Business Plan: Definition, Benefits, and Tips for Making it

Business Plan: Definition, Benefits, and Tips for Making it

The following is a summary of information about a business plan for those of you who will or are running a business.

There are many things you should consider before starting a business. For example, you must recognize the market in order to determine the right target consumer and product output. In addition to these two things, you also have to have a mature business plan.

Without a mature business plan, you may face serious obstacles such as difficulty finding funding to start your business. In fact, one of the purposes of a business plan is as an important consideration for investors to decide whether they want to fund your business or not.

In other words, a business plan is an important parameter to see if the business concept you create is promising and profitable. So, what is a business plan and how important is its existence for a business?

This article will answer your questions about a business plan. So, stay tuned so that you fully understand one of the important aspects of building this business.

What is a Business Plan?

As the name implies, the definition of a business plan refers to planning or projecting the future of a business or company. When talking about the future, you must be wondering about your life goals and how you will do to achieve them.

Not much different from this concept, a business plan is defined as a written document that contains detailed information about the goals (goals) to be achieved by a business or company and how to achieve these goals.

A business/company must have a clear goal so that the implementation of the business being carried out will have a clear direction as well. After understanding the goal, then determined how to achieve it.

Such as how to sell their products (marketing), how to manage expenses and income to provide a profit margin for the company (financially), to how to implement existing strategies (operational).

The business plan must describe in detail these things so that it forms strong fundamentals for running the business. The business plan can at least explain the position of the business/company in an industrial ecosystem and how it differentiates itself from its competitors.

Why is a Business Plan Important?
As explained earlier, the existence of a business plan is important for the sustainability of the business/company going forward. The following are the important benefits of a business plan from an internal and external perspective.

Internal: decision-making reference
You will often encounter problems and challenges when starting or running a business. Starting from sales that never increase to intense market competition. To solve these problems, you must have a reference for the solution.

Like the reference is the main goal of the business/company. The objectives of the business/company itself are stated in the business plan. Therefore, having a business plan is important to help you make decisions in every business problem you encounter.

In addition to goals, a business plan that contains various business/company plans and strategies will also be your guide in running a business. Like a ship, a business plan functions as a ship’s captain in order to reach its destination safely.

Internal: manage financial stability

In a business, financial problems are one of the important factors for the business to survive. Without good financial turnover, a business/company will experience several obstacles, such as production delays, and even the worst case of bankruptcy.

This is another reason why a business plan is important. In the business plan itself there is a financial plan for a certain period of time. The financial concept in the business plan is more or less the same as the initial function of the business plan as a guide for the direction of the business/company.

By planning the financial concept in advance, the company’s finances will be healthy and the business can continue to run. On the other hand, if there is no financial plan, the company’s financial turnover will be confused. Finally, you will only be confused about managing expenses, income, it could even be that the company does not reap profits.

External: means of communication with stakeholders

When building a business, you will be in contact with various parties, or what can be called stakeholders. The parties who are often associated with a business are investors, suppliers of materials for production or suppliers, etc.

If you want to work with them, you need a business plan to communicate your interests. If it has to do with investors, then you have to convince them with the business concept that you are carrying in order to get funding.

If you are dealing with suppliers, you must communicate what materials you need from them according to the business plan guidelines. For example, your business has a goal to provide healthy instant food to the community.

So, convey the criteria for what natural ingredients you can get from suppliers. For example, a supplier cannot meet these criteria, it means you have to look for someone else. If the relevant supplier can provide the required material, the discussion will continue on how much material should be supplied.

External: helps convince investors for funding

To start a business, of course you need initial funding. Unless you are rich and do not need an injection of funds from anyone. Typically, businesses that require initial funding will seek an injection of funds from investors.

Investors themselves have a mission so that their money can grow well. These investors have a keen eye on the prospects of a business. If you look at it from an investor’s point of view, of course they don’t want to just invest in businesses with unclear concepts.

