What Is A Business Plan?

Business Plan
A business plan is an important aspect of the startup process and should be crafted
carefully before preparing your pitch deck and putting yourself in front of the investors.
In this article, we’ll explore –
 What is a business plan?
 Why do you need a business plan?
 Components of Business Plan
What Is A Business Plan?
A business plan is a guide which outlines the goals of the business and roadmap of how
to achieve them. It is the written description of your business’s future.
While many first-time entrepreneurs consider a business plan to be similar to what a

preamble is to a constitution, but there’s a big difference. A business plan isn’t just an
introduction of what the business is about. It is a written document explaining what the
business will be after a certain period of time.
Simply stated, a business plan is a guide that conveys your business goals (both long-
term and short-term), the business strategies you’ll use to achieve them, the problems
and competition that you’ll face and the ways to solve and overcome them, the people
you’ll involve in your business, the organisational structure, the marketing and the
positioning strategies, and the amount of funds you’ll require for the same.
Importance of Business Plan
You need a business plan if you run a business. There are no exceptions to the type or
an age of the business and unlike what many people say, business plans are not limited
to startups. Even if you’re running a 20 years old business, it’s not late to write a
business plan and dedicate your resources to your ultimate business goal.
That being said, a business plan is almost a necessity for startups as it helps
entrepreneurs break the uncertainty into meaningful pieces and projections. It helps
them to present their vision in a language investors and the world understand – which
includes sales forecasts, marketing strategies, competitive strategies, milestones,
expense budget, partners and employees, and the short-term and long-term goals.
The business plan is an important guide which forces you into discipline thinking. It
gives you a direction to move to and explains to the world what you are here for. Here
are the four reasons why a business plan is important for your startup:
Direction & Future Vision
A business plan defines what the business intends to be over time. It includes a detailed
description of the customer, the market, and the competition, and gives direction to all
the current and future strategies and steps.
Funding
Almost all of the prospective investors and banks require the entrepreneurs to prepare a
business plan for their startups. The stats, facts, and figures in the business plan make
it easy for them to decide whether the team and their business have the potential to
earn a profit in the long run or not.
Management
With a vision set for the future, it becomes easy to manage ideas and people to achieve
what’s desired.
Partnerships & Alliances
A business plan helps in a smooth execution of the planned business model as it helps
to get in the desired partners by explaining their clear roles and the future vision to
them.
Components of a Business Plan
The business plan should be clear and concise. A person outside of your industry
should be able to understand it. It should contain all the key information about your
startup from what your product is about to how much money you require to build it. Here
are the 11 key elements that should be included in every business plan:
Executive Summary – This is a brief overview of the entire business plan. This section
of the business plan decides whether the stakeholders or investors will continue reading
the plan or not. It includes a brief overview of the business idea, the offering, business
goals, target market, competition,USP, the team and the financial outlook for the
business.
Company Description & Synopsis – This section of the business plan explains the
company’s mission, philosophy, goals, industry, legal structure, and USP briefly but is
more elaborate than the executive summary. The details are followed by the problem
the company is solving for the customers and the solution which makes it stand out of
the competition.
Market Overview – This section explains the current market scenario of the industry –
the size of the market, market trends, success stories, what is working and what isn’t,
and what is being favoured and expected by the customers in the market. This section
gives the readers a reason to believe why the company chose the market stated.
Usually, everything in this section is supplemented with a bundle of facts, stats, and
figures to prove that the entrepreneurs have done their research before choosing this as
an apt market for their offering.
Customer Analysis – The customer analysis sections include the persona of the
(prospective) customer, which includes his/her demographics, geographic,
psychographics, needs, wants, desires, buying habits, etc.
Product/Service Overview – This is a section dedicated to the offering the company is
(or will be) providing to the customers. It answers all the what, why,
where, and when questions related to the product and reiterates the previous stance of
why it is the perfect solution for the problem stated.
Business Model – The business model is the conceptual structure that explains how the
company works or will work. This section will answer the question of how it will provide
the offering in the market and why is the offering viable. If the company were Uber, this
section would include how it would partner with cab drivers and how would its business
structure be viable for both the taxi drivers and your business.
Revenue Model – The revenue model explains how the company is planning to earn
money using the business structure explained in the business model section. It explains
the intricacies of the expenses and revenue sources of the company.
Competitive Analysis – This section is dedicated to explaining who are the competitors,
what are their USPs, and what are the strategies used by the business to tackle them.
Marketing Plan – The marketing plan acts as an inference of all the details explained
earlier. This section provides the details on how the company plans to use the
information mentioned above in formulating and executing their marketing strategies.
The marketing plan is an important section of the business plan as it explains how the
company is planning to reach out to the customers and stand out of the competitors.
That being said, the marketing plan isn’t limited to the promotion of the offering. It
includes a holistic strategy to market the offering right from production to post-sales.
Management Team – This section gives the information of all the members on board,
their qualifications, experience, and their posts in the company.
Funding & Financials – Funding and financials form the conclusion, but it is the most
important section of the business plan for startups as it states the cost of the execution
of the business plan. It includes all the short-term and long-term financial requirements
and funding goals and how the investors can help the company achieve them.

What Is A Business Plan?

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Business Plan

What Is A Business Plan?

While many first-time entrepreneurs consider a business plan to be similar to what a

Importance of Business Plan

Direction & Future Vision

Components of a Business Plan

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