What is a business plan and how to make it?

What is a business plan and how to make it?

What is a business plan

A Business Plan is a document that answers questions like "what", "why", and "how" related to a new business. For ex: What is our business? , Why are we doing this business ?, how will we do it? etc.

What is a business plan

A business plan tells a business, its objectives, its strategies, in which market it is working and what are its financial forecasts. The Business Plan describes what is the goal of the new business and how it will be achieved. A business plan is like a guide or roadmap to a business, which helps keep things on track.

What is a business plan


Normally a pay business plan is made for a new venture, but if an exit business is doing something new, then that too goes ahead by making a business plan.

What is a business plan

Friends, whenever someone starts a new business, he definitely does some planning about it. What does he think my business will be? Where do I do this business? Who will be my customer? How much investment will it take? How do we market our business? What will be our goal?, Etc. But many people do not document these things properly. Business plan is to document these things formally.

What is a business plan


It is also important to clear here that business plans do not just make startups, but also established businesses can make a business plan at any stage, especially when they need funding to expand their business.

What is a business plan


Also keep in mind that the things written in the business plan are not stones, the business plan can be changed from time to time according to the circumstances.

What is a business plan


Some people may wonder what is the need? So they should know that it has been found in studies that the chances of success of businesses which start with a good business plan increase by 30%.

What is a business plan



Let us know that:

What is the need for a business plan? Why do I need a business plan in Hindi
Business plan helps you stay focused on your goals.

A good business plan states that:


What will be your key objectives in the next two-three years?
What would be your strategy to achieve those objectives and
What will be your priorities
According to these things, you can evaluate at any time whether the direction you are heading is right or you need to change your course.Many people think that the role of a business plan is simply to take external funding. Of course potential investors, banks, venture capitalists ask for a business plan before putting money in your idea, but even if you are self-funded, you must make a business plan. The biggest advantage of doing this is that clarity comes into your own mind as to what and how you want to do it.

The following institutions or people can ask you for a business plan:

  • Banks
  • External investors - venture capitalist firm or a business angel or individual investor
  • Some kind of grantee
  • People interested in buying your business
  • The person or people who want to be your business partner
  • Government agencies or officers
Business Plan is a great tool to give an overview of the business and demonstrate how you are performing.

What is a business plan

1. Executive Summary (Executive Summary) / Executive Summary :-The Executive Summary is a summary of the main points of its entire plan. It includes the main thing of the remaining sections of the business plan. In this, the key features of business opportunity to financial forecasts are told.

Its purpose is to tell the basic things of the business well. If after studying Executive Summary, someone understands what the business is about and wants to know more about it, then understand that Executive Summary has done its job.

Executive Summary should not be too long - 2 pages are enough, as well as try to make it interesting so that potential investors want to know more by reading it.

What is a business plan


Since this section summarizes the rest of the business plan, it is better to write it at the end.

2. Introduction and Company Overview / Introduction and Company Overview

Small description of business opportunity - who you are, what you are planning to sell or offer, why, and whom.
Start with an overview of the business:

When did you start business or when are you planning to start
How much has been invested so far
How much progress
What type of business is your business and sector
Any history - eg, if you bought this business from someone, then who was the owner and what did they get from it?
Legal Structure of the Time
Your future vision
After this, describe your products and services in simple words and understand that:

What is a business plan


What makes it different
What does it give
Why customers will buy it from you instead of other competitors
How do you plan to develop your products or services?
Do you have any patents, trade marks or design registrations
What are the key features and success factors of your industry
Do not use business jargons to explain your business, put your words in simple words so that even a common person can understand things well.

What is a business plan

3. Market and Competition / Market and Competitors:-

In this section you should define your market, your position in it and your competitors. To do this, you can give a reference to any market research you have done. In this you have to show that you have a good understanding of the market you want to work in and you understand the important trends and market conditions.

In this, you have to try to tell that despite the competition you will be able to attract customers and run your business.

These things can be kept in this section:

Your market - its size, history of its development, and key current issues
Your target customer base - who are they and how can you tell that they will be interested in your products and services
Your competitors- who they are, how they work and their market share
Future- what changes can come in this business and how will you react to it
It is important to know the strength and weakness of your competitor in comparison - and it would be better to do a competitor analysis of your main competitors.

Remember, the market always changes - your customers' needs may change and your competitor may also change. So you have to keep these things in mind and move forward.

What is a business plan

4. Sales and Marketing Strategy / Sales and Marketing Strategy

Why do you think that people will take what you want to sell or the service you want to give and how do you want to reach the customer.

Describe what activities you will do to promote and sell your products and services. Often, this is a weak link in a business plan, so one should spend time on it and adopt a realistic and achievable approach.

