Purpose of Business Plan
The purpose of a business plan is to state the vision, mission of a company, and the steps needed to be taken to achieve them. A business plan provides a guideline for a company. It covers the company’s budget, SWOT analysis, contingency plan, operational management, and evaluation of a product, customer satisfaction, and many more. A good business plan will determine the progress of your business in the long run.
Determinants of Business Plan:
- Type of Business
- Business location
- Time to create a business plan
- Market ups and downs
- Operational Plan
- Competitive Analysis
- Making Progress Plan
- How to evaluate the Progress of business in the future?
Before creating a business plan, certain key factors must be considered. Firstly, the type of business. Once you have a good understanding of the business nature, you can create the business plan better. Next, the location of a business. Check your direct competitors on the same location, their products, staff, and the demand in that region. All these should be included in the business plan.
Time to make a Business Plan
Creating a business plan can be easy but analyzing its need is somewhat critical. Before drafting a business plan, it should be analyzed whether your company needs a business plan or not. According to the Harvard Business Review:
The “businesses who become most successful were the ones who made their business plan between 6-12 months after they decided to start a business. This step increased their scheme’s success by 8%. The business who spent 3 months making their plans had chances of success up to 12%. The success chances rose up to 27% for those who created plans according to the customers and audience.”
If you have drafted a business plan and kept the plan on it even if you are losing money, then it’s nonsense.
Market’s Ups and Downs
Market strategy is one of the key factors of a business plan. Make a thorough research on the trends and operational management of the market. Take notes about the demand and supply in the market you are thinking to enter. Note the ups and downs of different products and then you can set up your targets and make a business plan accordingly.
While drafting a business plan, a complete operational plan should be made. This will determine the functioning of the business clearly. There must also be well-defined operational management of the company while creating the business plan.
Your business plan must also include the responsibilities of staff, capital allocation, manpower, and many more details of your business.
When you enter a new market, there are many well-settled competitors with whom you will be competing. You can only win the competition when you know the weakness and strengths of your competitors. Once you come to know what things make your competitor’s business advance and what can influence it negatively, you can create your advantageous business plan accordingly.
You must also create some barriers. In this case, your competitors cannot easily enter your territory. Along with this, your weaknesses must be considered as well. Keeping all the above-mentioned things in mind, a better business plan should be created.
Making Progress Plan
The progress plan should be a source of fascination to your investors, and descriptive enough to highlight the merits of your product and the services easily to the investors.
In your business plan, write down the procedure of improving your product or service in the future. Create a development budget that will accomplish its goals. Also, write down what will be your marketing strategies in the future?
How to evaluate the progress in the future?
For any successful business, evaluation is of the key factors. There are many ways through which one can evaluate the progress of the company. Like you can make a survey and ask the people about the quality of the product or you can simply place the blank page along with a pen and the customer will note down about his reviews. Or ask a group of people about the service you are providing and if the response is positive then it means all is good. If the response is against the service you are providing, then you must take some action and resolve the issue. This thing attracts the customers as well and keeps your company on the track.
Write down in your business plan about the way you will be doing the evaluation of your service in the future now.
Length of Business Plan
The length of the business plan depends on the size of the company and how you intend to use the plan. It may be simple or comprehensive depending upon your strategy. The more detail you put into the business plan, the more it will be easier to run the company.
Updating the Business Plan
Updating the business plan depends upon the current situation of the company. It might be possible to update the business plan every quarter of the year if things don’t go as planned. In this way, you should revise your business plan. It might be possible that you don’t need a business plan even after one year. It also depends upon the demand and supply of the product and customer satisfaction.
The importance of a business plan cannot be denied in the modern world too, it still helps in playing a vital role in launching a profitable business. A business plan still plays a critical role in launching a profitable and sustainable venture today. New data and research show that the best plan comes later in the journey, and it is important to analyze your funding first and then start a business. To create a business plan, then there are many formats available that are adjusted in such a way that it will help leaner startups to grow fast. Do not let this process slow you down.
It does not matter how you design your plan and who you show your plan to, just be sure that you have some experience that you should review your work.
Creating Business Plan FAQs
It is recommended to review your business plan every quarter of the year.
It is important to create a business plan because it serves as a guideline for the business owners. By having a business plan, the business owner knows what the vision and mission of a company are, and the steps needed to be taken to achieve them.
Some other names of a business plan are business strategy, market strategy, sales plan, business proposal, strategic plans, lean plans, internal plans, operational plans, and many others.
The purpose of a business plan is to state the vision, mission of a company, and the steps needed to be taken to achieve them.