Why You Need a Business Plan

Why You Need a Business Plan

Just to clarify to all the aspiring Entrepreneurs, not as it may sound, a Business Plan is not essentially a document which would tell you how to proceed with executing your great idea, or just help you get the funding you are looking for. If your b plan document is something that you are preparing for an early stage investor, the recommendation would be to prepare one for yourself first, which tells you whether you need to proceed with the venture or not.

More often than not, it is a document which would tell you not to proceed with one. i.e A GO NO GO decider.

Moving Forward

The requirement of a Business Plan and the preparation of the same is greatly influenced by the need of the audience. A comprehensive business may be a document privy to only its creater, but its sharing includes a lot of customization. In all, there would be 3 types of audience which would define the scope of this document.

  1. The Creator i.e. You (often known as the promoter/founder/or the upcoming CEO of the Upcoming organization)
  2. The Investor
  3. The Partner

Let us discuss the audience in a little more detail.

 The Creator i.e. You

You need a business plan to convince yourself that your idea means serious business. Many a times a thought or an idea, until it is put down on paper stays clouded with a lot of biases. These biases may be emotional or totally based on lack of information about the industry you are going to operate in. Also, for a B Plan, your Brain acts as RAM. It’ll only keep as much info as you would need to recall immediately. Jotting down your plan on a piece of paper , relieves your brain of the mental pressure of keeping it in the immediate recall state and make a little space for other important information to come in. That is exactly why we work with to-do lists.

Once you start penning down all the relevant information around your idea, you would yourself see it taking a structure.

The most important element while preparing a Bplan for yourself would be to make sure your objective is met. If its monetary, then you should atleast on paper be convinced that your plan is going to give in the returns you expect; If its social, your plan should be able to help your consumers as per the volumes you expect.

The Investor

If you are preparing a Bplan to convince a possible investor about your project or idea, Please focus on Quantification.

Most of the investors are interested in the possible return. This return could be the financial return on their investment; or could be the social impact in case you are presenting the case for a Grant or could be the eyeballs or captive audience if the return expected is in terms of the marketing/advertising exposure. In all these cases, please quantify i.e. focus on figures.

Tip: For e.g Your investment of X may give you a potential IRR of y% based on the multiple exit options proposed.

Or The Plan shall generate employment for X number of individuals in a period of Y years.

Or This shall give you a targeted audience of X to showcase your product etc.

As far as my experience goes, a possible financial investor shall be interested more in the IRR and the pattern of growth. This shall totally depend on the Business model one has chosen and the multiple revenue options which have been proposed. Also for an investor, the courtesy of putting in a slide to showcase the possible exit options shall give the investor a confidence in your long term plans.

The Partner

A Bplan has an essential element of team incorporated into its structure. The team could be of the co-founding or the team members involved in the development of your product or service; or it could be a strategic entity or a partner which give your plan the much required thrust. In both the cases , you would have to sell your dream to your possible Business buddies who are jointly going to take your dream forward.

Tip: Focus on the corporate growth figures, the strong market demand, the Huge Market opportunity and possible financial returns.

All of the above stakeholders would possibly go through the entire Bplan during discussions; But focusing on the audience would help you prepare for your opening pitch and the areas which need to be stressed upon.

To all the Readers : The idea of this post is to share the experience gained from evaluation of numerous Bplans and consulting startups over the years.

About The Author

Ojaswi Babber

Ojasvi Babber, heads the Incubator at Amity University, Noida and also takes care of the PAN India Virtual Incubation program, which has been rolled across 17 different cities in India.

If you need any customized help or advice for your BPlan or Pitch, DM him @ojasvibabber .

Note: The views and opinions expressed are solely those of the author and does not necessarily reflect the views held by Inc42, its creators or employees. Inc42 is not responsible for the accuracy of any of the information supplied by guest bloggers.

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