How To Create A Winning Business Plan?

What is a business plan?

The business plan should always be regarded as a roadmap which defines how to structure, monitor, manage, coordinate and grow the business in future. In other words, a business plan acts as a document that helps in figuring out a route towards success (Abdullah, 2020). By serving as a significant planning tool business plan offers the chance to chalk out and demonstrate what an entrepreneur or an aspiring entrepreneur wants to achieve. A winning plan helps to attract investors, stakeholders, potential business partners and a talented workforce. With the expansion of the business, plans related to business tend to evolve and change.

What are the elements of a business plan?

While writing a business plan, the idea conveyed shall be clear. The business plan shall comprise a detailed description of the business, target market, emerging issues in the market, sales and marketing plan, team structure, organisational structure, financial plans, and an analysis of the competitors. In addition to this, the business plan shall also include deadlines within which the objectives of the business shall be met.
The business plan can be brief. It can be concise and precise to include all that can arouse the reader’s interest. The business idea shall be clearly stated, and how the business plan is going to be executed. In other words, it shall comprise all the essential parts of the plan and should be communicated effectively.
For instance, if it is a start-up business, the plan can be a simple one that can be modified over time (Jukova et al. 2019). However, a long-term business plan can be of use if the entrepreneur is looking for investors to fund the new venture. This comprises detailed documentation, cash flow forecasts, detailed budgeting, and financial projections.

What are the ways to write a successful business plan?

A well-crafted business plan shall include the business’s goals, services and products. In other words, a well-written business plan will act as a roadmap for the next three to five years that will benefit the business (Watson and McGowan, 2019). This can be shared with lenders, stakeholders and investors. Thus for the success of corporate managers and entrepreneurs, a carefully thought and comprehensive business plan is regarded as essential.

1. Start with an executive summary

The first page of the business plan shall comprise the executive summary. This will comprise the vision and mission statement, a brief description of the products and services and an elaborate summary of the financial plans. An executive summary is regarded as an important part as it highlights the necessary information that is being identified.

2. Description of the company

The company description shall comprise necessary information such as the registered name of the business and the address of the business location. In addition to this, it is also important to mention the names of people who show good skills or technical expertise. The company description shall also show the business structure, such as the partnership, corporation or sole proprietorship (Dal Mas et al. 2021). Finally, it shall defray the company’s history and the business’s condition now. This assists the readers in learning the business goals.

3. Mentioning the business goals

This part of the business plan is more of an objective statement as it states what the entrepreneur wants to achieve in the short and long term. Short- and long-term business goals explain the need for having funds and how the financing will help the business grow (Dal Mas et al. 2021). It also entails the methods to achieve the business targets. For instance, if the business wants to establish a second product line, the business goal will explain how the loan will assist the company to launch the new product and the anticipation of sales over the next three to five years.

4. Describing the services and products

Detailing about the services and the product is also regarded to be essential. This comprises an explanation of how the service or the product works, the pricing model of the service or product, the target market, order fulfilment strategy, supply chain, sales strategy and distribution strategy (Jukova et al. 2019). The present and pending patent and trademarks that are related to the product and services can also be discussed.

5. Conducting a market research

Investors and lenders enquire why the product or the services introduced are unique and how it differs from the competitors. In the section on market analysis, the name of the competitors can be explained (Abdullah, 2020). Their activities can be discussed at which they are adept, and the area shall be pointed out where the entrepreneur himself can do better. If the business serves an underserved or a different market, that also gets included in the business plan.

6. Outlining the sales and the marketing plan

To arouse the customers’ interest and persuade them to buy the products and services, it is necessary to outline the sales and the marketing plan. Entrepreneurs shall also think of the company’s growth before getting into profits. As growth emerges from spending, there is often a trade-off between profits and growth. It is essential to focus on how the business will be able to generate growth.

7. Conducting a business financial analysis

If the business is a start-up organisation, the entrepreneurs will need more ideas about the business’s finances. Contrary to it, the entrepreneur includes the profits and loss statements if it’s an existing business. In addition, it also includes a balance sheet that details the cash flow statements and the list of all the assets and debts (Abdullah, 2020). Metrics also comprises the current ratio, net profit margins and accounts that can be received over a turnover ratio. This is a suitable place to include graphs and charts, which help assess the businesses’ financial health.

8. Making financial projections

This is one of the most critical parts of a business plan if the entrepreneur is seeking investors and financers. Here the entrepreneur needs to provide the business’s monthly or quarterly expenses, sales and profit estimates over a few years (Abdullah, 2020). As accuracy is regarded as the key, thus, before giving projections, the entrepreneurs shall review the financial projections.

