15 STEPS TO MAKE A PERFECT BUSINESS PLAN?
A strong business needs a good business plan which guides you through each stage of the business process and helps you to manage it effectively. Here we are listing out 15 topics that you need to focus on before we start a real business. A proper business plan is an essential content of a business for raising capital from investors and also to get the confidence of them.
A well-defined business plan is like a road trip, once we know the destination and different roots and hurdles to reach there, we can drive it easily as we already planned our road map. Once you have a clear business plan, it will be easy for you to start, run it, overcome the hurdles, and reach your goals.
- Goals Vision & Objectives.
- Product & Service.
- Unique Value Proposition (USP).
- Market Opportunity.
- Target Customers and what they want.
- Demand and supply in the market.
- Major Business competitors.
- Strategy for Marketing Goals.
- How much capital is needed to put the business
- Infrastructure and further requirements.
- SWOT Analysis.
- The business sales target for the next 1, 3, and 5 years.
- Business Road Map.
- When we start business revenue.
- Executive summary.
1. Goals, Vision, & Objectives.
The first thing we need to plan is our goals, vision, and objectives of our business. Write it done on a paper, Visualize it, edit it and make it suitable as we can achieve it within a specific time frame.
- Goals are statements that define what we need to be accomplished by our business.
- Vision is a general statement, series of ways, and strategies of how you will achieve your goals.
- Objectives are specific actions and timelines to achieve the goal.
Goals, vision, and objectives make it clear for everyone involved in the organization about the purpose of the business and help them to focus on the business.
2. Product & Service.
The next prime step of a business plan is to define our products/services which we are going to offer to our customers. products and services are closely aligned. The strength of every business is based on the demand and supply of products and services which we offer to the customers.
- Products a tangible item to the customers for acquisition or consumption against payment.
- Service is an intangible item, which serves the customers against payment.
Tangible means it can be very easily touchable and countable to the consumers and it will lead to direct examination and judgment of our business. The success of every business is directly proportional to the satisfaction of our product and service to our customers.
3. Unique Value Proposition
The next step is to define our Unique Value Proposition (UVP) of our products and service. It is also known as a unique selling proposition (USP). Unique Value Proposition is a clear statement that describes the following to the customers.
- How we solve customer’s problems.
- The benefit of our product and service.
- How we satisfy our customer’s needs.
- What distinguishes us from the competition.
Our USP will help us to stand out among our competitors in the market. The strength of USP is directly proportional to the success of our business.
4. Market Opportunity.
Next, we have to do our market analysis and studies in the targeted market for our service and product opportunities. Strong market analysis in a specific market and industry will help us to identify our market opportunity available now and over the next several years. To identify the market opportunity we need to identify the direct and indirect competitors for our products and services.
- The market opportunity is your sizing forecast for a specific product or service.
Our Market opportunity data will help us to identify and define the success rate of our business as it is directly proportional. Market opportunity analysis helps us to tune our product and service to tap more opportunities in the niche market.
5. Target Customers and what they want.
Next, we need to identify and list out the details of targeted customers in our scope of product and service offering and what they are looking for from a vendor. A target market is a group of customers within a business serviceable available market. To identify the target customers, we need to execute the consumer segmentation, their purchasing decisions for our product offering in the target market.
- Target customers are those who are most likely to buy from us.
Once we know our target customers in the market, we can concentrate our marketing efforts and resources on those specific customers as per customer needs.
6. Demand and supply in the market.
The success of every business is based on the demand for our product and service in the market. Once we identify the market opportunity and currently available supply, we need to design our products and service, in such a way that it will have high demand in the market. Market demand is the total quantity demanded across all consumers in a market for a given service and products.
- Demand and Supply is the relationship between the quantity of a commodity and service available in the market and the quantity that consumers wish to consume.
As demand and supply is the price determination factor in the market, demand and supply analysis help us to define the pricing and profitability of our product and service. Success and profitability of any business is directly based on either direct and indirect demand for our products and service in the market.
7. Major Business competitors.
Next, we need to identify and list our business competitors in the market. Market analyses with help us to Identify our competitors and their strength and meekness. We can classify the competitors into 3 categories, Direct, Indirect, and Replacement.
- Direct competitors are those that sell a similar product or service like ours.
- Indirect competitors are that sell the same category but it will be different to act as a substitute for our product or service.
- Replacementcompetitors are that both different in category and type than you, but one which our customers could choose to buy.
As the success of our product and service fully depends on the market competition, we need to profile our competitors as maximum as possible including their Objectives and Strategies then we can compare our-self with them to identify our USP against their product offering. The clear understanding of our competitors, dig deep into their products and strategies and proper documents will help us to position our-self to achieve goals.
