Today, 30% of new businesses get shut down within the first year of their opening. Why is that? Why are people unable to understand their customer base and are they not able to bring more customers into the store? All of this stems from the lack of a robust business plan. A business plan is essential for business owners, entrepreneurs and even business school students. But, what is it? In this blog, we will answer this question and also tell you the benefits of business plans.
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What is a Business Plan?
A business plan is a documented strategy of a business which highlights its goals, plans and limitations. It outlines a company’s plans, financial projections, market research and much more. The main motive of a business plan is to evaluate all the resources and plan how to use them in a way that will be the most beneficial for the business. The purpose of a business plan is to summarise the strategy of the business, financial support from investors and plan the future of the company or business. You can always use a business plan template to have a good start.
Benefits Of A Good Business Plan
There are many benefits of a robust business plan and some of them are as follows:
1. Helps You In Securing Finances From Investors
A business plan includes all the things that need to be considered while starting a new business so it helps investors to evaluate your business and see if it will even succeed or not.
This is why a good business strategy is important for securing finances from investors. An investor will only put their money if they find your business plan plausible.
2. Helps You Better Understand Your Strategies And Goals
In a business plan, you are supposed to evaluate your business, finances, strategies and goals without any other influence. If you evaluate your business properly, there is little to no chance that you will do something that is not good for your business. Evaluating your business plan will let you know your strengths and limitations and then you can achieve your goals using strategies that you made while keeping in mind your advantages and limitations. You should focus on strategies to efficiently run your business so that your business always remains cost-effective.
3. Helps You Legitimise A Business Idea
Everybody has a great idea for a company or a business but not everyone can build that idea into a reality and this is where a good business plan benefits you. A good business plan is your way of knowing that your business idea is worth pursuing. A business idea is the only way through which you can prove to yourself and the people that your business idea is legitimate and will make money once started. You can never get a wrong estimate from a business plan if you evaluate your assets without any bias or influence.
Tips For Making A Robust Business Plan
To have a good business plan there are a few things that it needs to have to be effective. Some of those things are:
1. Business Plan Subtitle
Every business plan should have a captivating title and subtitle. The title gives an overall view of what your business is while the subtitle tells a little bit more about the business strategies and goals as well as about the business plan.
2. Executive summary
An executive summary is the last thing that you’ll put on your business plan but it’s perhaps the most important part as this is the only part any investor will read. This will help the investor to get an overview of your business, its vision, value proposition and your goals for the future. So you must put extra emphasis on this part of the business plan as it can be a break or make moment.
3. Company Description
This is the part where you will write about your company and what it represents. This part of your business plan will mention your business name, years active, positioning statements and key offerings. You can also add what your company aspires to achieve. This is a way for you to put your company in front of readers positively and concisely.
4. Target Market
This is another part of your business plan that is very important because the most important thing in any business is customers or the market. If you don’t know what market to target then it’s more likely that your business will not succeed. This is why it’s important to mention the target market in your business plan to earn some investment from investors.
5. Marketing Plan
Another important and sometimes overlooked aspect of a business is marketing the marketing plan. It simply means if your marketing is not good then no matter how good your product is, it will not sell. So mentioning your marketing strategy is a must. This is how investors will know how you plan to market the company and based on that, they will decide if they should invest in your venture.
A good business plan is perhaps the most important thing to consider when starting a new business. In this article, we gave you the information that will help you make a good business plan to attract investors and give your business a chance to survive in this growing ecosystem of start-ups.