9. Adding additional information in the appendix

Additional information, such as bank statements, patents, personal credit history, business credit history, equipment leases, resumes of skilled employees, licences and perm, can be included in the appendix. However, if the appendix gets shorter with the addition of additional information, it can be included in the form of a table at the beginning of the section.

10. Reviewing and revising the business plan

Some entrepreneurs set aside a business plan once it is complete. In this area, they make mistakes. Thus it is advised to review the business plan monthly and compare it with the projections (Abdullah, 2020). Reviewing and revising helps an entrepreneur to shift his course if the sales and the market conditions diverge from expectations.

Necessary tips and resources for business plans

While crafting a business plan, some resources and tips can be followed to make the business plan most effective. Entrepreneurs shall avert over-optimism. For instance, if he applies for a loan at a local bank, he should not over-emphasise anything as the officer who is in charge of the loan knows the market pretty well. Hence giving vague sales estimates will reduce the chances of getting loans. Proofreading the business plan is a must. This is because prospective investors and lenders can turn their interest away from the business if they encounter errors in the business plans. Suppose the entrepreneur himself needs to be more confident in writing a business plan. In that case, he can hire a professional business plan writer or a proofreader to help him make his business plan flawless (Abdullah, 2020). Various non-profit organisations offer a network of mentors and experts that can help entrepreneurs frame their business plans.

Outcomes of skipping a business plan

If a business plan is skipped, it can bring severe financial consequences, which can impede the growth of the business. Without a clear purpose, entrepreneurs can spend more money than required on employees’ salaries, office supplies and space, implying that the resources get wasted without any definite purpose. With a plan, the team members will have a clear direction, and thus the entire effort they put in will go without a purpose. Thus a significant reason to create a business plan is to direct the team members (Abdullah, 2020). A winning business plan will help in acquiring the business objectives and goals. Without a business plan, leaders go in the wrong direction and might spend too much time on something that will not bring fruitful results. This implies that with a business plan, an entrepreneur knows where his efforts will be spent. Entrepreneurs can take advantage of opportunities for growth in the absence of a business plan. They may also need to cover the overhead expenses. Furthermore, without clear directions and a blueprint to surmount challenges, business growth could be more robust, bringing financial losses to the organisation.

References

• Abdullah, R., 2020. Importance and contents of a business plan: A case-based approach. Jurnal Manajemen Indonesia, 20(2), pp.164-176.
• Jukova, E.E., Ilina, I.Y., Gundarin, M.V., Potekhina, E.V., Misanova, I.N. and Zotova, A.I., 2019. Planning a new business: typical mistakes of a business plan in the service sector. Journal of Environmental Management & Tourism, 10(3 (34)), pp.441-447.
• Watson, K. and McGowan, P., 2019. Emergent perspectives toward the business plan among nascent entrepreneur start-up competition participants. Journal of Small Business and Enterprise Development, 26(3), pp.421-440.
• Dal Mas, F., Massaro, M., Paoloni, P. and Kianto, A., 2021. Translating knowledge in new entrepreneurial ventures: the role of business plan development. VINE Journal of Information and Knowledge Management Systems.

FAQs

1. What is a business plan?

Ans: A business plan refers to a document created by the company that describes the goals, operations, marketing objectives and financial standpoints. In other words, a business plan is advantageous as it attracts investments from lenders and financial institutions.

2. Mention a few elements of a business plan?

Ans: A business plan shall include a competitive analysis, description of the organisation, appendix, financial plan, marketing analysis, summary of the growth strategies and a competitive analysis.

3. Why is it necessary to mention the business goals in the business plans?

Ans: It is necessary to mention the business goals in the business plan because it states the reason for having funds and the methods needed to acquire the business targets.

4. What happens in the absence of a business plan?

Ans: In the absence of a business plan, both the entrepreneurs and the team members will need a clear direction about how they should work, and thus their efforts may go in vain. Also, business leaders need to go in a different direction and spend their efforts on something that does not bring them profitable results.

5. Suggest tips for writing a successful business plan.

Ans: A professional business plan writer and a proofreader can be hired by any entrepreneur if he needs more confidence to craft his business plan. Care shall be taken that the business plan is way ahead of flaws. To do this, an entrepreneur must thoroughly research the market and identify competitors. Attention shall be given while writing the executive summary as it comprises the most important aspect of writing a business plan.

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