Most young entrepreneurs will have great ideas. But when it comes to the question of How to create a business plan, most of them go blank. An idea will work out only when it is converted into an actionable plan. In entrepreneurship, having a clear business plan will help the entrepreneur pitch their business to potential investors. Venture capitalists, and investors, will have the confidence to invest their money depending upon the idea, how the plan is etched out, and the clarity in risk handling and mitigation. A clear business plan will help the entrepreneur have a stable start. Further, while the company/start-up moves into the next consecutive years, the growth can be analysed meticulously. In the subsequent years, the company will grow in a sustainable manner without any confusion.
Why do you need a business plan:
a. Business plans are structured maps to drive your business ahead.
b. They help you provide a direction to your idea and how to grow it.
c. A written business plan will help you get the attention of potential investors and gain their confidence to invest more in your idea.
d. Banks and loaning institutions will have a solid base considering which they can release the funding.
e. Sketching out a clear business plan will help entrepreneurs to understand where there are gaps in resources.
f. The entrepreneur will plan to fall back and re-iterate where the hiccup or issue happened.
As an entrepreneur, you may have various ideas for starting a business. The first step in creating a perfect business plan is to stick to one idea. As Jane Hamill once said,
“Multiple creative ideas can be the kiss of death for an entrepreneur. It’s time to choose.”
Choose one idea and create a business plan. Let us delve into how to create a business plan effectively.
Steps for creating a business plan
1. Write an executive summary.
An executive summary is an overview of what your business is about. It provides all the critical details, making it easy for the investors to get an insight into what you’ve achieved to date. Mostly the executive summary will be one page only. In simple words, the executive summary is like an abstract of a 2000-word essay.
2. Describe Your Company — Its Business, Goals and Objectives
The next step is to open the 2000-word essay. Concisely write down what your business is about, its inspiration, the objective of why this product or service is in the industry as a business, which problem it solves, and the short-term and long-term goals. Remember, if you are meeting a VC or investor, add something that brings value to them if they invest.
3. Describe your products and services
A business should have a product or a service in exchange for money. So, explain your products/services, their features, their advantages, and your target audience. Explain the scope of development of the products/services that show your potential investors/bank to get an insight into your long-term planning.
4. Analyse Your Market and Determine Your Marketing Strategy
As an entrepreneur, you have explained your business and the products. The next step is one of the crucial steps, place your business in the market. An in-depth analysis of the market, your competitors, and your peers are very important. It will help you devise a clear marketing strategy. Always have a plan A, B or how much ever backups as a marketing strategy. Never depend upon one channel for your marketing needs.
5. Describe Your Management Organisation
Preparing an executive summary, defining your business goals, detailing your products, positioning your company in the market, and determining the marketing strategies that come under external business plans. The internal business plan describes your management organisation, business financials, and team structure.
Describe how your organisation tree will grow as a first step in creating an internal business plan. Elucidate the major points of growth and work distribution. The employees’ duties and responsibilities must be sketched.
6. Compile your business financials
Financials- Another vital aspect of your business plan. Business financials denotes the inflow and outflow of money. The start-up’s current resources and how the new incoming fund will be utilised. In short, budgeting for your business and the usage of the monetary resources are the business financials.
7. Consult a business consultant
Although, as an entrepreneur, one person can effectively do all the above-mentioned works, it is vital for them to consult a business consultant. Business consultants are a group of experienced business leaders who can mentor young entrepreneurs for the effective growth of the business.
Wadhwani group, one of the best growth incubators for new businesses, holds regular workshops and programs for the entrepreneur’s benefit. The Foundation helps new-generation entrepreneurs to help have a hold in the business field with automated diagnostic tools, providing training to pitch their ideas to VC and investors and help them gain sustainable growth. To learn more about our growth incubator programs, click here.
(For those in later years of the graduate program/ PG students/ working professionals/ pre-incubatees having a validated idea to launch a venture)