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The Business Plan

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13 views11 pages

The Business Plan

Uploaded by

AA MM
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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THE BUSINESS PLAN

WHAT IS A BUSINESS PLAN?

• A business plan is a document that details a company's goals and


how it intends to achieve them. Business plans can be of benefit to
both startups and well-established companies. For startups, a
business plan can be essential for winning over potential lenders and
investors. Established businesses can find one useful for staying on
track and not losing sight of their goals. This article explains what
an effective business plan needs to include and how to write one.
THESE ARE SOME OF THE MOST COMMON
ELEMENTS IN MANY BUSINESS PLANS

• Executive summary: This section introduces the company and includes its mission statement
along with relevant information about the company's leadership, employees, operations, and
locations.
• Products and services: Here, the company should describe the products and services it offers or
plans to introduce. That might include details on pricing, product lifespan, and unique benefits to
the consumer. Other factors that could go into this section include production and manufacturing
processes, any relevant patents the company may have, as well as proprietary technology.
Information about research and development (R&D) can also be included here.
• A patent is the granting of a property right by a sovereign authority to an inventor. This grant
provides the inventor exclusive rights to the patented process, design, or invention for a
designated period in exchange for a comprehensive disclosure of the invention. They are a
form of incorporeal right.
• Incorporeal rights are rights to property that can't be seen or touched but are still enforceable
by law.
• Incorporeal rights pertain to intangible property such as copyrights, licenses, rights-of-way,
and easements. Incorporeal rights are also known as intangible rights, and incorporeal property
is also called intangible property.
• Proprietary technology is any combination of processes, tools, or systems of interrelated
connections that are the property of a business or individual. These combinations provide a
benefit or competitive advantage to the owners of proprietary technologies.
• Market analysis: A company needs to have a good handle on the current state of its
industry and the existing competition. This section should explain where the company fits
in, what types of customers it plans to target, and how easy or difficult it may be to take
market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep
customers, including any anticipated advertising and marketing campaigns. It should also
describe the distribution channel or channels it will use to get its products or services to
consumers.
• Financial plans and projections: Established businesses can include financial statements,
balance sheets, and other relevant financial information. New businesses can provide
financial targets and estimates for the first few years. Your plan might also include any
funding requests you're making.
2 TYPES OF BUSINESS PLANS

• Traditional business plans: These plans tend to be much longer than lean startup
plans and contain considerably more detail. As a result they require more work
on the part of the business, but they can also be more persuasive (and reassuring)
to potential investors.
• Lean startup business plans: These use an abbreviated structure that highlights
key elements. These business plans are short—as short as one page—and provide
only the most basic detail. If a company wants to use this kind of plan, it should
be prepared to provide more detail if an investor or a lender requests it.2
• A lean startup is a method used to found a new company or
introduce a new product on behalf of an existing company. The
lean startup method advocates developing products that
consumers have already demonstrated they desire so that a market
will already exist as soon as the product is launched. As opposed
to developing a product and then hoping that demand will emerge.
WHY DO BUSINESS PLANS FAIL?

• A business plan is not a surefire recipe for success. The plan may
have been unrealistic in its assumptions and projections to begin
with. Markets and the overall economy might change in ways that
couldn't have been foreseen. A competitor might introduce a
revolutionary new product or service. All of this calls for building
some flexibility into your plan, so you can pivot to a new course if
needed.
HOW OFTEN SHOULD A BUSINESS PLAN BE UPDATED?

• How frequently a business plan needs to be revised will


depend on the nature of the business. A well-established
business might want to review its plan once a year and
make changes if necessary. A new or fast-growing
business in a fiercely competitive market might want to
revise it more often, such as quarterly.
WHAT DOES A LEAN STARTUP BUSINESS PLAN INCLUDE?

• The lean startup business plan is an option when a company prefers to


give a quick explanation of its business. For example, a brand-new
company may feel that it doesn't have a lot of information to provide yet.
• Sections can include: a value proposition; the company's major activities
and advantages; resources such as staff, intellectual property, and capital;
a list of partnerships; customer segments; and revenue sources.
THE BOTTOM LINE

• A business plan can be useful to companies of all kinds.


But as a company grows and the world around it
changes, so too should its business plan. So don't think
of your business plan as carved in granite but as a living
document designed to evolve with your business.

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