Successful businesses strive on innovative ideas and many such ideas turns to a venture with a business plan. Having a good innovative idea is just one half of the story. The overall jig saw puzzle gets completed when the idea is polished and refined in detail. Business plans are essential for any new ventures. It also has an intrinsic appeal for existing business entities helping in various diversifications as well as for a development processes.
The Importance of Business Plans:
Business plans just like any other plans are to carefully evaluate detailed information and overall feasibility of the proposals. A well drafted business plan takes care of all aspects that can promote and prevent roadblocks of the proposed endeavor. Business plans not only bring a sense of focused structuring on the likely possibilities and scenarios while acting as a blue print for the company’s eventual growth mechanism. They are also very significant when it comes to raising finances through banks, partners or investors. A well drafted and detailed business plan is more likely to attract the attention of potential investors than some organization with no or poorly drafted business plans. A great business idea can be broken if the presentation is poor.
So what makes a good business plan? While there is no one size fits all mechanism when it comes to demarking the good and the bad for business plans, there are several factors that must be incorporated in detail to bring out the best possible plan on the table.
Concise Executive Business Summary:
Executive summary is the first thing that needs to be highlighted in any business plan. For most people, the business plan may judge the overall sale ability and content on the basis of the executive summary. It is imperative to have a clear and concise executive summary listing the functionalities of the business or proposed strategies and its peripheries. Executive business summary like the name suggests must take into view all aspects of business workability including finances required to be shared with potential investors.
Focus on the Business Model:
Since no two business companies think alike, it is imperative to have a clearly demarked dedicated section underlining the exact nature of the company, its core management, goals and the followed or proposed business model. This will give a complete picture in the eyes of the investors / credit officers. Business model not only includes the functionalities of the management team of the organization but should also present a clear view of the existing as well as proposed revenue models. Any business plan without effective revenue models discussed in complete detail is surely lacking in its appeal and élan.
Comprehensive SWOT Analysis:
Before moving on the more competitive analysis and market studies for the proposed business plan, a comprehensive SWOT analysis must be showcased. SWOT which stands for strengths, weaknesses, opportunities and threats is a wonderfully effective introspective tool that can bring out the demarcations within the company set up, clearly helping in decision making. It strengthens a potential weakness in order to be more effective in planning and strategizing. While threats in the SWOT analysis can include internal as well as external threats like rival organizations and other competitors, opportunities can clear any cobwebs of reaching long term as well as short term goals.
Finances and Break Even Analysis:
Most business plans are forwarded to potential investors; it is recommended to focus a great detail on the intricacies of breaking, even considering market trends and scenarios. Break even analysis must include details on how the company can fulfill its financial goals in time while making a strong case for potential investors to come on board. Although financial data is usually listed on the lower end of the spectrum of most business plans, a well drafted and detailed financial health overview is one of the most essential parts when it comes to raising capital successfully from investors and financial institutions.
Get Professional Help:
For new companies and start ups not having much experienced personal in their core management team, taking the help and services of professional business plan software programs or in-house research analysts and experienced professionals is recommended. The advantage of such paid software’s or professionals are worth.
Since no potential investor including banking, SME connections or even angel investors would give any serious thought to companies without clear business plans, having a bad and professional business plan can hurt the company big time.