How to Make a Effective Business Plan

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Every prospective entrepreneur or businessman, who has an innovative idea, is often perplexed because he's not able to come up with a feasible business plan. As a matter of fact, they keep on procrastinating, researching and thinking but only thing they are not able to do is initiating the shipment of the products. If you go and search the internet, you end up with a lot of websites on the first page of the search engine results that provide confusing information about how to make an effective business plan. Not only is this information full of management jargon, but it is also not meant for the small businesses and startups. Of course, they will throw an unlimited amount of data full of charts and text, but it is hardly of any use for the startups and is very confusing.

In fact, we do not need the research papers on business plan meant for management education. What we need is a practical and feasible business plan which anybody of us can execute and implement for his business. And that is probably the reason, that search engines cannot guide you in this matter. The present article is meant for the entrepreneurs and businessmen who need practical advice and the basics to make a feasible business plan.

What is a Business Plan?

A business plan is a road map for your forthcoming business venture to eliminate the chances of failure and increase the profits, value imparted through your business and reduce the risks and costs involved.

How is a business plan helpful in business?

It’s believed that 95% start ups don’t succeed as a business and everybody knows that the market is full of risks and uncertainties. A business plan is a blueprint, which takes into account all the predictable and unforeseen risks and opportunities available in the market to make your business venture succeed and reap profits.

The Practical Business Plan for Your Startup

What should a business plan cover?

To get you going, we'll explain the basics of a business plan.

A practical business plan should contain the following considerations:

A.Information about your products or services
B.Your target customers
C.The timeline of your business plan
D.The details of the infrastructure and investment
E.The financial part (venture capital)
F.Projection of the expected trend of your future bills (expenditure)
G.Projection of the pattern and timeline of payments to be received (revenue generated)
H.Explanation through charts, tables and graphs

Now, let's discuss these points in some details.

Define Your Products Or Services

It is very important to know who your customers are and why would they pay you in the first place? You also have to define what kind of value your products or services are going to impart. So, it is very important to know why your customers should keep you in business. For example, if you are providing a service, you should offer some value by opening your outlet at a place, which is easily visible, accessible and approachable. You should also hire the employees to assist your customers, so that your customers don't have to wait or form a queue. You have to maintain quality without overcharging your customers.

In case, you are a reseller, you should provide value by showcasing your products and educating the customers about the features and specifications of your products.

Define Your Target Customers

You have to list down all your prospective customers. Where they come from and what services they are looking for? It is also imperative to know your competition in the area. After you identify your target customers, you have to design a suitable marketing strategy to tap your customers.

Estimate the Size of the Market

It is very important to know the size of the market you're operating in. For that, you have to continuously work towards increasing your visibility. You have to know your competitors to now your potential customers. You also have to work hard towards reaching your potential customers.

Project the Future Trend of Your Business

You have to brainstorm the future trends of your business. It will not only keep you up to date but also ready to implement the changes needed, accordingly. You also have to have a rough idea of your revenue streams on a timeline with respect to the expenditure you have to incur. It will prevent you from any unnecessary expenditure.

How to make it even more effective?

You can cite case studies of successful business ventures as a proof of the feasibility of your business plan. You can also provide comprehensive information about your financial strength, assets, previous experience or professional qualification if any and details of your financiers and venture capitalists.

Things to remember before presenting a business plan

There are a couple things that you should remember before presenting a business plan, even though you consider it to be extremely viable.

1. Use good quality paper
2. Edit your plan for grammatical, spelling, and punctuation errors
3. Make sure your business plan reflects confidence
4. It should be written in a style, which is authoritative, formal, crisp, and clear
5. The use of jargon should be avoided
6. Make sure it’s not made in haste and doesn’t reflect sloppiness by inadequate information or absence of labels etc.
7. It should be neither too vague nor too detailed

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Last Updated on 08/31/2012