Your plan should answer these questions:

In some way, you are planning to position your product or service in the market.
Who are your customers? Give details of the customers who have shown interest in your product or service. And tell us how you are planning to attract new customers.
What is your pricing policy? How will you charge customers of different segments?
How will you promote your product or service? Identify your sales process method, for example: direct marketing, advertising, social media, etc.
How will you reach your customers? Which channels will you use? Qin in your distribution channel Will partners be needed?
How will you do your selling? Do you have a sales plan? Have you thought about which sales method would be best for you, by phone, via internet, by opening shop or door to door marketing? And does your proposed sales method match your marketing plan? And do you and your team have enough skills for this method?

What is a business plan

5. Operations / Operations

Your business plan should contain information about your premises, production facilities, management information system and information technology.

You should focus on these things:

Location

Do you have a business property?
Do you own this property or is it rented?
What are the advantages and disadvantages of your current location?
Production of products and services

Do you need your production facilities or would it be cheaper to outsource?
If you have your own production facility, how modern are they?
What is the capacity of your facility as compared to expected demand?
Will any investment be required?
Who will be your suppliers?
Management Information Systems (Management Information System)

Do you have robust procedures for stock control, management accounts, and quality control?
Can these systems be upgraded if they expand in future?
Information Technology Information Technology

Now the role of IT has become important in almost every business, so include your strengths and weaknesses in this area. Outline the reliability and planned development of your system.

What is a business plan

6. Financial Information / Financial Information

Everything you have said so far in the earlier sections has to be presented in numbers.

You have to watch these things carefully:

If you are thinking of external funding, how much capital do you need?
What can you give as a security to debtors
How are you planning to repay your loan
What are or will be the sources of your revenue and income
Financial Planning (Financial Planning)

Your forecast should be for the next 3 or 5 years. The first 12 months forecast should be in full detail. Make sure you explain the aspirations behind your projections so that the business plan reader can understand how to reach these numbers.

What should be in your forecast?

Cash flow statements - Your cash balance and the cash flow pattern for the next 12 to 18 months should be mentioned. Its goal is to ensure that you will have enough working capital to continue your business. For this, you have to keep in mind the salary of your sales and employees, and other expenses.

Profit and Loss Forecast - Considering your projected sales, expenses and how much profit / loss you are paying. Often new businesses are initially in loss and later come in profit.

Many times people become over-optimistic in their forecasts and give big numbers. It would be better to do less sales shows than you are expecting.

Risk Analysis

Along with financial forecasts, it is a good practice to show that you have also analyzed the potential risks in your business. And at the same time you are considering insurance or other ways to deal with them.

In Risk Analysis, these factors need to be kept in mind:

An action by a competitor
Commercial Issues - Sales, prices, deliveries
Operations - IT, technology and production failure
Staff- strike, poaching *, high salary demand
Natural disasters / Act of God- flood, earthquake, fire

7. Appendix

Although this is not necessary, if you want, you can also add an appendix at the end of the business plan. Supporting documents of the entire plan can be added to it.

For example:

  • Charts, graphs, or tables
  • Your contract papers with vendors
  • Your license, patents, trademarks, etc.
  • CVs of Major Employees
  • Rent Agreement, Lease Agreement, etc.
  • Key contacts details
  • Etc 

Some tips for making a business plan / tips for making a business plan in Hindi
Keep the plan small - If the plan is very long, then the chances of reading it will be reduced.
Be sure to include a content page with numbering in the plan
Write the executive summary at the end
Do not keep the font size too small
Even if the plan is being made for in-house use, you can make it thinking that any outside party can also read it.
Edit the plan carefully - in this you can take help of experienced people or experts
Share the plan with a common man and try to know whether he is able to understand things easily. Where there are problems, try to tell things in a more simple way.

Avoid Jargons

Where more detail has to be given, put things in the appendix and keep the remaining sections lighter.
Do not accidentally include any confidential details in the plan
Do not include some things like, staff training plan and detailed sales plan in the business plan, even if you mention that you have them

Plan yourself or get your team built under your guidance
Understand each and every thing of the plan closely so that you can give satisfactory answers to any kind of questions.
Also ensure that your plan is realistic
Update the plan over time
Friends, through this post I aim to understand the basics of a business plan. You may not have understood many of the things mentioned here, but worrying, I will soon share an example of the business plan and things will become clearer.

After getting the idea of ​​the business plan, I hope that if you are starting a new business or expanding the existing business, then you will definitely make this document. I know, it will take some time to make it and it can also be a boring task, but know that if you work on it seriously, then you will get a lot of clarity about your business and in this case your venture will be successful. The chances of this will increase significantly.

Another thing is that the business plan is not just for big million dollar business, it is equally important for medium size or small businesses. Yes, it is sure that the small business business plan will be a little brief and it may be that you do not include some sections in it, but it makes sense to make a business plan regardless of the size of the business plan. .

What is a business plan


What is a business plan


What is a business plan


What is a business plan


What is a business plan and how to make it? What is a business plan and how to make it? Reviewed by Shubham Jadhav on January 05, 2020 Rating: 5

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