When you conceptualize an idea and want it to transform into a business, the first step of transformation is described as a business plan.
To put it in simple words, a business plan is nothing but a detailed description of what you foresee for the business. This could be a short paragraph or an in-depth description of what you are planning.
Although some people believe that short business plans make more sense, this leaves a lot of ambiguity and it becomes difficult to put it into action effectively. A detailed business plan should include every little detail, irrespective of how small it is. This is because more planning means less room for error.
The different types of business plans
To come up with a strong business plan, you need to know which type of business plan suits you the best.
Let’s take a look at some of the most popular business plans people use.
Start-up business plan
Any new business should use a start-up business plan that includes all detailed steps that the business needs to take before it launches.
This should include details of the product or service the business would deal with, the margins, the supply chain, and the management team. In case there are any investors needed, then that should be included in the plan, including a breakup of how the investors will benefit.
Internal business plan
This relates to a specific target audience for a section of the business, for example, the marketing team.
This plan is drawn out to check on the current situation of the team, what they need to take it to the next level, expenses, and potential returns. This could include marketing, advertising, and upgrading costs.
Strategic business plan
This is a strategy based business plan that is usually a long term plan, for example, a five-year plan.
This usually revolves around elements such as the vision and mission of the business, the success factors, and techniques required to obtain success. Plus, it should also include how these plans will be implemented.
This summarizes the goals of the company as a whole.
Feasibility business plan
A feasible plan is a quick solution or a backup plan to turn a venture into a profit quickly for the business to sustain in the market. This could be described as targeting a certain demographic or investing a certain amount for the plan to fall in place.
What to include in your business plan?
Business owners are often confused with regards to what they should and shouldn’t include in a business plan. If you are ready to write a business plan but have no idea where to start, then these tips may help you.
In this section of the business plan, you discuss the nature of the business, talk about the products or services you offer, and how they are different from others in the market.
In this section of the plan, you should focus on your plan to take action and how you will implement your ideas for your business to grow and become successful and how you will achieve your business goals.
This is perhaps the most important section of your business plan where you discuss why your business is better than other competitors in the market and how you will grab the attention of customers to capture a large market share.
An important aspect of a good business plan should emphasize your target audience. This should include who your customers are, the demographic you’ll target, and how you’ll attract and retain customers so you make a profit.
Here is where you explain how you’ll market your business effectively to set your business apart from the rest.
An integral part of your business plan should talk about the role your employees and management team will play in helping your business to get where you want it to be. This should have a detailed description of every individual responsible and involved in the business.
This section of your business plan should focus on past turnovers and how you plan to scale it to new heights. It should talk about projection, realistic expectations, scalability, and the possibility of reinvesting for the business to grow.
Frequently asked questions about business plans
If this is your first time writing up a business plan or if your past business plans have not been up to the mark, then let’s take a look at a few questions that business owners frequently ask about business plans.
Do I need to include all sections mentioned above?
For the most part, you should try and include as much information as possible so your business plan is clear.
However, this doesn’t mean you have to follow everything mentioned above because every business is different and each business plan will be a little different from the other based on the nature of the business.
While you can refer to these sections, you should feel free to add your touch to your business plan.
Is it important to have a detailed business plan?
To answer in simple words, yes.
The more detailed your business plan is, the easier it gets for you to put those plans into action without any room for error. While writing a business plan, your focus should be on business growth.
So make sure you break down every component and make it as detailed as possible for easy understanding and implementation. Your business plan is something that should be easy to follow even for someone who is not related to the business.
Can I start my business during an economic downturn?
The economy is a roller coaster ride that goes up and down and there is no telling how this roller coaster is going to move.
However, holding back your business plan because of an economic downturn is not something you should consider doing because this could be one of the best times for you to start a business.
Besides, all the other business owners who will hold back their plans will not be ready when the market goes up again while you will be ready to take on the market.
Do you need a business plan?
Every business owner should have a strong business plan in place since it helps the business grow and it helps them focus in the right direction.
Whether you want to apply for a loan or you want to know what your next plan of action needs to be, a good business plan is always handy. It also helps you attract the right investors and it helps the business scale to new heights.
A comprehensive business plan also helps you take your business to new heights and it allows you to unleash your creativity without drifting away from your core focus area. The business plan also gives you a reality check when you drift away or if there is a flaw in the plan.
How long should my business plan be?
A business plan does not have any limitations on the number of words you can include in it, but let’s face it, no one wants to read a novel based on your business.
If you are looking for investors, a long business plan is going to scare them rather than get them interested. While it needs to be detailed, it should be comprehensive. Twenty to thirty pages is an ideal length for a business plan.
How should you present your business plan?
Even if your business plan is compelling, it needs to be presented in the right manner, or else it could go downhill very fast.
If you have a good business plan in place, here are a few strategies to present your plan to lower the risk of rejection:
- Get leads & referrals – The right network plays a crucial role in your business success. When presenting your business plan, try to present it to people who you’ve been referred to and are part of your network.
- Research your target – Before approaching an investor, understand them as much as possible. Having a common ground to talk about and already having a number in your head when meeting with them makes things easier.
- Make your pitch – Before directly meeting with someone, have a detailed email or a spoken pitch ready to entice them about your business plan. Divulge a little information, just enough to get them enticed, but leave a little room for curiosity so they will be eager to learn more about your business.
Is there a right time to revise your business plan?
Many people wonder whether they should update their business plans periodically. Change is never easy and most businesses like to stick to their original plan.
As a business owner, you should remember that change is part of the game and you should always be open to upgrading or changing your business plan the minute it stops working for you.
You should always remember that creating a personalized and effective business plan is not rocket science. You need to get comfortable with the idea of putting down your ideas and concepts on paper because what you envision in your head should be easy for others to understand. This way everyone will move in the right direction with a common goal.