7 factors to consider before drafting a business plan
What is a business plan?
A business plan is a formally detailed statement that includes the formation of organizational goals, threats, opportunities, and weakness of a particular business.
A strong, innovative business idea is an essential part even before you pen down a business plan. Every detail of the business along with its short-term and long-term goals has to be mentioned in the business plan. It is the fundamental cornerstone of your business – almost like laying the foundation of a new house. Everything that you will be doing in the near future will be based on this blueprint you create. So it is essential that the drafting of your business plans must be precise and detailed.
Here are 7 factors that you need to consider before drafting a business plan.
“If you are working on something exciting that you care about, you don’t have to be pushed. The vision pulls you.” – Steve Jobs
Before you pen down your business plans in a draft, you need to be sure about what you want from the business and why you want it and how exactly you plan to achieve it. You must have a clear view of what you want the future of your business to look like helps you tremendously to make it possible.
Identification of the target market
You need to have a clear idea of your target audience. Make a thorough research on them as they are going to be the end users of your business. Given the massive and widespread segmentation of the world market on the basis of age, culture, demography, gender and so on, you need to ensure you define these elements very well. The entire draft and the executive programs that follow will be based on these elements.
Understand the audience’s perspective
While drafting the business plan, do it from the point of view of the audience who will be targeted. Put yourself in their shoes and ask yourself the questions that you would have asked if you were on the receiving end. Try to answer those questions in your business draft clearly, precisely and concisely. There is no need for lengthy and elaborate explanations. Be more practical than unrealistic.
Study the competition and market condition.
Before drafting a business plan, get a clear idea of where the market stands or what is the market’s stance about that particular business. Do a thorough market research – both primary and secondary and try to find answers to these questions – What is happening in the market? Are the customers interested in such a product or service? Is the market a Red Ocean or a Blue Ocean? If the market is encroached with monopolies, who are the leaders and what are their business strategies?
These answers will help you draw up an accurate and favorable business draft.
Pay attention to the key factors and presentation
Once you have a clear idea of your vision, your objectives, your market and its conditions, you need to focus on the minute details and impressively present it to the investors. Include all the features and details you want the investors to know as they are the ones who will build your business. The draft should reflect a certain level of professionalism with no errors, realistic forecasting and assumptions and factual content.
Give the audience reason enough to believe that your business plan will work. You might be working on your instincts or be sure of the success, but the people you will be asking to come on board, they do not. They will only be interested if you can convince them about the plausibility of your idea. Your venture might be a time-tested one, or something unique. Nevertheless, you need to give the idea your own voice and words to make it appealing to the audience of the business plan. Also, be ready to be asked tricky questions about the business.
Write an attractive executive summary
Executive summary is the heart of your entire business draft. It explains in short what exactly your business plan is and what you want to do about it. The executive summary needs to be very precise but not detailed. Make sure you make an impressive presentation to pitch to your investors as they are the ones who will invest in your business. It should include all the essential elements of your business. It must also include enough information about your business so that your investors can see the potential in the business idea without having to read the entire plan.
Present the draft well with the key points concisely mentioned and highlighted – the points being product or service description, management strategies, executive plans, and goals. Use textual, numerical, graphical and tabular forms for more clarity.