Business plan is nothing but a summary of one’s idea on how he or she is going to organise the entrepreneurial activity. It is a written explanation of the idea of an entrepreneur who wishes to venture into a business. Business plans make one to focus on the objectives clearly. With business plan one can make the workers responsible if the desired results have not been achieved. The plan helps the entrepreneur to keep track of the objectives even if anything goes wrong. It is the one which gives everyone a concrete strategy to proceed with.
But many a time, it is also considered as outdated because only during the implementation process the entrepreneur will be able to realise the pros and cons and will have greater understanding. He will come to know about the various options available which could lead him to make strategic alterations in the plan. But, still, planning is the first step; without that one cannot even initiate the business activity. It should be based on cause and effect.
The business plan should address the outcome of the business, challenges and opportunities and adaptation of modern technology. Business beginners will take into account all these basic parameters while drafting a business plan. The first feature in a business plan is it should have a concise executive summary which illustrates the key points explained in each section of the whole plan. If the plan exceeds more than six pages a concise executive plan should be inserted at the beginning of the document.
The type of business, location and the means of doing business should be mentioned compulsorily. A detailed description of the products which they are going to manufacture or sell and the services which they are going to offer should be stated. An overview of the market with the support of data and graphs should be provided and the target market of the proprietor and his plans to cater to the specific customers should be highlighted.
Analysing the strengths and weaknesses of the business’s competitors, the plan should explain how the entrepreneur will fill the gap and gain a competitive edge. How he or she will reach the customers and the mode of advertisement, marketing strategies and the prices should be outlined.
A clear background of all the key persons who are going to get involved in the business should be provided. And, above all, a thorough estimate of the vital input that serves as the backbone of any business, i.e. finance should be detailed by providing the capital amount required, the amount required for the next two, three and five years, plans to utilise the funds and also the regular revenue costs such as salaries, insurance costs, advertising expenses and the other unavoidable expenses and, more particularly, the profit margins.
A business plan should have utmost clarity and it should conform to the aims and objectives of the business. The terms mentioned in the plan should not be confused. Clear descriptions must be given. Everything should be neatly and professionally presented without any grammar or spelling mistakes.
A business plan should contain a mission statement. ‘Mission Statement’ is a must for any kind of business which could provide a service charter relevant to the nature of the industry. The administrator can involve the staff to garner ideas on mission statement so as to generate a sense of ownership and participation among the workers. Many entrepreneurs will announce the mission statement in a grand gala just to attract the attention of the people. It is an excellent process through which one can prioritise the activities. If they have reference materials, charts, examples and evidences, it should not be included in between the document rather it should be put in the section called Appendices at the back of the document. In main body of the text, it should be numbered and referenced.
Above all, the ultimate factor in a business plan should be it must ensure that the business will generate sufficient revenue to cover all the expenses and will have adequate returns to pay back the bankers and investors on time. A business plan should show the proprietor’s level of confidence and his/ her passion for the business. It should be related to the entrepreneur’s natural strengths and unique qualities.
