The importance of a business plan needs no explanation. Just like textbooks for the basis for education, a business plan forms the crux of a company or organization.
Here are ten types of business plans that every startup founder should know about:
The standard business plan
This one really follows the textbook approach, starting with a summary and comprising of sections covering topics such as implementation details, mission and vision, financial stats and target audience. This kind of document is usually comprehensible to all kinds of parties—explaining your business to product vendors, VCs and investors, finance firms or even the fellow team members. The plus point of the standard format is that it describes expenditure in detail, along with information about the profit and loss, cash flow and the projected balance sheet.
Growth business plan
A plan that is growth oriented generally has for essential parts: The proposed strategy, execution mechanism, parameters and metrics to aid in assessment, and the necessary statistics and numbers. When it comes to strategy, a good one can exemplify the entire journey and a flawed one can make simple tasks difficult. A well-crafted strategy takes into consideration the proposed solution to the identified problem, the target audience and how to approach them. The execution plan outlines the methodology to implement the strategy, elaborating on each step of the process by covering the what, why and how of that step. The third component i.e. metrics, are imperative to measure the current performance against the ideal benchmarks. Finally, presenting a business plan void of statistics and charts/tables doesn’t do much. Convincing investors of the projected growth requires compelling numbers!
Lean business plan
A streamlined plan that doesn’t delve into in-depth descriptions, the lean business plan is an optimized version of a standard business plan. Sharing a few similarities with growth oriented plan, this kind of setup has the following components—Strategy: What the venture wants to accomplish and how it shall do the same comes under ‘strategy’ phase. Working on the lines of a sound strategy saves the management from unnecessary waste of efforts and time. Tactics: Synonymous with strategies, tactics allow the creation of measures that allow the desired strategy to result in maximum efficiency.Assumptions, metrics and schedule: Assumptions without backing are meaningless. And backing comes through the use of established milestones and metrics. Furthermore, to ensure that things go as planned, it’s imperative to follow the right schedule.Forecast: Financial forecast that is of sales, revenue and expenditures, need not be 100% accurate. But making basic predictions plays a pivotal role in bringing credibility to the business plan.Run, review and revise: In case a pitch deck event is coming up, add a few details like marketing tactics, publicity measures, and summary to the plan formulated and you are good to go. Otherwise, spend time in reviewing the draft, undertaking mock presentations, and eliminating the identified defects. This should be carried out as a cycle, being repeated periodically.
These are similar to a lean plan, taking cues from it. But these are meant for dispatching within the organization itself. Such business plans aren’t prepared for presenting to investors or any other external entity. It’s specific to the employees of the organization.
Operations business plan
Meant for elaborating on the annual operations of a company, this plan mentions the deadlines and requirements that need to be achieved for the financial year. It also highlights KPIs and KPAs for employee evaluation, along with milestones that need to be hit.
As the name suggests, the feasibility plan determines whether the proposed product or service would fly high or tank before launching. This plan also determines the potential investors, intended demographics, and recommendations to actually get the business going.
One page plans
A pitch deck is supposed to be short and concise. And that’s what one page business plans seek to achieve. It delineates the milestones, objectives and important numerical data such that the entire summarized information fits within a page. These can be highly effective, just like pamphlets.
Strategic business plan
Based on an internal plan, the strategic plan overlooks financial description and focuses more on the strategy and tactics that’re going to be employed in order to realize the objectives. Hence, it is elaborate and contains extensive details, something not delved in much depth in case of one page plans or internal plans.
Taking care of what-if situations is essential when dealing with a business setup. The probability of bailing out is high, just like the chance of succeeding with the idea. Contingency plan details the alternate course of action if the primary strategy fails.
Startup business plan
Often seen as a version of lean plan, the startup plan is designed while keeping emerging companies in mind. These are intended to entice VCs and investors, and are the building blocks for the business to flourish.