These two words would have resounded around you many a times. For any business emerging or large, business planning is one activity, which keeps going on throughout the life of the business. Various stakeholders are involved, at multiple stages of the business planning which ultimately influences the business and how it functions.
Lets start from the scratch
An entrepreneur may have multiple reasons supporting his idea and hence the related business plan, which will have everything from the proposed working plan, the resources required, the funds required, the scaling up plan, the projected revenues and many other things.
From idea to reality
* That thing which does not have a physical reality does not exist in business
Your idea is just another one of the many passing thoughts which you might get during the usual course of your life. Putting it down in black and white will only help making it exist for you, which also further enables the entrepreneur to refine the same.
The journey from being a mere idea in one’s head to paper is not an easy one, as it forces the entrepreneur to think with clarity, logic & see the opportunity in its totality.
* Remember your Bplan is not a fund raising document
Many entrepreneurs may think that writing a Bplan is really for the investor, who will be their guardian angel and come and invest. Well, this notion is wrong and hence Bplan must really be used by the entrepreneur to bring more clarity and explore all possible permutations and combinations, ensuring that the business plan is a strongly thought of and well laid out document.
Is there a standard template to write a Bplan in?
Not really! There are a few core aspects of a strong Bplan, but there is no standard template as such. Overtime, though with experience, some formats have emerged which are the resultant of the vast experience of successful entrepreneurs, who have raised businesses.
I have a million dollar Idea to change the world, how do I raise money now?
Investors invest in a business and not in an idea. Any investor would want to see how prepared are you as an entrepreneur, how strong a domain expertise do you have upon which you are proposing a business. A business is something which is aimed at solving challenges which results in value creation along the way.
And before you proceed ahead, lets answer these questions for ourselves:
* Why hasn’t the problem above been solved before?
* What makes you and your team experts at solving the problem?
* Why can’t other companies solve the problem?
* Barrier to Entry: Why can’t a company with $100M in capital solve the problem better than you?
While creating your business plan, the basic out-liners you must keep in mind are:
* What is the space
* Not telecom / entertainment
* Who are the market leaders
* Their size
* The opportunity
* Market potential from external sources
* Keep it very brief
* What is your product / service
* Are you re-inventing the wheel?
* How does it fit in the landscape
* Why is your product / service necessary
* What pain points is it addressing
* Is it enhancing an existing value proposition?
* Is the process bettering an existing business proces?
* Are you trying to do something different or differently?
* Is it a need or can it still be worked out?
* Eg: a wallet which essentially is used for keeping money, could be a simple wallet, or a designer case
* You must identify your actual customer, the one who actually gets affected by your proposition
* Are you looking at creating a new customer base OR enhancing an existing customer base
* Are you directly targeting the end customer/ consumer OR is there a delivery mechanism/ chain in between
* Does your customer already know of the product OR would you have to educate your target segment for the same?
* What are the parameters of your customer?
* Urban / rural
* Who is your competition?
* Product / service
* Company/ Agency
* A comparative business process (eg: manufacturing)
* Size up your competition
* SWOT of competition
* Lessons learnt from competition
* Business scaling up Trends in competitive companies
* Business Investment Trends
* Human Resources
* Business Scaling up
* What are your differentials
* What is the USP of your proposition
* How long is the Product life cycle
* Your Go To Market strategy
* Cost differential across various market segments
Business and Delivery: Execution is the Key:
For any Small and Emerging business, execution is the key. You must have clearly defined internal processes to back a strong delivery mechanism. Execution must be ensured, backed with a strong delivery model.
Many a times small companies fall into this catch of getting more and more business, while in the thought of keeping the costs low, they take more work than their delivery teams could take up successfully. Your delivery model must look at the following pointers:
* How will you deliver
* Technology leveraged
* Outsourced Alliances
* Pre Sales process
* Execution mechanism
* After Sales Strategy
About your team
Your Bplan must definitely have a strong mention of your team which is behind the venture, with their backgrounds, experiences, Job Roles, board of advisors, their equity structure, team scale up plans.
* Current / Projected for next 3 years
* Topline / bottom line
* When will it break even
* Profitable businesses are more attractive
* Self investment & funding received till date
* Skin in the game
* Investment sought
* For what
* Where will it take your venture
* Next round requirement
* Cash flow based workings
* No debt retirement
* Valuation expectation
RISKS and MITIGATION actually present
Your risk mitigation strategy should be in place even before you present the plan.