Running a business is not a hobby or part time work. Whether you’ve just started out or been running your company for years, planning is a key to success. The importance of planning should never be overlooked. For a business to be successful and profitable, the owners and the managing directors must have a clear understanding of the firm’s customers, strengths and competition. They must also have the foresight to plan for future expansion. Writing an extensive business plan can be overwhelming and time-consuming, but many successful businesses look at it as an opportunity. It provides you with insight into your business. This article will guide you through the step-by-step process of developing an extensive business plan. A business plan is very specific to each particular business. However, while each business needs a unique plan, the basic elements are the same in all business plans.
First of all, we will know What is a business plan?
A business plan or B-plan is the formal written expression of the entrepreneurial vision, describing the strategy and operations of the proposed venture. The business plan also goes by other names, depending on its intended audience. Presented to a banker, it may be called a “loan proposal.” A venture capital group might call it the “venture plan” or “investment prospectus. It’s a tool for understanding how your business is put together. You can use it to monitor progress, hold yourself accountable and control the business’s fate. And of course, it’s a sales and recruiting tool for courting key employees or future investors.
How B plan is different from a Pitch deck?
In one line Pitch is when you explain what your product/service is and Business plan is how you plan to growth your business. A pitch typically is a 11 to 20 slide presentation with less text and more info graphic type visuals. It is more about selling the vision of your company to the investor in a face to face meeting, broadly explaining how you are going to make it.The business plan is an extensive document typically (25-40 pages) where you have together market research strategy and tactics, lists of assumptions, milestones, metrics, tasks; and projected sales, spending, cash flow, financial forecast, logistics etc.
Business Plan is typically required (if at all) at later stage of funding process but it is good to have it early on. If you have a business plan, preparing pitch deck is relatively easy because it is essentially a summary of the business plan – although structured in a more persuasive manner. A simple way to understand is that you can use a business plan to support your pitch, but it´s not strictly necessary.
What does a B-plan do?
A clear and compelling business plan provides you the roadmap to achieve your entrepreneurial goals on time and tells what you need to accomplish to make your startup a success. It also provides direction, keeps you on track and is usually a requirement when you seek finance. A B-plan basically answers all the comprehensive list of questions that may arise while you are executing your business strategies. One of the most important question is where do want to see your startup in 3 months to up to 5 years down the line. What level of revenues and profits do you have at that time? How many employees? How many locations? And so on.
Writing and researching for your business plan also gives you the chance to:
- Learn about your industry, market and competitors.
- Write down exactly where you are in the market and where you’re headed.
- Identify challenges you may come across and work out strategies to avoid or overcome them.
- Understand your business finances, including managing cash-flow and determining your break-even point
- Set specific goals, timeframes for achieving them and how you’ll measure performance
- Make sound business decisions that focus your activities, maximise your resources and give you a competitive edge.
- Learn about the different forces and factors that may affect your success.
Why do you need a business plan?
For a new business, a business plan helps improve your chance of securing financing and investment. Established businesses should review their business plan and update it regularly in order to provide direction for growth. It also enable the top executives of the firm to think about their business in a comprehensive way, to communicate their objectives to individuals who may have a stake in the firm’s future, to have a basis for making decisions, and to facilitate the planning process.
A business plan is vital to obtain financing. If you’re looking for funding for your startup, you’ll need to show banks and investors why they should invest in your startup. They will only risk their time and money if they’re sure that your business will be successful and profitable.
A thorough and well-researched business plan:
- Shows that you’re serious about your business
- Helps lenders and investors to understand your business idea
- Shows your predicted profits and income streams.
An October 2007 study by Babson College found that start-ups with a business plan raised twice as much capital as those without a business plan within the first 12 months. Along with the B-Plan your marketing plan and financial projections are also important to get you funds.
To clarify your business operation and focus on core business objective goal
At a start-up, execution is everything. That means you have to set priorities, establish goals, and measure performance. It gives your business direction, defines your objectives, maps out strategies to achieve your goals and helps you to manage possible bumps in the road. This means you can focus your resources and energy on what you need to do, rather than spreading yourself too thin.
To create a guide for managing your business, Developing your business plan helps you to step back and look at what’s working in your business and what you can improve on. If you have employees, the planning process can be a good opportunity to seek their feedback on possible ideas and improvements. Taking the time out of your business to plan will give you a sense of control about the future of your business and pay off in the long run! If you’re already in business, it helps you to step back and look at what’s working and what you can improve on. Instead of worrying about the future, a business plan helps to give you a sense of control over your business and your livelihood.
Communicating vision with your team
The last thing you want to do is work on your start-up for a year, and shut down at a later stage. Many founders learn the hard way that they kept much capital to reach their goals, took on partners with the wrong skills and resources, or don’t have a viable way to make money. The perfect business plan for a startup is the one that will assist you in successfully communicating with financiers and other people involved in your startup. A business plan helps get everyone involved in your start-up heading in the sprinting down the right ad same path.
To counterbalance your emotions
At times during your start-up experience, you’ll be manic—so passionate about your ideas you lose sight of reality. At other times, you’ll be overwhelmed by doubt, fear, or exhaustion. When your emotions get the best of you, having a business plan lets you step back, and take an objective look at what you are doing and why, what you know for a fact and what you are trying to figure out.
To get new customers
B- Plan can also help you to generate more leads. The key is to take a step back from your daily routine and re consider your strategy. Because while you were building your business, you found that the market has changed. So the next thing you do is to configure Your B plan as per the new projections.