Recently I got a chance to interact with management students at Amity , Jaipur campus about preparing a business plan . With of buzz of ” Make in India” , our youngsters are being increasingly aware about different start up ventures, potential of entrepreneurship over waiting for job, getting limited scope in selecting dream job, competition due to population. It is positive and promising sign to see our youth getting directed towards start up ventures .
With technology at our doorstep, high-speed connectivity, lots of domestic and international e-portals assisting wholesale and retail industry, it is the most promising time for Indian youth to consider their own venture , start their own brand and actually execute on that properly prepared detailed business plan. Be it venture capital or own investment, executing on detailed business plan can give our youth a fantastic start of career.
Essential aspects of Business Plan :
Here are some important points to be attended, thought and carefully drafted while writing a business plan :
1. Clear, Communicable Vision
It is very important to write the vision of a business plan in detail. You may start small , at local level but a bigger , all encompassing vision has to be set and written before you start. Vision of business has to be in written form . It has to be clear and communicable form. Vision guides the entrepreneur from time to time and it protects from deviating the main theme out of any short term temporary pressures.
2. Marketable Creative/ Innovative Idea
The idea of product or service has to be creative, innovative at the same time marketable. Any innovation or creativity if can not be marketed , it is useless for an entrepreneur. Many a times , new innovation, or a art / literature product is novel but market is not ready for it. It is in premature stage. So, when you write your detailed business plan, the idea should meet the basic criterion of marketability.
3. Profit Potential in Short Period
It is important to realize profits in comparatively shorter period of time. An entrepreneur as well as venture capitalist will always get the due motivation and enthusiasm to run business , put more funds in growth of business only when it starts giving return in short term. So calculation and presentations of profits in short period of time is always a lucrative preposition for any business plan.
4. Target Market
It is very important for any startup to clearly define the target market. It helps in deciding the further communication and marketing strategy as well as distribution plan. Knowing demographics, education, taste and preferences of target market are instrumental for any business venture. Purchasing power of target market is equally important parameter of success of selling price strategy for new venture.
5. Competitive Edge
There is always existing competition or potential competition in market for any new venture. Any new idea has to fight with potential competitive strategy whereas existing product or service start up needs to come up with concise competitive strategy. How product strategy show competitive edge and USP makes the plan strong and superior.
6. Concise Marketing Strategy for Market Entry
A well defined and detailed marketing strategy gives high points to any business plan. In today’s era of internet and social media marketing, it is important to have comprehensive marketing strategy where customers can be reached from all sides. Also the marketing budget holds big consideration in total cost- benefit analysis.
7. Skills of Employees Required
ANy business plan needs to throw light on the kind of manpower needed to run the business unit. It varies from unskilled and untrained staff to skilled, educated and professional manpower. Skilled manpower definitely gets higher points in eye of any venture capitalist than unskilled and untrained staff.
8. Complexity of Business Idea
Business idea should not be overly complex. It has to be simple, easy to understand, easy to educate and easy to market. The simpler idea is always good to execute.
9. Personal Investment
It always count that at what extend entrepreneur invest his own money or personal assets in the business. It largely decides his own interest , belief in the profitability and vision of the venture. Any venture capitalist would appreciate and give high rank to business plan where entrepreneur puts his own capital for business set up. Total dependence on borrowed capital show his own dis interest as well as low risk taking capability.
10. Delivering Customer Value for long term
Any business idea should ensure the long lasting value for target customer. Short term, shallow value , easily expiring product value does not get attention from investor. While writing a detailed business plan, it is necessary to explain the value it delivers to end consumer and how long a customer will benefit using the product or service.
11. Operational Feasibility
Sometimes new venture is designed with big plans and big wishlists with less operational feasibility. It is very important to show the workable strategy to start and run the new venture. The smoothness to carry all operations, practical difficulties need to be ascertained and put forward in any detailed business plan.
12. Realistic Financial Projections
The Cost – Benefit analysis, revenue projection, break-even-point calculations, time period to achieve break-even-point , etc all financial projections need be done on realistic assumptions. It is very important to have realistic and little less than optimistic view point here to reach the desired result. It can give fair idea on desired productivity and cost control scenario to reach break even as early as possible .
Covering this points give a realistic view of how your venture will look like. Though I believe that an entrepreneur should always take in to account pessimistic outlook as well as optimistic outlook for a business idea. Apart from realistic projections, the key defining factor for success of any business venture is focused vision, passionate persuasion, risk taking capability, leadership qualities, productivity of entrepreneur combined with execution of business plan with integrity.
Wishing our young entrepreneurs all the luck,