Whether you are a new startup or have been running your company for quite some time, without a business plan, it’s easy to get lost in the daily activities and make expensive mistakes along the way.
A good business plan takes your ideas and breaks them down into clear containers with actionable steps.
A Business Plan is a formal document that showcases the goals and objectives of the company, from which a general overview of the strategic direction can be drawn.
The business plan basically outlines your plans for development and growth. Thus, it clarifies what the company will do to achieve its goal. The plan presents the vision of the business, giving an outlook into its long-term goals.
This business plan is used to convince investors and summarize the potential future of the company.
A business plan is like having a Google map when you don’t know the right path to your destination. A good business plan tells you where to start from, where to go, the best route to take, and even an alternative route in case you get stuck.
The basic objective of a business plan is to:
Even if you are running a business, a business plan will show how things should be set from how you work as a team to how you plan to grow. It will push you to think through all the important parts required for building a successful business.
If you borrow from banks, or from angel investors or from venture capitalists, you must have a business plan. You will not be taken seriously unless there is a clear picture in your plan for how you intend to achieve success, and then how the investments will grow. A strong plan helps you secure the support you need.
Even if you don’t need external funding, a business plan would keep you on track of specific goals, short- as well as long-term. It will give clarity in the minds of all team members on what the company is about and how everyone’s work is connected to the same vision.
Writing a business plan is more like putting your idea to the reality test. It forces you to inspect whether or not the idea is feasible and viable. It also helps you see the problems ahead of time, close the gaps, and make a stronger plan before really spending a lot of time and effort or actual money.
Business plans vary from business to business. The format and level of details you require depend on the current stage of your business, how complicated it is, and why you are creating the plan in the first place.
I’ll start with the two most common types of business plans used by businesses.
This format is used to create a detailed roadmap that helps to secure funding, set goals, track growth, plan expansion to secure big funding and to develop a detailed operational guide for the business.
If you want to create a quick and simple plan for your business, a Lean Startup Business Plan might be just what you need.
A business plan can be modified to suit the focus and audience you are targeting. Here are a few more types of business plans.
| Parts of a Business Plan | Description |
| Executive Summary | Outlines the business in brief, including identity, products, target market, capital needs, funding needs, and business history. Keep it short and focused (1-2 pages). |
| Company Description | It presents the company’s story, how it was formed, its mission and goals, and its positioning in the market. |
| Market Analysis | Shows detailed research of industry analysis, target market segmentation, and competition analysis. Helps identify opportunities and shape marketing strategies. |
| Organisation and Management | Presents an overview of the business structure, management, leadership team, hiring plan, and capital structure. |
| Products or Services | It explains what you sell, the benefits to potential buyers and how it differs from competitors. |
| Marketing and Sales Strategy | Explains how you will attract customers and sell them, and its marketing, pricing, and selling strategies. |
| Funding Request (If Applicable) | Specifies the amount of funding, what it will be used for, and the terms you are seeking. |
| Appendix | Adding extra docs (licenses, certificates, product photos, testimonials) to build trust. |
A business plan gives your business a clear direction.
Statistically, businesses with formal plans grow 30% faster than those without a business plan. These businesses are most likely to succeed & secure funding.
A business plan helps you understand the existing challenges and future ones.
So that, you can take preventive measures to manage the risks and address the weaknesses before they grow into big problems.
It gives you a clear framework to make decisions. It also helps to evaluate facts, figures, and the needs of the business.
A strong and detailed business plan increases the credibility of your business.
It clearly conveys your vision and strategy to the investors, partners, and stakeholders.
With a business plan, you set concrete, measurable goals. This helps you to stay on track and focused, which helps motivate you and your team to keep going.
A business plan helps you deal with sudden crises. It provides a framework within which you adapt and respond to challenges, thus ensuring the survival of your business.
Knowing the benefits of a business plan is the first step, but turning that knowledge into a plan is where the real challenge begins.
If you’re already in business and questioning, “Do I really need a business plan now?” the answer’s a big “yes!”
An excellent plan will assist you in developing your existing business, keep you focused, and help with fundraising. Here is how to create one without getting too stressed:
Spend time to know your customers, competitors and what’s happening in your industry. Good research directs you in the right direction.
Are you creating this business plan to get some funds? Or for growing your business? Make sure you know your purpose, and also think about who will read your plan ( investors, partners, etc.).
Gather all relatable numbers that influence your business (sales, profit, expenses), market facts, and product details.
Find the suitable business plan type/format for your desired goal. For example, A funding plan might require much more financial information, whereas an internal growth plan would be less detailed.
You do not have to write everything in one go or in order. Keep on adding sections as you go. Save the Executive Summary (the first page) for the last.
Use short and clear sentences. Use simple terms and words, avoid sophisticated words, which may create problems in understanding.
Restaurant Business Plan – What You Should Include:
Describe your restaurant concept well, what foods will comprise your menu, its mode of service (fine dining, casual, takeaway, etc.,), its ambience (look and feel), its capacity, size, and the number of people it can seat.
Tell what food will be offered at a price, giving some examples of dishes. It shows people what exactly you offer and how prices are set.
Analyse your location. Look into who your target customers would be, the traffic the area gets, and possible competition.
How you will operate the food establishment: Number of employees, how payment will be done (like a POS system), payroll system, and vendor ordering and tracking inventory.
You have to mention how to follow all hygiene and safety rules.
Outline clearly all costs: food, drinks, salaries, rent, electricity, licenses, etc., that you expect to incur.
Tech Business Business Plan – What You Should Include:
Describe briefly the problem that most people in the specific area are really facing and how uniquely your technology would offer a smart solution to it.
Focus on both how big the market is and how your idea can improve or complicate things.
Explain what exactly your product does, both in functional terms and technical descriptions.
Discuss how the venture will grow without too much strain on the technology or business model.
State if you have all the rights, patents and proprietary technologies that only you own.
Describe how you will attract customers and what channels you’ll use (online ads, partnerships, etc.) and how you will measure success.
Discuss your team’s skills and experience, especially regarding the technical area.
Describe key stages such as launches, user targets, and funding rounds.
Describe how much you would take to grow and build the business, and what you would provide to the investors later on.
Once you create a business plan, it should be reviewed frequently so you can update it with market and business changes. The frequency with which you review your plan would depend on the needs of your business. If your business is stable, an annual check may be adequate.
However, with fast-moving changes, you may have to review more often.
So, you can find areas in need of improvement and adjust your strategies by comparing your real performance with what you have planned.
A business plan has many moving parts, but the most important question is: which area of your business needs attention first?
None can destroy iron, but its own rust can! Likewise, none can destroy a person, but their own mindset can.
Former chairperson of the Tata Group
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