Therefore, investors tend to entrust their money to promising businesses. Indirectly, a promising business will also be profitable for investors. Therefore, the existence of a business plan is an important factor to get funding from investors.

How to Make a Good and Correct Business Plan

To make a business plan, you must know the important components that must be in it first. These components are structured to form a complete business plan framework. The following are important components that must be included in the business plan framework.

Executive summary

The executive summary contains a summary of the overall business plan. You must write this section as interesting as possible so that the reader is interested in continuing to read to the next section.

In essence, you must be able to include the important points of each component in the business plan. Express it with effective and interesting sentences so that your business model is clearly visible and of course, can attract investors.

Business Profile

This section contains a summary of information about the company profile including the leader or company management team, vision and mission, staffing, office location.

This section outlines the company’s actors and the company’s goals listed in the vision and mission section.

If your business is still a startup, such as a startup, briefly describe your business along with what innovations you are carrying. You can also include a background story for the emergence of your business in response to a problem.

If you have a business that is considered already established, in the sense that it already has funding or is known to the public, you can include a brief summary of your company.

Products and services

As the title implies, this section contains a description of the product or service that you offer through your business, starting from the name, price, to the benefits or benefits for consumers. You can also enter how you will produce or create it.

If you include production, then you can also include derivatives such as how you ensure product quality with research. If the product you make must use a patent / proprietary right, then explain how to get it, or write if you have got it.

Market analysis

This section shows the value proposition of your business in the market using segmenting, targeting, and positioning methods. Segmenting and targeting means analyzing the target consumers, both demographically, psychologically, to behaviorally.

While positioning, you must map the position of your business in the industry through a SWOT analysis. The analysis will show you the strengths, weaknesses, threats, and opportunities that you can use to run your business.

In addition, you must also identify competitors who have similar business models. This serves so that you can take advantage of weaknesses that they have not had time to develop, then turn them into opportunities for your business.

All of these analyzes will show how much bargaining power you can provide your business with within the industry. In addition, market analysis will also show the extent to which your business can attract consumers and compete in the industry.

Marketing strategy

As the name implies, this section will contain how your business sells the products or services it offers. Not only that, this section will also discuss how a business/company builds a customer base and how to reach them.

In general, the marketing strategy used is to create a marketing campaign and advertise products. Whatever marketing strategy you choose, you must convey it clearly and in detail, including through what media the strategy is carried out.

Financial planning/report

As mentioned earlier, financial planning is an important aspect of a business plan. For businesses that are just being started, financial planning usually contains a projected capital and profits that are targeted within a certain period of time.

In addition, you can also enter the investor plans that you will target for initial funding. Meanwhile, for companies that are stable, you can enter financial reports including expenses, revenue streams, to the profits generated.

Financial planning is useful for showing the value of the business that you will or are currently running. The more convincing the projected value you offer, the wider the opportunity for you to get funding from investors.

Likewise, the better the profit generated will lead the company to other profits. For example, you can win a unicorn title, or you can even do an IPO listing on the stock exchange.

Tips for Making a Good and Correct Business Plan

After knowing the components that must be in a business plan, now is the time for you to know how to make a business plan properly and correctly. Actually, you just need to follow the business plan framework mentioned earlier.

It’s just that, you need to know a few things before entering these components. Follow some of the tips below.

Do thorough market research

Before building a business, make sure you do thorough market research. Overall means determining target consumers, identifying competitors, and positioning the business in the market.

It is important to map these three things to show the selling power that you can offer to investors. Remember, a clear business positioning will help maximize the opportunities that exist.

Clearly define business goals

After knowing your position in the market industry, it is time to formulate your business goals. As explained earlier, business objectives serve as guides for the direction of the business/company when they are executed.

Include evidence and references for a strong claim

You should not just claim data, for example when doing market research. You can’t say that a competitor has certain weaknesses without mentioning the evidence. This is so that the information you collect is accurate and does happen.

