vital for understanding the business issues that will come into play and how they can be tackled
• Understand the amount of money and other resources that will be needed to start a business
• Explains the viability of a venture to investors
• Will be able to show the business owner’s vision to the world


Things that can go wrong if you do not create a business plan

Proceeding with your business venture without a business plan in hand will be akin to shooting in the dark; you will have no idea about the direction in which your target lies and if you have actually managed to hit it. Given the cut throat competition in almost every industry today, you simply cannot afford to conduct your business so haphazardly. If you have a business plan in hand; regardless of the situation, you will always be able to go back to the document and ensure that everything is being done as per the original plan. So, a business plans can prove to be an invaluable tool that helps you to stick to your business goals steadfastly and not lose sights of what is important.

Word Count: 1416