25 Jan 2018, 07:47 — 5 min read
On 26 January 2018, India will celebrate its 68th year as a Republic. Many governments have come and gone. Each successive government analyses the performance of the previous regime and endeavours to improve on certain areas to ensure that the nation continues on the path of development.
Similarly, do you as an entrepreneur analyse your business growth? If not, this Republic Day pledge to focus on business planning.
Why do you need a business plan?
Whether you are a year-old-startup or an existing business looking to expand, a business plan helps you to ‘Think Through’. What are the ultimate goals/objectives you want to achieve. Once, these objectives are mapped in your brain, the execution process becomes simpler. When you create a business plan, it gives you an opportunity to learn about your industry, market, and competitors.
Some myths regarding business planning
The reality is that business planning is relevant for all business, be they startups or well-established businesses. A business plan outlines the road map for your enterprise. It can be a referral document that guides you when you hit a roadblock. While a business plan is in a sense the blueprint of an enterprise, it can be flexible enough to accommodate enhancements as the business grows.
Key elements of business planning
1. Your objective should be to earn profit
This is the time of startups coming with unique ideas and angel investors willing to invest in these businesses. A business should be established with the objective to earn profit, not just to get funding. Funds can help you survive for some time, but it can’t earn you profit if you have not planned it effectively.
2. Concrete goals
Set concrete goals towards your targets:
3. Conduct an effective market survey
Before you start your business full-fledgedly, it’s important that you make a soft launch to some prospective customers. Take feedback from customers for improvements in your product or services and then make a hard launch. This way your product/ service will address the needs of your customers in a much better way and you will save money in terms of marketing.
4. Competitive analysis
The biggest mistake we make while doing business is that we just consider the well known names in the same industry, analyse them and forget to consider the small competitors operating in our vicinity. It is prudent to analyse even the smallest player in the industry, because you never know when they may become your biggest competitor.
5. Geared for change
Business planning is a continuous activity. A good business plan is the opposite of one that is written in stone. A business plan should evolve as your business grows. Some strategies may be retained and some may have to be replaced. When things change, the business plan document helps you to keep track of changes. Reviewing assumptions is the best way to figure out when to change the plan, and when to stick with the plan.
6. Cash flow
In business when you earn a good amount of revenue, you may have the tendency to ignore some overheads. These are opportunities to save costs. When you save on expenses, it will act as a reinvestment tool for other expenses and ultimately will help to increase the liquidity of business. A business plan can help you manage your costs effectively.
7. Marketing plan
A robust marketing strategy is an integral part of your business plan. Marketing is not only about telling people that your products or services exists. It is about ensuring that your products and services are easily available. Marketing is also about find the right consumer at the right place. Your marketing plan will enable you to select the best advertisement mode of communication as per your budget.
Thus, a complete, thoughtful business plan is one of the most valuable tools in helping you reach your long-term goals. It gives your business direction, defines your objectives, maps out strategies to achieve your goals and helps you to manage possible bumps on the road to success.
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