Let’s say you have this brilliant product/ service idea that you feel fills a gap in the market and you are confident of the technology as well as your plan to launch the offering through an online store. Exciting!
So you have the ideas and the dreams but unfortunately lack the funds to get the project flying.
The logical next step would thus be to get others to see what you have, make them believe in your dream and commit to finance your project. These ‘others’ could be banks, venture capitalists, angel investors or whoever else is able to provide the necessary funding.
Obviously they will first need to agree with your proposition and validate your plans!
That’s when a Business Plan comes handy
It is an important document with many uses
There is the need to be able to put all your ideas and relevant information down on paper to create a Business Plan before approaching any investor. Your overall business strategy and the steps that you plan to take to reach your goals, forecasts backed by proof that they are attainable and everything else to provide assurance to the financiers that it is worth their money and consideration.
Writing the Business Plan also helps you put all ideas in one place and can be a useful document to bounce off people (like your target audience) and seek validation before you actually embark on your project. Every entrepreneur is in love with his own idea (justifiably so!), but do the others also think the same? Every piece of feedback is helpful.
Apart from helping in pitching your project to potential investors, the Business Plan can also be a great guide for the merchant on his entrepreneurship journey. The plan lays down the foundation and also the roadmap that the business aims to follow and is therefore an important document which the merchant could periodically review in future when making important and strategic decisions.
Whether the entrepreneur is seeking funds for a new launch or perhaps looking for an expansion or a new lease of life of an existing project through fresh ideas and investments, having a Business Plan ready is a mandatory requirement.
Read on to understand how to write a good and comprehensive business plan that is absolutely necessary to garner investor attention and interest.
Structure your Business Plan with these parts
There are a few distinct sections that every business plan must include and here we explain the broad areas that a comprehensive business plan must cover. Some of these categories can be divided further to sub-sections depending on the nature and need of the project/ business.
The Executive Summary
This is a sort of an overview of the whole business plan. Typically a one/ two pager, it is supposed to be a clear, concise document detailing the main points of objective and proposal covered in the main document. It must be well written so that it can generate interest among the readers to explore more.
Although it is the first section of the business plan, ideally it should be written last once the rest of the document is in place.
Here we need to discuss in detail about the product/ service that you are proposing to sell. It is important to address questions like- Why is the product exciting? What problem does it solve? How is it different from others in the market? Who is your target market? What is the size of this market? etc
Investors like to see evidence of customer interest. Creating a profile of an ideal customer and discussing the opportunity by exploring their needs, pain points and behaviour will allow you to explore and explain the opportunity better. An analysis of the competition and how your solution is different from the others can provide clarity to the opportunity that your business presents.
Your planned execution of the ideas
This section details the working plan for the business- how you plan to execute the different aspects of the business like sales and marketing or operations and distribution to reach your projected goals. The opportunities that you had defined in the previous section need to be backed by rational operational processes that can enable the business to reach its goals.
Product positioning, pricing and branding, the details of how you would like to undertake the marketing and sales strategies, what marketing channels you plan to use and how, what promotional strategies you are planning and why- every detail needs to be explained in this section.
On the operational side, the choice of technology adoption and the platform that you plan to ride on is very important as it can often provide that competitive advantage in a crowded marketplace. Apart from this, there needs to be well laid plans on how you plan to source your products, your inventory and logistic management plans, how you plan to deliver/ distribute the product, your shipping arrangements etc.
The company’s growth and expansion plans, resource hiring schedule and other such matters also need to be documented in this Execution section.
Your Company and its Management
This section should provide details on the legal structure of the company that you have created and the profile of the main people behind it.
Apart from good ideas, the vision and expertise of the founders and management have an important role to play in the success of any venture. Investors usually look out for good teams in addition to great ideas- so the importance of this section should not be overlooked.
Your Financial Plan
This is a very intrinsic part of the business plan and no investor/ financier would spare a thought on backing the project unless they are satisfied with the financial projections that you are making.
Some of the essential data / projected data that you will need to include are the sales/ revenue forecasts for the next few years (and back it up with data and rationale behind such projection).
The Income Statement, Cash Flow Statement and Balance Sheets of the past year or projections (if you are just starting off) are documents that every investor likes to study and analyze and are hence absolutely necessary.
This is the final section of your plan that contains all the extra documents. These can range from detailed resumes of your founders to explanations of the data analysis that you have undertaken, charts, tables, product images, explanations of concepts used in the body of the plan and whatever else you might think would be relevant and interesting to the investors.
Make use of these tools available to you
Following the above basic framework will allow you to create the Business Plan that can take you a step closer to bringing your entrepreneurship dreams to reality. Apart from this, there is also the option of using one of the many Business Plan software/ templates available in the market for a fee. Some of the more popular software that can be helpful are-
This has a very intuitive and user friendly interface that can help you create your own Business Plan. Their plans are affordable and allow cancellation without a fee. They also have an online learning centre with resources and video tutorials to help you learn relevant business skills.
This offers many more options than just creating a Business Plan and is great for new businesses looking to try out multiple business management tools. It offers industry-specific business plan templates that can be very useful to small/ new entrepreneurs.
However, it is a bit more expensive than others in the market.
This is an easy to use programme with drag and drop tools that guides you with a step-by-step process to build your business plan. A one time subscription to the programme gives you access to a whole suite of tools in the Startups.com network which can be a very helpful resource.
Whether you choose to write it yourself or use one of the templates, the bottomline is that you need to be able to produce a good Business Plan that is clearly defined, realistic and able to achieve its purpose.
Having a good Business Plan in place is an extremely important first step in the journey of entrepreneurship- a sort of a foundation on which the rest of the business can be built.
So start off by putting that brilliant plan together and we wish you an exciting and successful journey ahead!