Business Plan: Definition, Purpose, Elements & Types Explained

A business plan is a roadmap for a corporation, defining its goals, strategies, and methods for success. It gives a thorough picture of the company, including market research, target audience, financial predictions, and organizational structure.

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    Table of Contents

    What is a Business Plan?

    Business Plan is a kind of document which states the business’s goals and how it plans to achieve them. Business planning may assist both startups and existing businesses. Business plan includes a business’s go-to-market strategy, financial predictions, market research, corporate objectives, and mission statement. The business plan may also include key personnel in charge of reaching the goals, as well as a schedule.

    Purpose of a Business Plan

    A business plan is a roadmap for a corporation, defining its goals, strategies, and methods for success. It gives a thorough picture of the company, including market research, target audience, financial predictions, and organizational structure. The plan assists entrepreneurs and stakeholders in determining the viability of a company idea, obtaining finance, allocating resources efficiently, and navigating hurdles successfully. It also acts as a tool for tracking progress, making changes, and expressing the company’s vision and direction to internal and external stakeholders. Ultimately, a well-crafted business strategy raises the chance of long-term development and profitability.

    How to Write a Business Plan?

    A business plan’s length might vary substantially depending on the firm. Regardless, it is advisable to keep the core material to a 10-15 pages booklet. Other important items that need a lot of space, such as patent applications, might be cited in the main text and submitted as appendices.

    What are the elements of a Business Plan?

    Some of the common elements of a Business Plan are:

    • Write an executive summary: Here’s your elevator pitch. It should include a goal statement, a brief explanation of the items or services your company provides, and an overview of your financial development ambitions. Though the executive summary is the first thing your investors will read, it might be more convenient to write it last. This allows you to emphasize facts you’ve noticed while writing more in-depth parts.
    • Company’s Information: This brief section of your business plan will include your business name, years of operation, core offers, and positioning statement. You may even include fundamental principles or a brief history of the organization. The company description’s purpose in a business plan is to describe your firm to the reader in a captivating and succinct manner.
    • Statement of objectives: If you’re planning for a business loan or an outside investment, use your statement of objectives to describe how the finance will help your company develop and how you intend to meet those growth goals. The goal is to offer a clear description of the potential your company delivers to the lender.
    • Products & Services: The company should define the products and services it provides or intends to launch. This may contain price information, product longevity, and distinctive customer advantages. Other elements that might be included in this area include production and manufacturing procedures, any applicable patents that the firm may own, and proprietary technologies. Research and Development-related information might also be put here.
    • Market Research: You have to do some market research to find out who your company’s core customers are, and why?” Your business plan’s target market section goes into great depth about this. The target market should describe the ideal customer’s demographics, psychographics, behaviors, and geography. 
    • Competitive Analysis: In almost every industry, there are several market participants. Even if your company has a dominant market share in your sector or if your business model is unique, you will face competition. In the competitive analysis section, you will objectively assess the industry landscape to decide where your company belongs. A SWOT analysis is a structured approach to present this part. 
    • Financial Analysis: Established business might contain financial statements, balance sheets, and other pertinent financial data. New firms might give financial goals and projections for their first several years. Your strategy may also contain any financing requests you are making.

    Types of a Business Plan

    There are the different types of a business plan are:

    • Startup Business Plan: A detailed plan including the aims, strategy, market research, and financial estimates for a new enterprise in order to attract investors or obtain finance.
    • Internal Business Plan: Management and staff are primarily concerned with operational strategy, resource allocation, and goals for internal use.
    • Strategic Business Plan: A long-term plan that outlines a company’s overarching direction, goals, and growth methods.
    • Feasibility Study: Before committing resources, evaluate a company idea’s feasibility by considering market demand, competitors, and potential hurdles.
    • Operational Business Plan: An extensive strategy for day-to-day operations, including processes, procedures, and resource management.
    • Growth or Expansion Plan: Providing plans and techniques for growing an existing firm, entering new markets, and introducing new products/services.
    • Succession or Exit Plan: Planning for the transfer of ownership or leadership, whether through sale, merger, or handing over to the next generation.