Let first understand what is business plan..?
A business plan is a formal accounting statement that numerically describes business goals, strategic financial plan and managerial steps for reaching those goals.
Generally, a business plan is synthesizing many different interdisciplinary concepts like business administration, accounting, banking, corporate Finance, management, promotion & marketing etc and all.
Before beginning with the step-by-step procedure about the writing of a business plan we need to understand some basics of financial management.
let first understand the definition of some budgeting terminology.
Sales budget – An estimate of future sales, often broken down into both
units and dollars. It is used to create company sales goals.
Production budget – An estimate of the number of units that must be
manufactured to meet the sales goals. The production budget also estimates the
various costs involved with manufacturing those units, including labour and
material.
Cash flow/cash budget – An estimation of future cash receipts and expenditures for a particular time period. The cash flow budget helps the business determine when income will be sufficient to cover expenses and when the company will need to seek outside financing.
Project budget – Costs associated with labour, materials, and other
related expenses. The project budget is often broken down into specific tasks,
with task budgets assigned to each. A cost estimate is used to establish a
project budget.
Balance sheet –Sheet represent assets, liabilities and differential net equity.
Income statement (profit & loss account) – Sheet represent revenues and costs.
Cash flow statement– Sheet represent quantity & quality of liquidity created & absorbed.
Now Step by Step Guide to Outline Your Business Plan.
Step no: 1
Start your business plan by analysis of Your Potential Markets. Which mean who want your product or service?
Step no: 2
Define your Company goals, vision and what products and services will you produce or provide?
Step no: 3
How will you distinguish your product or service from others?
Step no: 4
How will you reach your customers and what will be your marketing champing strategy?
Step no: 5
Sales Effort: How will you attract customers?
Step no: 6
Workforce management: How will you hire and organize your workforce?
Step no: 7
Identify Company’s Initial Needs: What will you require to get
started?
Step no: 8
Funding Sources: Where will you find your financing?
Step no: 9
Explain Your Financial Data: How will you convince others to invest in your endeavour?
Step no: 10
PESTLE and SWOT analysis
PESTLE: Strategic methodology to determine external forces that impact your business plan. comprehensively using Political, Economic, Social, Technological, Legal, Environmental trendy analysis for reviewing the macro environment.
SWOT: Structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project, to consider if the objective.
Step no: 11
Risk Analysis
Risk is a concept that identifies a possibility & measures the expected
probability of specific eventualities (possible states of the world).
It can be done two method
- Upside and downside risk, as a consequence of revenues' volatility
- Sensitivity and scenario analysis.
First draft your business plan. At first, do not worry about capitalization, punctuation, and grammar. All you need to worry about is putting your ideas down on paper & prepare an effective and efficient business plan. Once a draft is ready, begin proofreading correct all the mistakes that you can find. Organize your plan in a way investors find useful
In the end
Writing a plan is a difficult exercise, but it’s an important one for the future of the business. A business plan is not just about attracting investors but helps you organize your business better, with one document.
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