Importance of Business Plan
Every business—small or big—needs a Business Plan. This plan is a well written document which contains the details of business, its goal, message, legal structure, go-to market and revenue strategy.
A business plan has become a vital ingredient for the success for any organization. Though, we often fall apart and diverge from the written document, still this document acts as reference point to know where and how it started. Business plan helps us to fall back on basics and mend what went wrong and in what way.
If you really wish to start a startup and is very passionate about it, writing a business plan is the first thing you need to figure out for its proper functioning. Not only it acts as a reference, but also it helps to attract investors and provides direction.
Writing Your Business Plan
Here is a detailed structure of writing your very first Business Plan. Different business plans might have different structure but these points are the most common which are found among all the plans.
This is the first part of your business plan and this acts as a window for an individual or an investor to continue reading the whole plan. This section of your plan contains the important heads of your business. These includes:
- Business name
- Legal Structure of your business
- What do you do as business in brief. This is a very top level introduction to your business.
- Location of Business; means where you wish to primarily locate your business.
- Mission: Mission acts as the driving force and this one of the most important areas which the investor looks into before investing.
- Chart of Accountability: Describes who is accountable for the major roles and functions of your business. There are 4 main roles which startup should primarily have in 2020 i.e Operations, Marketing, Finance, and Technology. These roles should be strictly divided for an efficient work process of business.
This is the second section of your business plan and it’s really important for any business who chalk out its message which it wants to convey to its customers. One should primarily ask itself these 7 questions before writing down its full message:
- What message do you communicate to your customers?
- What problems do you solve for them?
- What results do you offer?
- How does your company create those results?
- Who does your company serve?
- Why should the customers choose you?
- What is the step by step plan to achieve those results?
These questions help you to answer your customers in detail about your business proposition.
This is one of the most difficult yet most important section to plan and chalk out. All businesses produce some solution to a problem but marketing the solution is the most daunting aspect for any sort of business.
Answering the questions like these will help you analyze and strategize your go to marketing strategy.
- How will you market that solution?
- How are you going to generate sales? What will be your initial source of revenue once you launch?
- What’s the visibility strategy? How will your customers know and learn about your Product and Service?
- How are you going to display your service/ products to your customers?
- What story will you tell them?
- What is the lead generation strategy? How will you contact your target audience.
- What is the conversion strategy? How you intend to turn leads into revenue paying customers.
These questions have never been easy to answer for any sort of business.
Next thing which come under Marketing is to find your Target audience on the following basis:
- Demographics i.e Age, Income, and Interests
- Psychographics i.e Desires, Fears etc.
- Size of your target market
- Where can you find the groups of your target customers
As you write up your business plan and try to answer all these questions, you will realize that you don’t know the answers to majority or even all of the questions.
This problem is fine and casual with all businesses. Further, not able to answer all the questions gives you a call to analyze and research your business idea before getting into the real marketing and face unplanned and unexpected things.
Brainstorming over Marketing and Operations will help you more in creating better strategies and solutions to achieve our mission.
You might want to read about How to leverage Email Marketing for your Business.
This is the section you write to tell and know what you’re either building or what do you intend to serve as business. A product can be Physical, Digital, Service etc. But one should primarily keep emphasis to only a single category of product or service, though you can sell as many products and service you want, but the primary goal should be to serve or sell one niche and situate the similar categories around it.
For example, you wish to start a restaurant and you situate your niche as an Italian Restaurant, now you will market yourself as an Italian restaurant; you will create recognition and Brand of yours as someone with a great Italian menu. Now imagine marketing yourself simply as a restaurant without any niche would not only confuse your customers but also yourself in understanding the real essence of your brand.
Therefore, it is advisable to stick to one niche and grow as much as possible before trying other areas.
Next we need to write about the impact our product creates in the life of our customers. This will be our value proposition which we intent to offer and create for our customers.
Goals and Projections
If you have ever seen or heard of a perfect business plan, you will see that there is a section solely dedicated to goals and projections. This part of your business plan helps you project sales and describe your goals strictly in terms of:
Moreover, describe and project your quarterly, yearly and five-yearly goals. These projections should never be based on utopian assumptions and beliefs but based on facts and real research.
Lastly, having ideas is very easy but executing and making them work is the most difficult part. Business plan is the best and the only way to learn more about your Business and its impact in the market.
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Get more knowledge about Startups in our Startup Guide.