If you enter invalid data, it will confuse all business models. For example, you want to build a coffeeshop business with a target consumer age of 40-50 years just because you want to be different from other businesses.

In fact, you have to know very well whether consumers at that age are really interested in coffee with the concept of hanging out in the style of young people. If fundamental data like this is not right, then automatically all the business models that you have compiled will also be in vain.

Write a detailed, clear, and realistic business plan

Don’t beat around the bush. Present your ideas in bullet points. This will help your business plan to be read succinctly but still convey your meaning in its entirety. Also, avoid making excessive or grandiose plans.

Remember, you plan to run your business in a real society. In addition to having to collect real data in the field, you also have to realistically estimate your business. For example, whether the products offered will be able to meet consumer needs.

From this, it can be concluded that realistic also means that it must be supported by sufficient data. Realistic thinking also means being wise in determining the future of the business in order to survive and not fail.

Adjust the writing of the business plan to the reader

Don’t just make one version of a business plan. Make one original business plan file for the company’s internal, then modify the rest according to who will read the proposal. For example for venture capital, individual investors, and companies that want to joint ventures.

Simple Business Plan Example

Below is a sample business plan for beginners. You can adopt and adapt it to your current business.

Executive Summary

Society has faced a pandemic for more than two years and Covid-19 is mutating increasingly contagious. As a result, housewives who are worried about contracting Covid-19 when shopping for necessities.

Shopping.com is here to meet the shopping needs of housewives to minimize the spread of the Covid-19 virus. Shopping.com will also make it easier for housewives to shop with one click.

Shopping.com is a delivery business in the form of e-commerce that offers basic household needs. Based in Central Jakarta, this business is run by experienced people in the business and technology fields so we guarantee a satisfactory service.

They are like the former CEO of a well-known startup, Galih Suprayogo and former CTO of a well-known startup, Sabrina Amalia. With the available opportunities, Shopping.com is estimated to be able to reap a profit of IDR 1 billion in the first year of its existence.

Business Profile

Shopping.com has a vision to make it easier for housewives to shop quickly and comfortably. To make it happen, Shopping.com is here by creating a practical application to deliver consumer purchases to their homes in new and fresh conditions.

Shopping.com has the advantage of being an e-commerce platform that provides fast delivery services in 10 minutes. The weakness is that the Shopping.com brand is still not known to the public.

Shopping.com may be hindered by the existence of e-commerce with the same concept. However, with the faster delivery time, Shopping.com is sure that it can compete with other e-commerce.

Service

Shopping.com has various types of basic household products such as raw foodstuffs, spices, fresh vegetables and fruits, and cooking ingredients (oil, sugar, salt, etc.).

Consumers can open the Shopping.com application, select the desired product, make a payment, and 10 minutes later the order will arrive at its destination. The Shopping.com application will choose you the closest store that provides the product you purchased.

With Shopping.com, consumers will save time, save budget, as well as avoid the risk of contracting the Covid-19 virus when shopping directly at the market or supermarket.

Market Analysis

Target consumers

  • Housewives aged 23-35 years who actively shop for basic needs at the market or supermarket.
  • Career women who have little time to shop
  • Can operate mobile phones and make transactions in e-commerce online
  • Likes practical things
  • Lazy shopping offline

Competitors

There are several competitors such as HappyFresh which are well known to the public. In addition, there is also Astro which has the concept of fast delivery.

For HappyFresh, Shopping.com has been able to outperform the delivery time so that the goods arrive fresh. Meanwhile, for Astro, Shopping.com can outperform the Astro concept to deliver goods faster, which is 10 minutes.

Marketing strategy

Shopping.com will work with influencers with similar criteria to target consumers, to create a thread on Twitter about the shopping.com service. The goal is to make the content viral as well as to increase brand awareness. Furthermore, Shopping.com will also carry out various digital marketing strategies.

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