Formulate a Solid Business Plan
A business starts with the sheer motivation of the founders. The passions and the desire of the founders create the basis on which a business stands. But, for the continuous growth and progression of the company, it is crucial to have a clear and structured set of goals, objectives, and standards to follow, also known as a Business Plan.
This well-structured document is an important tool used by the top management to maintain focus and vision. It ensures that the company is performing up to the mark and stays atop the standards of the industry.
1. Purpose and Direction
A business plan is used to define what progress means, for the company and all the employees. During the process of constructing this document the management should focus on the following:
- Target audience,
- Startup Capital,
- Running Capital,
- Cost of Raw Materials,
- Cost of Labour,
- Fixed Costs,
- Profit margin
- Final Price
- Marketing budget, and
There are many other factors and risks are also involved that need to be assessed at the time of making a business plan.
The importance of a business plan is not only for a large business. It is just as important for a small business as it is for a large business. It helps in sending out a vital message to the prospective investors, about the vision of the business.
Why the company came into being? And where it wants to be in the next 10 or 20 years? The vision describes the intention of a company. What it wants to achieve!
A well-formulated Vision of the company gathers positive attention from the stakeholders. For this purpose, conduct extensive market research and find out about:
- Potential customers,
- Your competitors,
- Goals to satisfy customer needs,
- Your goals to differentiate from the competition, and
- management style.
Yes, the management style is also a vital part of this document. While all other resources can be replicated, personnel (human capital) is a resource that cannot be replicated.
3. Manage the Cash-Flow
A good business plan must also focus on effective cash-flow management. It is implicit that having a good Business plan means that the company also has its financial strategy well-established. Therefore, using the revenues and cost estimations of the future, it is vital to construct a Cash-flow analysis.
The Cash-flow analysis shows the liquidity of the company. A Company can remain profitable while still struggling with cash receipts & payments. Therefore, effective management of cash ensures that the business does not have to go into forced liquidation due to a shortage of cash.
Adds Value To Your Business
Finally, we will discuss the benefits of creating a business plan. A few are discussed below:
- Find your “X-Factor”,
- Identifying your target market,
- Identification of your competitive advantage,
- Setting KPIs and allows the business to analyze performance,
- Creating clear guidelines for each level of management,
- Showing Financial Performance to prospective investors,
- Adds value by allowing management to re-evaluate its business plan and make necessary changes to the original plan if some major factors change.
Hence, this document is not simply a guide, it is the foundation of a project.
Free Business Plan Template Download
This free Template would help you to create your business plan section-wise. You need to fill in the key questions in each section. If you simply want to start in the right direction, then this free template is the best fit for you.
We do offer a customized investor-ready Business plan. If you require our service to craft your business plan, feel free to contact us at our website: www.oakbusinessconsultant.com and visit the page Investor Related Document and our Services.