A Business Plan - MBA&Co

A business plan helps in identifying exactly what a company would do to sustain and remain profitable. This plan is a formal statement that defines business goals, these goals are defined and a plan is made to execute them. The plan defines the organisation and the team of individuals who are executing these goals. The marketing plan, financing plan are two key areas of a business plan. Sections of a Business Plan The b-plan has several sections which explain how the organisation or company would perform. The mission statement is the long-term mission, this directs the growth of the company, it is a brief statement that helps in defining long term actions. The vision statement helps in guiding the team to achieve the companies mission. The team consists of the management, their previous accomplishments and number of years of experience in their respective fields. Market Summary Market summary is the summary of the target market in the past, present and in the future. Changes in the market share, leadership players, market shifts, costs, pricing or competition that helps in identifying the company’s area of success. Opportunities and threat identification is a must, consumer problems must be states, the nature of the product or service needs to be defined so that the problems could be identified. Business concept explains the key technologies that are going to be used or the concept of the business. Competition is another important area, the competition is summarised in this area and the company’s competitive advantage is defined. Goals and Objectives Goals and objectives need to be clearly defined, goals must be long term in nature, 5 year goals are ideal, measurable objectives must be specified so that the changes can be observed market share and revenue objectives are two goals that need to be defined clearly. Financial Plan Financial Plan defines financial model and pricing assumptions of the both the product/ service and the infrastructure costs. Annual sales and profits of three years need to be defined, details must be provided so that an investor knows the risk involved in investing in a company. A company needs to explain the list of resources that they are going to use to function daily. Personnel, Products and Services Personnel are people who are hired to help build a relationship between the management and the employees. Technology could be in terms of machines or computers that are required to run the business. Financial aspects such as the money that is going to be spent on these resources and remuneration plan for employees. Distribution channels for products or services, both internal and external distribution. Promotion is the method through which they are going to market the product or service. This could be done through marketing using several forms of media. Products, the commodities the company is going to manufacture; the costs incurred in making them, the distribution channels and the description of the product. The description of the product consists of physical attributes and is also defined by the marketing strategy; it could be a fast moving consumer good or it could be luxury product. This needs to be defined clearly. Risks and Rewards Risks and rewards must be explained, a summary of the risks of the proposed project and the solution to reduce the risks. Estimated rewards must be explained, if funding sources are being utilised. Key issues need to be identified, both long term and near term issues. Solutions must be provided for these issues. A business plan needs to be carefully thought about it takes time and the company needs to clearly defines all these aspects, it usually takes months to identify these areas and explain them. While presenting a business plan to an investor the company needs to highlight the important areas, which makes the plan standout. The competitive advantage and the risks must be explained very clearly as investments are capital intensive in nature.