The article concerns the following question – What Is A Business Plan? A business plan is considered to be the most important aspect of resuming your business. However, very often this practice is ignored by many businessmen. Wikipedia defines a business plan as ‘a document containing a set of business goals that is supposed to be attainable for the success of the business within a given time period.’
Before starting any business, it is important to have a well-structured business plan in place. Many people have the notion that business plans are required only to apply for loans or to attract business investors. But it reality, they have a much wider implication for anyone starting a business.
Why need a business plan
A business plan on the whole, helps the proprietor/s to allocate resources, prioritize on the key assets, prepare for the potential hazards and seek opportunities. At the same time, it helps in attracting investors and in getting loans. In other words, the plan is essential in running a business successfully. Often the success or the failure of a business is determined by the business plan.
Essentials of a business plan
A typical business plan has a standard set of elements. This may include an executive summary, an overview of the company including its products and services, the mission statement, go-to-market strategy, market analysis, management team as well as its financial plans. There may be slight variation based on the company’s specific missions and services.
Generally, a business plan is prepared by the entrepreneur in consultation with senior board members, or business experts. The plan may vary slightly based on specific situations. For example, it can be slightly customized when it is viewed by an investor, who would be more interested in the management team, board of directors and so on. A bank or a funding agency would be more interested in the financial history. The main business plan, which is used mainly for internal purpose should have all the essential elements required to run a business.
The most important part of a business plan
Every part of the business plan should be treated as important. However, the two most important parts are financial analysis and strategies. Financial analysis, especially cash flow and budgeting are key areas where companies falter and therefore, it has to be devised in a practical manner. Implementation of strategies is also equally important, or else the plan will remain just in theory. Implementation may include its go-to-market, budget allocation, marketing and promotion and project evaluation, among others.
What to Avoid in Your Business Plan
– Do not highlight very long-term plans as it often becomes meaningless in the changing business scenario
– Do not use highly optimistic sales and profit figures, return on investment etc
– Do not forget to outline your strategies in the wake of business adversities.
– Avoid using jargons and make the plan simple to read and understand.