Whether it’s a start-up, an expansion to a new geography, acquiring a new company, launching a new product or targeting a new market, a detailed, structured business plan is indispensable to proceed.
Creating a business plan for any of the above initiatives is like starting a sub-business in an already established business (except of course if the b-plan is not for a start-up). It takes into consideration the business objective, the concept/idea, the competition and key success factors.
1. Business Description
State the central concept of your business. The product/services offered. The revenue model, nature and purpose of your business. What problem of the society is it solving? What gaps in the market is it filling? How promising and exciting are your business prospects and why?
A crucial factor to be considered – You should have a neutral and realistic perspective about your business description. The business description should depict your enthusiasm, capability and dedication to make your plan a success.
2. Business Ecosystem Analysis
Your business plan should define and analyze the industry and the market that it will belong to. Industry includes your direct and indirect competitors and suppliers. The market describes your product, opportunity and your customers.
Industry analysis would include the size and shape of the industry, the trends, entry and exit barriers, how the industry has evolved and how the products and services in that industry has evolved. This should also include the detailed competition analysis highlighting key differentiating strategy.
3. Marketing Plan
The purpose of the marketing plan is to outline the key strategies around selling your product/service. It should have detailed plans about spreading awareness about your product/service. How you intend to sell your product/service? What channels would you use to reach your target market? What method would you use to motivate your prospective customer to buy your product/service?
These components of the marketing plan should be in accordance to clearly defined marketing objectives.
4. The Operations Plan
The purpose of the operations plan is to show the audience of your business plan that you have a well-planned strategy around execution. This plan would include all the activities which would ensure that your product/service reaches the end customer. Key areas of focus of the
Operations plan is materials sourcing, labor, location, distribution, pricing etc.
5. The Financial Plan
The purpose of the financial plan is to highlight the strength of financial projections giving the potential financial performance of the company. It should clearly state your capital requirements and your plan to use your capital. How much should the working capital be, how much should be allocated to marketing, operations, product/service etc. It should also depict the important elements of your projected income statement for 1, 3 and 5 years’ timelines.
Business plan creation is a highly focused and time consuming activity. If the plan is exhaustive and promising, it raises the confidence of the stakeholders while executing and tracking it at each milestone. Here are 5 key essentials for creating a strong business plan.