A business plan decides the future of a business. It's working, profit, features everything is a layout in a business plan. But there is no universally accepted template of a business plan- it tends to differ from company to company, owner to owner, product to product, service to service.
No matter what the format of the document is, certain sections and components just can’t be missed out. This write-up is going to present the important points of a business plan in two parts: Essential sections and general tips. Let us see the complete insights in the topic- 10 Steps To Ultimate Guide Of Writing Business Plan.
Essential Sections Of A Business Plan
Sales And Marketing Figure
Operating Strategy
Executive Summary
Target Market Analysis
Product Or Service In Question
Management And Advisory Committee
Financial Summary
Future Requirements
Competitive Analysis
Some tips and suggestions
Avoid These Mistakes While Drafting a Business Plan
Essential Sections Of A Business Plan
Motto and Vision. Quite catchy slides or print ups with interesting quotes and catchy vocabulary doesn't make it an excellent business plan. A simple one-liner that exudes the vision of one’s venture creates a formidable impression on potential investors instead of long descriptive write-ups with no mention of the vision and the motto of business. Remember, the motto vision and mission are two important factors of an excellent business plan sections.
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Sales And Marketing Figure
As the sharks on "Shark Tanks" say let's talk about numbers because business is all about numbers, isn't it? So this section is an insight into the true potential of the business. It highlights the existing funds raised, predicted sales over the financial year, marketing costs and ROI, etc. The key point is not to exaggerate or bluff data in any way. Show the real sales of the business and give a Pictorial representation such as charts and graphs elucidate the intended message better than simply creating a large table spanning over several slides or pages. Also, give an estimate of the turnover that the business is planning to make in the upcoming year. This will eventually make the investor ponder about the investment portfolio.
Operating Strategy
The major purpose and hassle of creating a business plan is to decide the operating strategy of how the entire business will operate. So, describing the process flow in terms of how the entire business endeavor would operate is imperative. After all, any execution method is best understood when one is aware of its algorithm, in other words how the execution process takes place because that is what is the bottom line of all the hard work.
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Executive Summary
Usually confined to a page or two, the executive summary ought to paint the entire picture without going into further details. The value proposition is an essential component of this summary and shouldn’t be skipped. It’s advised to write the executive summary after drafting the entire business plan because by picking important ideas from other sections of the document, a concise crux can be formulated.
Target Market Analysis
A no brainer would be aiming to sell the product or service to everyone out there without any research and analysis. A niche item would attract only a particular segment of the customers. So it’s necessary to let whoever is reviewing the business plan to figure out the audience that the venture is targeting.
Product Or Service In Question
Imagine you are on a flight and don't know the destination of it, will it make any sense? No of course, right? Likewise without specifying the product and its specifications that the business intends to disseminate, it makes the entire document is meaningless. Are you going to explain a chemistry experiment without specifying the substances and compounds involved? List out the product’s dimensions, working, identified flaws and workarounds, usage, demand in the market, etc. The description should be mentally stimulating so that the customer can envision the entire thing before owning it.
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Management And Advisory Committee
The business plan must include a section that consists of a short profile of each member involved in the startup/company. It provides a parameter to evaluate the credibility of the business from the eyes of a VC or angel investor. The reasoning is clear—the ethics, personality, and various other attributes of the founder and his team are reflected in the final product. This may seem absurd to some but pondering over it does ring a bell.
Also, if the business is being mentored by some kind of advisory committee, it is a testament to the fact that the business can turn profitable otherwise experienced individuals would have stayed away from guiding such venture.
Financial Summary
Not to be confused with the sales figure section, the financial summary resembles a probable balance sheet; revenue projections give an idea of the rewards you expect for the efforts you put in running the business because the numbers on the plan will surely speak your company's story to the presenters because as mentioned earlier numbers plays all the game in business.
Future Requirements
One reason which makes a businessman work hard is the growth of its business in the future. So, the future needs are going to vary when compared to the current ones. For example, if the investment required at present is a six-digit figure, it may become an eight-digit one to sustain the business as time progresses. However, justification of the predicted requirements ought to be mentioned to make sense.
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Competitive Analysis
You don’t want to create a rip-off. The idea is to be unique with one or more unique selling points to stand out from rivals in the same segment. An analysis with existing products with nearly the same functionality helps to bring out the USP and also gives you the scale to make your product better the competitors.
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Some tips and suggestions
- Don’t make the business plan boring by leaving out graphics. Not losing the listener or reader’s attention determines the outcome.
- Include an appendix to make traversing across the document easily.
- Executive summary in the beginning or end won’t make much of a difference as long as the entire plan is cohesive.
- There are various types of business plans. Research about them before choosing a template.
- Don’t read it out like a textbook when presenting the plan somewhere. You should know the key points and themes to sound convincing.
- Detail the strengths and weaknesses of the business, and how you are going to seize the opportunity if provided.
- Use the same indentation and formatting throughout the document. The sudden transition from a times new roman 16 to comic sans 24 can be disturbing and agonizing.
- Make it a story-based interactive session because no one likes to listen to lectures where you are not allowed to interact. The more people are going to interact, the more they will indulge in your business plan.
- The most important tip, be the master of the plan that you have created to motor your business. Go through each point thoroughly, make sure you are aware of all the numbers, all the future expectations, and anticipations, growth, etc. Make sure you are satisfied with the plan you have created.
Avoid These Mistakes While Drafting a Business Plan
Drafting a business plan requires intense focus and integrity as it forms the backbone of the entire business. The document outlines both the present and future strategy of the business, elucidates necessary points, facts and stats around which it revolves. Simply put, it can or break everything at stake.
Here is a list of don’ts which should be kept in mind while creating your business plan:-
1) Worn Out Phrases
Phrases like 'disruptive ' and game-changing are over-used and stale; avoid using them in the draft. These words may show what the business is but evade its idea in an actual sense. The plan here is to make the readers/clients/investors resonate with the business plan and convey the right message when propagated to others. Moreover, cliched expressions make you sound over-ambitious and over-confident in nature. It might be the greatest plan on the planet but claims that are beyond your capabilities are a bummer.
2) Don’t Use The Word ‘DONE’ To Describe Your Business
The theory behind the working of a business plan is that it keeps on going forever; business is a cycle of implement-improve-repeat. Using ‘done’ may put an end to your aspirations outlined in the business plan.
The process of PLAN-RUN-REVIEW-REVISE when repeated takes the business to the next level. Hence, using the words finished and done makes the plan one dimensional and less prone to getting success. Always keep it open-ended in nature and sound optimistic throughout the draft.
3) Never Calculate The Sales From A Big Market
At the same time, don’t consider the segment you’re targeting as a small percentage of a large market. Forecast the details like stores, distributors, users, subscribers, click and emails, etc. Keep everything upwards, not downwards.
4) Avoid Extreme And Unsupported Optimism
Not involving the risk factors involved can be a deranged factor for the company's future if the words mentioned in the business plan take twice as long to make half as much as forecast.
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Don't Fill The Business Plan With The Product’s Or Service’s Technical Specification Or Characteristics. Keep it at a minimum. Emphasize more on questions like:
- What problem are you going to solve for the client?
- How are you going to solve the problem?
- What is the product’s value proposition?
Outline the answers to these questions in your business plan. Be careful about what you put in the business plan because it’s your business canvas. Deliberate thoroughly, ponder all possibilities and points, don’t make wild claims, stick to the facts, and finally avoid the mistakes explained above!
Link : https://startuptalky.com/business-plan-guide/
Author :- Yash Gupta
June 12, 2020 at 03:43PM
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