How to Draft an effective Business Plan
A business plan is a formal written document that contains your prospective business goal. The business loan includes the process of how to execute these plans and the time period in which the goals have to be attained or executed. The plan consists of a list of details that helps a business to achieve certain goals that help them grow. Plans for attaining business loans should also contain the following details:
- Nature and type of the business
- Background and financial flexibility of the enterprise or business
- Budgeting details and financial plans
- All the future strategies, a business or company wants to undertake to achieve their target
- Employee details (Name, Address/Salary), along with all the information regarding goods and services to be used
- Equipment/Machinery Details to be used
- Banks often require a documented business plan to sanction business plans or other kinds of financial requirements
Components of a Business Plan
The process of making a good business plan requires the company or firm to stick to a particular structure or template used to make or draft business plans. Well written business plan includes the following:
- Cover page with the complete index
- Pitch Summary
- The motto or vision statement
- Brief description of the business
- Analysis of the business environment
- SWOT analysis
- Industry background
- Analysis of the competitors
- Market analysis
- Marketing plans
- Operational plans
- Management summary
- Financial planning
- Recent company success stories
Write a Business Plan to Start Your own Business
How to start a business plan has always been a confusing topic for many firms and organisations. Creating a perfect business plan can prove beneficial for the growth of the firm or business. Creating a business plan involves a lot of research and a detailed process that includes a lot of stages some of which overlap each other or are interrelated. It doesn’t matter if you are drafting a business plan from scratch or a predefined template or working with a business plan writer or consultant, you will find these steps along the way:
- Research: Detailed research includes digging out information about customers, competitors, and a detailed report about the working capital cost of the business. A variety of methods can be used to find the following data; the data can be extracted from a variety of methods ranging from articles and databases to even arranging interviews with other entrepreneurs or even potential customers. Research has to be organized and documented carefully with all the information gathered. The source of the information is to be documented along with the information, as the source has to be mentioned within the business plan
- Strategizing: The information that has been collected has to be used relevantly to support your business plan. Revise the business strategy you planned according to the information gathered. Your research has to be in-depth and precise so that your strategy can provide support to your decision on appropriate marketing, operations of the business, or the firm. The rate at which the company shall hire for five years has to be mentioned. The strategy usually pulls the best out of the practices present in the current marketing scenario. The companies use this as a base to build a plan in which different activities are added that gives the business a competitive advantage
- Calculation: All the activities and improvements come at a cost and will generate some revenue from the strategy. The strategy has to be made with the cost of execution and the profits in the long. The strategy has to be on the basis that the profit would cover the expenses. Start inserting your start-up cost and financial assumptions into a financial model which will provide you with an overview of the flow of cash in the first financial year, this will give an estimate of the funds the business will need on hand to fund the early operations
- Draft: With the strategy more or less decided and an estimate provided it is time to draft a business plan. With all the research and the calculations done properly the drafting work is the easiest in the creation of a business plan. If there is a problem in putting forward convincing prose then this might be the right time to consult or seek the help of a business plan writer who can put together the business plan
- Revision and proofreading: Revising the entire business plan will ensure that you haven’t missed any idea or strategy that was to be added while drafting the business plan. Check whether the words in the business plans do not lead to any confusion. Repetitive, irrelevant, or redundant points should be removed or substituted with better ideas that suit the points in the business plan. Finally go through the business plan to find grammatical errors, spelling mistakes, and formatting
Types of Business Plans
There are two types of business plans as mentioned below:
1. Internally focused business plan
It is a business plan which focuses on internally focused business targets, and intermediate goals which help an organization reach its externally focused business plans. An internally focused business plan may contain details like a new service that has been added to the business, a line of new products that the company is going to launch, the restructures in the financial matters of the company, setting up of a new IT system or even the restructuring or renovation of the business or the company. It usually contains a list of recent successes the company has achieved.
2. Externally focused business plan
Externally focused business plans which contain detailed information about the organisation or the company or the efforts made by a team to reach their goals. It also contains the various lists of profit entities, it includes a list of external stakeholders which include investors and customers of the company.
There are different types of externally focused business plans which have different stakeholders, investors, and customers. The various types of an externally focused business plans are as follows:
- Non-profit based: the external stakeholders are clients and donors
- Profit-based: external stakeholders are investors and customers
- Government agencies: external stakeholders are the higher-level government bodies, taxpayers, or international lending bodies. The international lending bodies include international monetary funds, the World Bank, and development banks.
An Example of a Business Plan for a Poultry Farm:
A poultry farm business plan includes
1. Industry Overview – First, write down an overview of the poultry industry and the niche market you are interested in.
Since you may show the plan to potential investors, mention some updated statistics of your niche. Paint a nice and positive picture for the investors here.
2. Executive Summary – Tell the location of your poultry business farm and that you have done detailed market research. State the main points of your research.
You can also say that your farm will involve raising, processing, and marketing chickens and eggs. Then, talk about some industry standards that your farm will comply with.
3. Products – Mention the products your poultry farm business will deliver. For instance, you can say that you will raise, process, and market chickens and eggs to sell.
Talk about the white and brown eggs, hatching eggs, speciality eggs, and table eggs that will produce and supply.
4. Mission and Vision Statement – Write down your mission of the poultry farm business in no uncertain terms. State your vision clear for the investors.
5. Jobs You Will Create – Give an overview of the employment opportunities your poultry farm business will offer the people.
It shows your concern for society as you are generating new jobs. Tell how many people your small business can employ in the coming days.
6. Target Market – Although everyone consumes poultry products, you should still be targeting a certain demographic. Your poultry farm business at its initial stage can not cover the entire population.
So, mention which set of people your business will entice. Will you be supplying poultry products to households or individuals? Do you want to target hotels, restaurants, or fast-food eateries?
7. Pricing Strategy – Pricing is among the most critical aspects of successfully running a poultry farm business. Your plan should clearly state the competitive price you will set for different poultry products.
That will involve a bit of research about a general view of pricing in the market. Then, tell what your profitable pricing in the market is.
So, keep these vital points in mind while making your business plan that will work well also for investors.
Financial and Business expert having 30+ Years of vast experience in running successful businesses and managing finance.