Business Plan
Making a Business Plan
A business plan is the written representation of your vision for your business. It is the story of your venture written by you. Many electives on entrepreneurship taught at B-schools revolve around making a Business Plan.
Business Plans are used be entrepreneurs for various purposes. It can be used to get loan from banks or to get equity funding from angel investors or venture capitalists. It can also be used to attract business partners and key employees, Or to make business alliances. One of the important uses of business plan is to clarify the exact nature of the business to you. Often, many lacunae in our business planning come to fore only when the plan has been put down in paper. So, A business plan also gives an opportunity to think through the plan.
A business plan must describe the company, its product, and its entrepreneurial team. Also, it must state the money needed by the business and how it will be spent as well as objectives of the business and how they will be achieved. A business plan must help the entrepreneur understand the business and make him confident.
A well- written business plan is an asset to the entrepreneur. A good business plan does not necessarily make a bad business idea good , but it certainly helps improve a good business idea. Like any other project, writing a business plan has to be planned and managed properly.
The key sections of a business plan are as follows:
Executive summary-
Bankers and venture capitalists do not usually go through the entire business plan. They go through only the executive summary an if their interest is piqued, they go to the following sections.
An executive summary is not an abstract of the business plan but a complete but concise business plan itself. An executive summary begins with the description of the business. Next, the summary should include key strengths of the business. It may also be wise to state some obvious risks and then outline the steps you are taking to mitigate the risks.
The company-
History- Mention some details of the origin of the business idea. Restricting it to a couple of sentences is a good idea.
Current status- Mention whether the company has been registered, land acquired, product development has begun. It should have a detailed descriptions about its legal identity, place of operation, current size etc.
Future- this, of course, is the most important part. It should give the reader a sense of direction the company is going to take in the coming years.
The management team
This section should present all the strengths of the entrepreneur. It is good to include a short summary bio-data as a paragraph and then include a CV as an exhibit.
The industry and the market
This section begins with a brief description of the industry in which the venture intends to operate. It is relevant to mention the size of the industry, its composition and its structure. It is useful to mention recent significant events that might have impact on the business. There should be an analysis of the future trends in the industry. And their likely impact on the business.
Operations
This section aims to explain the nitty-gritty of the business operations to the reader. It begins with a description of what needs to be done to get the business underway. It can include detailed plans of buying the land, constructing the plant and installing the machinery.
The marketing plan
The marketing plan includes all the start-up proposes to do to promote its product and to sell the product.
Financial plan
A business plan usually seeks to raise money. This section has to outline how much money is neede, why it is needed and how it is proposed to be used.
Risks and contingencies
A financer is really happy to note that the entrepreneur has been able to correctly identify risks and threats and has taken action to protect the business from the likely and the more dangerous of the various threats.
The main steps in writing the business plan:
1) Define purpose
2) Collect information
3) Write down things
4) Prepare a rough draft
5) Do financial analysis
6) Finalize the plan
7) Get the plan reviewed
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