ROAD MAP TO DRAFT A BEST BUSINESS PLAN Executive summary It is a very important section while drafting a clear business plan. Executive summary reveals that how the company is planning for its future growth and whether this is different from others’. Apart from discussing organizational plan, product/service plan, marketing plan, survival and growth plan and financial plan it should also answer some critical questions such as:
Why this business will be successful?
What is the risk appetite level of the business owner?
What is the level of fund required to successfully launch the business and how much will be promoters’ fund?
What is the short-term and long-term goal of the business?
Business Description This includes the core related areas surrounding the business and product/services. Some of the key questions could be: What is the core area of business chosen? What is the product or service which will be sold? What is the growth potential? What is the business life?
Organizational description This is all about the organizational structure and unique factors which competitors do not have. Whether there is a plan to have Pvt Ltd or LLP or any other structure for the business. Has the business idea been conceived by a single person or more people are involved. Whether there is single decision authority etc. in nutshell, the following questions may be important to be considered:
What is the legal status of the company and future plan?
How many are key decision makers?
How many managers are required (operational segment-wise)
How many technical personnel are required?
How many sales personnel are required?
What is the plan to increase the number of personnel in next 12 months?
Product and services What is marketed are actually products and services. This section should comprehensively include even the small aspects related to products/services. “What is the USP of the product and how it serves the exact need of the customers” should be very clearly mentioned. If services are attached to the product then focus should be highlighting the add-on benefits which customers will derive. Every product has the life. The section must mention the approximate product life. Also, how the company will plan with the new or modified product with extended or with at least earlier similar benefits. Few questions which draw attention are:
Is it a standard product or a customized one?
If it is standard product and any customer wishes to add some more features then is it possible?
Whether IP has been taken on the product?
How product maturity shall be tackled?
What will be the R&D cost and maintenance to the business?
Industry Industry dynamics always change. The business plan must include the probable changes and the way to overcome those changes. Key success factors should be identified and should be mentioned that how the company will go forward. The complete industry should be categorized into segments and sub-segments and accordingly, the customers should be identified. This section must include also:
Who are the targeted customers?
What is the size of the targeted customers?
Who are the competitors? (in numbers)
What is the expected market share for this product/service?
Marketing Many business plans usually say that what marketing channel shall be used to market products/ services. But a sound and explanatory business plan should clearly express that HOW MARKETING WILL BE DONE, WHICH CHANNEL SHOULD BE
ADOPTED AND THE EXPECTED TANGIBLE BENEFITS WHICH THE COMPANY WILL DERIVE FROM IN TERMS OF GROWTH OF CUSTOMERS.
This section should answer the following also:
Why the customers will need it?
How the potential customers can be reached?
Can the customers manage their business operations without this new product/service?
Does the price (cost to the customers) of the product/service justify the benefits?
Threats No business can avoid threats. It should be mentioned that how the possible threats should be handled. Answering the following questions may be beneficial:
What could be the potential threats?
How frequently it can come?
What will be the level of impact of the threat to the business?
How the company will overcome it?
Financials Financial plan is one of the crucial aspects because ultimate objective is to raise finance and use it for various purposes. How much finance is needed at which place should be mentioned? The following should be included:
What will be the promoters’ contribution?
For what purpose the promoters’ money shall be used?
What will be the exit option to the investors?
To conclude, Every business plan is unique in its case. So it should be drafted with utmost care. Moreover, it should include all the planning aspects and should be self-explanatory. Loopholes, if any, should be highlighted and also the way to remove those loopholes. This will make the business plan more genuine and presentable.
ROAD MAP TO DRAFT A BEST BUSINESS PLAN
ROAD MAP TO DRAFT A BEST BUSINESS PLAN Executive summary It is a very important section while drafting a clear business plan. Executive summary reveal...