8. Strategy for Marketing Goals.
Marketing strategy is all about the methods to archive the marketing goals. Once we understand our competitors, our USP, and demand and supply in the market, we need to identify and define a set of strategies to achieve our marketing goals including advertisements, product positioning, and business development plan for the short and long term.
- Strategy for Marketing goals is a forward-looking approach and an overall game plan of any business to achieve goals by understanding the needs and wants of customers.
Once we have the proper strategy for the marketing goals, we can execute it as a routine operation of our business and our products and service and position in the market within a short time frame.
9. How much capital is needed to put the business
Every business has its own financing needs for raw material, marketing, operation and to reach a profitability position. We need to do an estimate for the actual cost of running and capital investments needed for the business. Also need to anticipate an additional about 10% of the overall cost for the unforeseen cost which may need to manage during the operation.
- Business capital is Ideallyas much as money needs to reach the profitability of the business.
Capital is the money or wealth needed to produce goods and services. All businesses must need adequate capital in order to start and maintain operations.
10. Infrastructure and further requirements.
Infrastructure included physical things like building for operation, facilities like vehicles for transportation, and basic software and services needed from a third party to start and run the business. Proper infrastructure helps us to run our business smoothly and more productively. Infrastructure is the foundation of every business including small scale and large scale business.
- Business infrastructure is the basic facilities and structures upon which the entire business is running.
As infrastructure is the backbone of every business, to start a successful business, we need to identify all the infrastructural requirements well in advance. Proper identification of infrastructural requirements will help in cost estimation for capital raising.
11. SWOT Analysis
A SWOT (strengths, weaknesses, opportunities, and threats) analysis looks at factors that can affect your business. We can divide the factors into internal and external. Strengths and Weaknesses are Internal factors and we have control over it, however, Opportunities and Threats are external factors and we don’t have much control over them.
- SWOT analysis is a technique used to identify strengths, weaknesses, opportunities, and threats related to business.
Once we did our SWOT analysis, we need to work out to improve our internal factors and plan the strategy for control the external factors for the development of our business. Well documented SWOT analysis is the foundation of any business.
12. Business sales target for next 1, 3, and 5 years.
Business Sales Target helps the organization to draw a clear path and strategy to achieve the targets and help investors to get clarity about when they will get back their investments. The well-defined sales target for 1, 3, 5 years help the entire organization to plan their cash inflow and outflow for the next five years and it, in turn, help them to strategics the entire business process.
- A business sales target is a goal set for a business organization measured in terms of revenue or units sold for a specific time.
Setting up business sales targets helps to keep the entire organization to focus to achieve the goals. Once the team knows their annual targets, they can break it down to quarterly and monthly and plan for the entire business strategy accordingly.
13. Business Road Map.
Business road-maps are execution-focused plans on the base of Vision, strategy, and goals that need to achieve in the near and far future, It should include more about the particularity growth plan for an entire organization with the defined time frame. A proper business road map needs to define the role and responsibility of each unit in an organization with a defined growth rate over time.
- A business road map is a long view of where our organization is going and how we getting there.
As Businesses comprising of multiple departments, a road-map prevents individual departments from diverting from the business focus as it defines each department’s role in upcoming growth.
14. When we start business revenue.
The business Revenue Model is an important component of the business as it defines how and when a business will generate revenue from its operation. An entire business process is based on revenue models as it controls the cash inflow and helps to manage the capital. We need to define how long our business will take to reach a break-even point (the point at which total revenue equals total costs).
- The business revenue model is the strategy of planning a company’s revenue streams and the resources required with the timeline.
As Revenue Model describes how a company generates revenue from the value it gives to the customers, it is essential to plan, manage, and well define before actually start a business. The well-defined revenue model will give confidence to the investors and it will help to raise the capital easily.
15. Executive summary.
The executive summary is to give an overview of our business without reading the entire plan. It explains the main purpose and revenue models in short of our business in the words of executives. It includes the necessary information that investors can see the potential in our business.
- The executive summary is the short, concise, and optimistic overview of our Business Plan.
In general executive summary written at last of the business plan even though, it covers the basic idea about the business. It will give confidence to the investors as it captures the reader’s attention quickly and gives them an interest in understanding more about our business.
A business plan is a formal written document covering the above topics. An ideal business plan should need well-defined goals of a business and strategy, a game plan, methods for attaining goals, and the time-frame required to achieve it. In addition, a proper business plan needs to cover the revenue model, capital and infrastructure requirements, and SWOT analysis of the business which we are planning.
Thanks for reading. Please comment on the below comment box, if you would like to share your thoughts about a business plan. Please free to comment about your business plan which you would like to share with new entrepreneurs.