A business plan can help evaluate the viability of a business idea. Often times, business ideas are not viable. They may be simply ahead of their time. Or, other factors such as insufficient funding, a small market, heavy competition, an insufficient supply of raw materials, can hamper the execution of a startup idea. Entrepreneurs will therefore benefit by first developing a business plan. The plan will help them evaluate the viability of their idea, streamline their focus and help them understand the requirements to start and grow their business.
Creating an ideal business plan requires solid research. The more you dig into details, the more data you collect, which aids in decision making. It cannot be stressed enough, how important it is to actually make a plan that incorporates all aspects of your business. Of course, you need not incorporate all your knowledge and research findings into the business plan. The business plan will be read by investors, bankers, employees or potential partners, buyers etc. They will not want to go through reams and reams of information to understand your business, just an informative but brief document will serve the purpose.
Be sure to target your research on the industry in which you are operating. And using an industry-specific template could help. For example, using a bar business plan template would significantly reduce the time needed for you to create a business plan for a bar you wanted to open or grow.
The readers are diverse but limited so you can keep the tone and style of content simple and formal. You can avoid using too many technical jargon. Bankers or angel investors will be more inclined to read the financial statements and projections, while employees and partners would be more interested to read the goals and values of the business. It is therefore essential to keep these things in mind while preparing a business plan.
A great business plan must provide factual evidence and convince its readers that it is indeed a sensible idea and guarantees success. It has to prove to investors and especially you, that the business idea is practical, logical and completely achievable. It must ensure good results. It must therefore have a blueprint for the management and operations team to follow during the initial years.
Apart from the financial plans, a business plan must also evaluate the future status of competition, the current and future sales and marketing needs, the personnel requirements whether seasonal, permanent or contract basis and other operational responsibilities. You will also need to include data about where you want to set up your company, warehouses required and other infrastructure. Charting out all these requirements along with the required funds and cash flow will help you discover issues that otherwise may go unnoticed.
Many entrepreneurs have a misconception that a business plan is only necessary to attract investors. But it is actually a way to evaluate their business ideas and revise its execution without undertaking extra risk.
A good business plan gives you an opportunity to study your customer demographics and their needs, identify competition in the market, examine how your idea can stand out and attract consumers, and how you intend to be a success. It also helps you check the feasibility of your business operations.
It is advised to spend much time researching and understanding the products/services you wish to offer, your company and the market. It is advantageous if you have complete knowledge about the business you are entering. Developing a business plan gives you just that – complete understanding of your business process and the market you are getting into. It is also a chance to convey your goals and visions of your business to intended audience, that is, your employees, investors or potential partners.
A clear and concise document in simple language that is, without many technical terms, and including facts, figures and a well laid out strategy for running the business will definitely be the key to creating a brilliant business plan.