Designing a Successful Business Plan: A Comprehensive Guide

Introduction

The term “Business Plan” refers to a comprehensive document containing essential information such as vision, mission, promoters or promoter group information, market size, product or service description, growth strategy, marketing strategy and other similar pieces of information about the particular business. The main purpose of this document is to guide the business and provide a structural approach to achieve its objectives and succeed. It helps a business realise both long and short term goals. Moreover, banks or other investors might also require your business plan before providing you with funds to ensure your business is viable and determine its profitability. Therefore, Business Plans play a crucial role in making a business successful. It is a navigating tool, which not only describes your aspirations but also contains the strategy to achieve those aspirations. In this article, we will learn everything about Business Plans, their types, benefits and contents etc

Categories of Business Plan

Business Plans can be broadly categorised into 8 different types, which are as follows:

• Startup Plan: As the name suggests, those Business Plans made specifically for startups or young/new businesses are called Startup Plans. These plans contain all the information that a typical business plan may contain. However, the only difference is that they are startups specific and may focus more on their technology or innovation. As the startup business grows, it may inculcate the required changes in the Plan.

• Strategic Plan: A plan that describes the strategies which will be used by the business to achieve its goals is called a strategic plan, these plans are crucial for any business as they contain the strategies which will be used by the business to achieve success. This Plan contains information such as vision and mission statements, deadlines, strategic planning etc.

• Feasibility Plan: These plans are generally used in the initial phase of a business. Moreover, those businesses which are introducing a product for the first time in an existing market or an existing product in a new market undertake a feasibility study and make a feasibility plan. These plans contain important insights into the feasibility of the business and its prospects of profitability. This plan may incorporate processes like product testing, soft launching, laboratory testing etc.

• Operations Plan: These plans are often referred to as Annual Plans, they contain information about the day-to-day functioning of a business. It may also contain details about the responsibility of management, departments, workers etc. This plan has all the information relating to the operations of the business on a daily basis. It may be used to explain any increment in operating expenses or may be used to lower the overhead expenses to ultimately lower the operational expenses.

• Expansion Plan: As the name suggests, this plan contains the strategies to expand the business and take it to new horizons. Expansion plans can further be divided into two types — Internal growth plans and external growth plans. All the expansions relating to external factors and environment are contained in the external growth plan. Similarly, internal expansion plans are contained in internal growth plans.

• What-If Plan: These plans are designed to tackle the worst-case scenarios. These plans are designed whenever the business is considering taking a risky move such as financing, restructuring, M&A etc. These plans come in handy when things go south. Compared to other plans, this is less formal and provides an alternative to business when difficult times arrive. These plans are made to help the management of the business by providing alternatives and provide assistance in decision-making.

• One Page Plan: These plans are even shorter than the lean plans, which only contain the major information about the business. A one-page plan is simply the summary of a lean plan. It only contains the most important pieces of information that too in the shortest possible form. This plan is used to brief the potential partners or investors about the business. It contains information about the product/services offered by the business, its target market and sales forecast. This plan is also referred to as a business pitch.

Benefits of a Business Plan

The following are the benefits of a Business Plan:

• Tests the practicability and feasibility of the business.
• Provides a structured framework for your business
• Provides strategies for various stages of business
• Assists in making informed decisions
• Gives the clarity and direction a business needs the most
• Effective management and planning for the resources and finances of the business
• Provides insights to potential investors and patterns of your business 
• Makes you ready for unforeseeable and difficult circumstances
• Lowers the chances of failure and provides a risk management tool

How to Design a Business Plan for Your Business

Every business owner should make a Business Plan before commencing its business. A detailed Business Plan not only acts as a guide but also provides various other benefits such as risk management, assistance in decision-making, strategic planning etc. One can go online to decision their Business Plan, there will be an uncountable number of templates available there. However, it is advised not to use them as they are generalised and will result in a generic-looking Business Plan for your business. Therefore getting help from experienced professionals is a must to decision an appropriate Plan for your business.

Contents of Business Plan

Before getting to know about the components of a Business Plan, let’s first understand what are the questions, which a Business Plan must answer:

1. What problem does the business Solve?
2. How will it do so?
3. What is the market?
4. How will the business make money?

All these questions are answered in a business plan through the various components it contains, the following are the major components of a Business Plan:

• Company Description: This part of the Business Plan, contains all the information about the company including its name, logo, vision and mission statements, contact information, registered office and other similar information.

• Executive Summary: This part is one of the most important parts of any Business Plan as the investors, bankers and other stakeholders read this part first before proceeding to other parts. This part simply contains the summary of the most important details about the business.

• Business Opportunity: This part describes, how the business will be sustained by offering the solution to the identified problem. This part is simply about the opportunity which the business has taken to solve a major unaddressed problem.

• Business Model: As the name suggests this is the part, where the Business Model of the company is explained. It includes information such as the earnings of the company, revenue streams, passive incomes etc.

• Competition Analysis: This is the major part of any Business Plan. It plays a significant role in the decision-making of the investors. If a business has many competitors it will attract fewer investors on the other hand if a business has fewer competitors then it will attract more investors. This part of the Plan contains information about the competition in the market and their share. It also provides details about how the business is going to penetrate the market and acquire the major or desired share.

• Marketing Plan: Marketing is inevitable in today’s world. No business can succeed without marketing in this digital world. Therefore nowadays marketing plan is also an important component of any Business Plan. It contains information about the marketing strategy which will be used by the business to make customers aware of the business.

• Financial Summary:  Finance planning is an important aspect of any Business Plan. Proper planning is the difference between a successful and a failed business. Therefore a comprehensive financial plan should be incorporated in the Business Plan.

• Funding Requirements: This part of the business plan may be crucial for businesses which require funding. Such businesses should put the required amount of effort into designing this part. It should contain details about the required funds, utilisation of funds, profitability etc.

• Key Milestones: This part is included in the Business Plan for guiding the management of the business. It contains information about the major milestones which the company wants to achieve. After achieving a specific milestone a different strategy or new product may be introduced to speed up the growth of the business.

• Competitive Advantages: All the information relating to your business, which suggests that it is unique may be included in this part. Advantages such as patents, trademarks or other IPRs are prime examples of such advantages. Nowadays technological advantages are also included in this part. It suggests how your business is unique and different from other competitors in the market. If a business has several competitive advantages then it might attract more investors.

• Exit Strategy: As the name suggests, this part contains the strategy to exit for the founders, promoters and top-level management. Such strategies may be implemented at various stages of a business. One such most popular stage is the IPO (Initial Public Offering) stage of the business.

Conclusion

In conclusion, a Business Plan indeed plays a crucial role in navigating a business to success through its desired path. It is not only useful for large businesses but also for smaller businesses including startups. Moreover, as a company or business grows and expands its operations, adequate changes may be required in the Business Plan. It is important to note that a Business Plan is not a carving of a stone which may never be changed. It is a living document, which you may change as per your requirements.