Why a Business Plan is Considered as the First Step of Business

What is a Business Plan?

A business plan is a written description of your business’s future. That’s all there is to it — a document that describes what you plan to do and how you plan to do it. If you jot down a paragraph on the back of an envelope describing your business strategy, you’ve written a plan or at least the germ of a plan.

The Business plans can help perform a number of tasks for those who write and read them. They’re used by investment-seeking entrepreneurs to convey their vision to potential investors. They may also be used by firms that are trying to attract key employees, the prospect for new business, deal with suppliers or simply to understand how to manage their companies better.

Key Points of a Business Plan

  1. Executive Summary Market Analysis
  2. Company Information
  3. Company Organization
  4. Marketing and Sales
  5. Product Description
  6. Financials

Things to be Considered before Drafting a Business Plan

1. Determine your purpose
Having a plan to make a profit is important, but it’s far from the only thing that matters when you start a business, experts say.

“Business plans … encourage entrepreneurs to focus on what they are going to do,” said Alan Williams, co-author of “The 31 Practices” (LID Publishing Inc., 2014). “This overlooks two more important questions: ‘why’ — why it exists and why employees would want to get out of bed in the morning, and ‘how’ — the values of the business, what it stands for, how people representing the business will behave.”

2. Build your vision
The key to business success is having a clear vision of what you want to accomplish as a company, experts say. But before you write a business plan, you should come up with three to five key strategies that will enable you to achieve that vision, advised Evan Singer, CEO of SmartBiz, a provider of SBA loans.

3. Clarify your business model
Alex Muller, senior vice president and chief product officer of GPShopper at Synchrony Financial said a good financial model should include many of the details you would put in your formal business plan — for example, hiring, pricing, sales, cost of acquisition, expenses and growth. As with a business plan, your model should be revisited and updated as the realities of your business start to unfold.

4. Identify your target market
Identifying a target market can be a tricky obstacle to get through. To help narrow down your market, Grant Leboff, CEO of Sticky Marketing Club, says to answer the question, “Why am I uniquely placed to solve the problem?”

5. Test your business idea
Entrepreneurs should go out and talk to industry experts, potential customers in their target market and other entrepreneurs to determine their business’ viability, said Kara Bubb, a principal consultant at Kara Bubb Product Consulting.

“Talk to some real potential future clients [and experts], and ask for some honest feedback,” Bubb told Business News Daily. “What do they think about your business idea? Who, specifically, are you targeting with your business? How big is the market? Will your market buy what you are selling? Who is your competition?”

Is it important to have a Business Plan?

Here are 4 reasons why you need to get a business plan review

1. To raise money for your business
Potential investors or lenders want a written business plan before they give you money. A mere description of your business concept is not enough. Instead, ensure you have a thorough business and financial plan that demonstrates the likelihood of success and how much you will need for your business to take off.

2. To make sound decisions
As an entrepreneur, having a business plan helps you to define and focus on your business ideas and business strategies. You not only concentrate on financial matters, but also on management issues, human resource planning, technology and creating value for your customer.

3. To help you identify potential weaknesses
Having a business plan helps you to identify potential pitfalls in your idea. You can also share the plan with others who can give you their opinions and advice. Identify experts and professionals who are in a position to give you invaluable advice, and share your plan with them.

4. To communicate your ideas with stakeholders
A business plan is a communication tool that you can use to secure investment capital from financial institutions or lenders. It can also be used to convince people to work for your enterprise, to secure credit from suppliers, and to attract potential customers.

Creating a business plan involves a lot of thought. You need to consider what you want to do, and use that as a starting point. It doesn’t need to be complicated. At its core, your plan should identify where you are now, where you want your business to go, and how you will get there.

Writing a good business plan, the Ernst and Young Business Plan Guide add, can’t guarantee success, but it can go a long way toward reducing the odds of failure. This is also according to multiplestreams.org, even if you aren’t looking for investment, your entrepreneurial plans will fall flat quickly without a plan to guide them.

What is an effective Business Plan?

  1. CHOOSE YOUR AUDIENCE
    Before you even begin writing a business plan, you should decide who it will be targeted at. Business plans can be “externally focused”, which is to say that they target people outside of the company (e.g. investors or lenders), or they can be “internally focused”, which is to say that they target people inside the company (e.g. managers or workers). Knowing the target audience of your business plan will help you keep the information inside both relevant and appropriate to the reader.
  2. BUILD A CLEAR VISION
    If you don’t already have a strong vision for your business, then it’s important that you build one before starting work on a business plan. A vision is an image of where you want your organization to be in the future (a goal, per se), which even determines the actions that you take. Naturally then, having a strong, clear vision is very important in creating a well-guided business plan.
  3. USE BUSINESS ANALYSIS
    Using various different business analyses allows you to discover a number of different internal and external factors that you might have otherwise not considered. SWOT, PEST, and STEEPLE analyses, for example, can help you find gaps in the market, foresee various different threats, and leverage strengths and opportunities which you already have or face..
  4. SET REALISTIC GOALS
    While it’s good to be optimistic, make sure that the goals you set are realistic and attainable. Not only will achieving more goals (even if they are a bit easier) improve the morale of those immediately inside the business, but it will also ensure that potential investors can see the consistent progress which you are making.
  5. CONSIDER DIFFERENT TIME FRAMES
    Business plans are normally set over a certain time period. They explain what the organization wants to achieve, and how it will do it, over a predetermined time frame. When creating your own business plan, it can be valuable to take into account various different time frames to see which business plan would be of most value to external and internal audiences.
  6. BE LOGICAL, RATIONAL, AND CONSERVATIVE
    Similarly to point number four, your business plan should be logical, rational, and conservative. Aside from setting realistic goals, this can mean:

-Properly supporting any claims or assumptions
-Fully fleshing out the means of achieving goals
-Considering the possibility of worst-case scenarios
-Minimizing the amount of ‘fluff’ or ‘empty words’ included in the plan

7. PERIODICALLY REVIEW YOUR PLAN

Finally, you should periodically review your plan to make sure that your business is going in the right direction. Sometimes, your business plan might even need to be reworked if you see new opportunities or threats in the market. Either way, it is good to make sure that what your organization is doing is consistent with your plan, which should be both well thought out and up-to-date.

Enterslice has a team of amazing professionals, who use the latest technologies and trends available in the market. If your company is looking for a business consultant anywhere in India, then do give us a chance wherever you require a business consultant in Delhi, Mumbai, Chennai, Bangalore etc.