What is a business plan? I heard some lady asking that question in a bank one day. A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals, she was told. But I have been operating my business for the last eight years without one, and my business has been doing well, she replied back. But even in her argument she was convinced as to why she needed a business plan for business to grow to greater heights, especially since she need her bankers to finance her growing business. Many people today go into business without a business plan, and as much they might want to say that the business is doing good, the truth of the matter is that they have no idea as to where they started or where they are going without the guidance of a business plan. A Business Plan is the foundation, or rather a springboard, towards the establishment and growth of a new business, particularly in the later stages of growth. A business plan is an essential tool for companies raising capital - and your business plan needs to be “investor ready”. The business plan document should be professionally prepared to meet the needs of the Venture Capitalists. In your business plan, you should be able to see your own project through the investor’s eye. Your plan must be able to answer all the concerns of a potential contributor. An investor ready business plan demonstrates to the potential investor that you are an expert in your industry and that you have a clear mission. An entrepreneur addresses these needs by preparing a comprehensive and detailed view of his/hers business objectives and goals. Some important sections that address different concerns of the investors are below: Management Investors are mainly concerned with good management - not just ideas. It is very important that you express your knowledge, passion and dedication to your business as best as you can. The competence of your team along with their experience levels and commitment levels are also factors that investors research before making their investment decisions. CustomersIt is important to communicate to the investors that you understand the needs and requirements of your customers and to make your marketing strategy crystal clear within your business plan. Product/Service DescriptionA complete description of the product and/or the services offered by you should be outlined in detail. It is essential to include a description of the overall market for your product and/or service along with details of your customer base. The investors need to know the reach and the kind of customers your product/service is catering to. Marketing PlanA marketing plan will outline your sustainable competitive advantage to your investors. In this section you should include a definitive description of your customers, market size, characteristics, growth prospects, trends and sales potential per product/service category. This is where the pricing strategies are outlined and how they can directly influence the growth potential of each product/service. It is also crucial to include the future growth, market share and trend influences. With business failing at an alarming rate the need has never been greater to start off on the right foot with a clear understanding of exactly what you hope to achieve and how you will do it. A well thought out and carefully structured business plan is the key to the long-term success of any business. Whether you are just starting a business, buying one already established or perhaps in need of extra finance for expansion you will need a business plan. Ends
