Every company needs a detailed, well-organized plan of action to develop and expand successfully. Depending on the goals, different business plans have other formats and contents that describe a course of action. This article describes the various business plans and how to use them successfully.
There are many other titles for business plans, including strategic plans, conventional plans, operational plans, internal plans, growth plans, and many more.
Different types of plans could be required under various circumstances. Additionally, a successful company plan will be put to use as intended. You can create a better road map for your company’s future if you understand how a particular type of plan operates.
What is a business plan?
A business plan is manual outlining goals and the activities to accomplish a certain business goal. Business plans establish a roadmap to success throughout a company’s growth, from its founding to its expansion.
The most popular company plans include those on the list below:
A startup plan is a business plan that a new business presents to potential investors to secure startup capital. Startup plans serve as basic frameworks that companies might modify as they expand. A thorough plan will have the following details:
- A succinct summary
- An Overview of the Business
- background in management
- What goods or services the business offers
- value statement
- blueprint for strategic marketing
- market assessments
- estimated startup expenses
- Income and profit estimates, as well as cash flow projections
A company must also describe its exit strategy for investors in the financial part and how it intends to use investor funds precisely.
A strategic business plan describes the strategies a business will employ to accomplish its ultimate objectives. The majority of strategic plans have these five key elements:
- The mission of the company
- company goals
- essentials for business success
- ways to achieve goals
- Date of Implementation
Most of the time, strategic plans are solely used internally and serve as the framework for a complete firm. Using a SWOT analysis, managers must evaluate the company’s strengths and identify opportunities for improvement while developing this kind of plan. The acronym SWOT for Strengths, Weaknesses, Opportunities, and Threats helps firms better understand the variables influencing corporate decisions. By doing a SWOT analysis, management may decide which strategies to use to capitalize on its strengths, pick the greatest opportunities, and surpass any obstacles the evaluation may have shown.
The strategic plan’s deadline implementation section describes how the selected strategies advance the business toward its milestones. This could include specifications for distributing resources and important dates for fulfilling certain goals.
A feasibility plan is produced when a business seeks a new business initiative, such as developing a new product in an existing market or selling everyday items to a new market. This plan explains what market will want to purchase the good or service and whether the new business endeavor will provide a profit the company will find valuable. Typically, feasibility business plans provide information on how well a product will sell or whether the target market is viable and will yield a high rate of return on investment. This strategy can call for product testing or crowdsourcing market research to ascertain a product’s commercial feasibility.
An operations plan, also known as an annual plan, is a component of strategic planning that focuses on outlining the daily operational tasks a company must carry out to accomplish tactical goals. This type of strategy outlines the duties of management, divisions, and staff members, as well as how they contribute to the business’s overall performance. Plans for operations also include the following:
- Organization objectives
- Actions needed to achieve objectives
- supplies required for the activities
- Personnel requirements
- timelines for implementation
- strategies for tracking progress
Operating budget increases, often requested annually, are also justified using operations plans.
When a business wants to expand and the growth involves more resources, such as a financial investment, materials for new goods, and an enlarged workforce, an expansion or growth plan is utilized. Businesses can produce growth plans for internal or external factors and contain various data.
Plans for external growth are created when expansion necessitates funding from outside sources. For investors to decide whether to finance the company’s development, these plans include as much information about the company as feasible. A long list of details must be included in an external growth plan. Some specifics needed are:
- complete company profile
- complete information on services or products
- Information about the management group
- granular financial forecasts
- Data and thorough market study analysis
- Money request
- Important business accomplishments
External growth plans often incorporate everything a typical business plan includes, plus more in-depth information, like a startup plan, to cover as much ground as possible. They are designed with the idea that a bank or investor needs to gain more knowledge about the company.
Plans for internal growth are created when a company’s expansion is financed by its earnings. Without specifics about the business or product, this strategy must include predicted sales and estimated expenses.
This kind of strategy is created when a company is looking for funding, considering an acquisition, or considering another potentially risky move and needs a plan in place in case unfavorable circumstances arise. What-if plans need to be more formal and more of a replacement for the original business strategy.
For instance, if a business needs financing, it would probably have a very thorough growth plan for prospective investors to review. Still, it would also have a backup plan that considers the least desirable scenario the business may face, such as a significant loss of market share, and how they would proactively and strategically react to avoid a crisis.
What-if business plans assist management in analyzing the possible outcomes of making important business decisions like growing its workforce, increasing product prices, or deciding to merge with another company.
A one-page plan summarizes a business and draws attention to its key components, and introduces a company to possible partners and investors. This strategy comprises a sales estimate and details the company’s product or service and target market. It also features a business summary highlighting the organization’s mission and values. This is often referred to as a sales pitch.
Checklist for a Business Plan
Written documents, known as business plans, provide detailed information about potential business endeavors. Business plans are frequently created by entrepreneurs to aid in developing their ventures. These plans frequently include much data about the internal and external factors influencing the small firm. Business plans can aid in securing outside funding for the company and give entrepreneurs a playbook for their venture. A few universal components are frequently seen in business strategies.
An entrepreneur’s talent and knowledge in the business world are typically described in the business plan. This data gives readers of an external business plan a concise overview of the entrepreneur’s achievements. Business plans may also include details about the management group or the structure of the brand-new company. When starting a larger business organization, entrepreneurs frequently incorporate this information. Depending on the size and breadth of their business operations, entrepreneurs may need to supply more information in this section.
The financial summary of the new business endeavor is typically the most crucial section of the business plan. The financial plan details the startup costs, anticipated business expenses in the first few months, and the amount of projected external finance in prospective sales based on the present economic climate. Business owners put this information together primarily for banks, lenders, and investors who might fund the company startup.
Business owners can do market research to assess the general stability of the current economy. Information may include the market’s overall size, current yearly growth rate, and different sectors or industries. Business owners might also need to disclose whether they plan to offer their products or services locally, regionally, domestically, or internationally. Each market will have unique characteristics in terms of its size and rate of expansion.
A business strategy also includes a demographic analysis of the target market. Customers’ age, race, sex, degree of wealth, and other details are covered in detail in this section. Business owners can also mention the market demand for specific goods or services. Business owners can use the information to customize their operations for a particular clientele. A customer study may be required for each market where the business will sell goods or services.
The level of present competitiveness in the business environment can also be described in business strategies. Business owners can explain how they’ll develop a competitive advantage to win enough customers and make a profit. The number of laws and taxes a small business will have to deal with while trying to position itself similarly to other businesses in the marketplace may also be included in the competition section.