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A business plan often highlights various aspects of the business including the type of business, the nature of the business and strategies it will adopt in the future.
A business plan can be defined as a formal business document that contains business goals and methods to achieve those targets. Further, these plans often highlight various aspects of the business including the type of business, the nature of the business and strategies it will adopt in the future. These business plans are often crucial for a firm particularly when it comes to obtaining credit or loan from a lender.
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The biggest merit of having such a plan is that it enables investors to get a detailed picture of merits and demerits to certain business decisions. It also gives them an idea of the cost particularly the financial cost needed to continue the operations of the firm.
While thorough research is needed to understand the company. It is also essential to know the purpose behind the plans. It could vary from creating a future roadmap to attracting investment in the future. Business plans allow a company to lay out its goals and attract investment. They also work as a self-assessment mechanism that allows keeping the company on track.
Here is how a proper business plan could be created
Do proper research: For a perfect business plan, one should have complete and detailed knowledge of the company, its product, its market, its competitors etc.
Creating a company profile: One essential part of the plan is the creation of a perfect company profile. This will include the history, the outputs, the resources, the future road map for the organisation among others.
Document all aspects of your business: Prospective Investors want to make sure that they get profit in return for the investment they make in a firm. To help with this process, thorough documentation of everything including expenses, cash flow and industry projections among others should be included in the list.
Presence of a strategic marketing plan: Describe how the company will attract and keep its customer base and how it also aims to extend its base. Further, a good business plan should include an executive summary, products and services, financial planning, marketing strategy and analysis, financial planning, and a budget.
Classification of Business plan
Business plans can be classified mainly into two- traditional business plan and lean startup business plan.
Traditional business plan: This is the most commonly used form of the business plan. They are the much more conventional and standard method of writing a business plan. They are thorough long and detailed giving information about every aspect of the firm’s operations.
Lean startup business plan: This type of business plans are very few in numbers compared to the traditional style. In this method, the plan is written down in a short format. The length of the plan will not be not more than a single page and will be unlikely to provide thorough details and information about the firm.