What is a business plan?
A business plan is a document which clearly lays out how your business achieves its goals. It’s a roadmap which describes how you attain specific business objectives.
According to Wikipedia, a business plan is a
“Formal statement of business goals, reasons they are attainable, and plans for reaching them.”
You can use it to have a complete understanding of your venture’s design and it can also be presented to potential investors, collaborators or partners.
A good business plan should have all the details of the venture, including market trends, products, services, marketing plans, management and financial projections. It should contain an overview of the concerned industry along with the features that distinguish the business from its potential competitors.
Business plans are usually laid out as a part of the startup process. But existing businesses also make use of them when they change direction or adopt new objectives. The length and style of business plans vary from business to business.
So how can a business plan help your venture?
- Funding your business
There are several ways to fund your business. All of them, from banks to venture capital firms, ask for a business plan when you approach them. A business plan can easily convey your passion to your investors and also show them where their money is going exactly. This will make it easier to convince potential investors and collaborators.
- Setting your goals and objectives
A business plan can help you clearly lay out your goals and objectives. It will help you in keeping your business on track. Whenever you feel confused or that the business is losing its focus, the business plan can be used as an encouraging reminder yourself and your colleagues.
- Getting you priorities straight
Your business requires effort in multiple aspects, but all of them don’t have to be done at once. A good business plan will help you set your priorities and avoid unnecessary multitasking and confusion. You can update your priorities as the business progresses.
- Delegating better and getting more done
Business planning is the perfect time to make sure that every important task is assigned to someone responsible. In this way, you can make sure that every aspect is being handled properly.
- Understanding the market
A key part of a good business plan is its market analysis. It should contain the behavior of the industry, its merits demerits and the legalities required. It will also help you in understanding your potential competitors. This will help you to get an insight into the industry and follow the popular trends in the market.
- Uncovering your weaknesses
A good business plan can help you understand the pressure points you will face and make sure you conquer them before they become your weak spots. It can also stop you from committing the same mistakes that your competitors had made in the past.
- Foreseeing trouble
When the reality of your business doesn’t match the much-deliberated plan, you can be sure that something is going wrong somewhere. With a good business plan in hand, even the slightest deviation will alert you. Your business plan will help you figure out where the discrepancy started and rectify it immediately.
- Evaluating what you have achieved
A business plan is usually planned for 3 – 5 years. You can view it as a milestone and an end-goal that you can work hard towards. At the end of this term, this same plan can be used to evaluate whether your goals have been achieved or not.
The size and style of your business plan should be unique to you. It could be anything ranging from an outline of few pages to a 50 page presentation. It depends on what your objectives are and how you plan to achieve them.
However, in order to make a good business plan, thorough research needs to take place before hand. For it to be beneficial, It must be well organized and carefully written. It should also be periodically reviewed and updated.
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