What every good Business Plan should contain

Company Overview: The business plan has to specify the company intent and objectives. It has to list the company organisational profile i.e. employee numbers, the chain of command, communication channels, management philosophy and the company partners and directors.
Marketing Policies and Strategies: A sound business plan must always describe the marketing policies and strategies of the company. This includes the target consumer base, the advertising channels, various media communication strategies and employee welfare schemes.
Financial Status: A Business Plan ought to list in detail the expected profits including revenues and turnovers. Depending on the type of business, the plan has to chart out the rates of expected operating profit, gross and net profit margin rates. The plan should clearly outline the investment on the business opportunity and the returns received on it. It has to map out the employee salary rates and the expected profit and loss margin. The plan has to state the risks and uncertainties of the market. It has to observe contingency actions in case of insolvency, damage, obsolete goods and services.
A business plan rests on the twin bedrocks of Market Research and Business Opportunity. When an entrepreneur decides to form a company, the first step undertaken is that of conducting intensive market research.
Market Research: Market research shows the entrepreneur whether his business intent or draft plan is commercially viable or not. Market research details, analyses the financial rates and trends in a particular sector. Market research is not static but is always in flux. It acts as a guiding post informing the entrepreneur whether the investment on a business opportunity is feasible or not.
Business Opportunity: A business opportunity charts out the various assets involved in a business. It includes the property site, machinery, goodwill and the company’s real estate. An entrepreneur makes an investment on a business opportunity. In a nutshell, a business plan has to show the investment made on the business opportunity in real value.
The UK Business Link and Economic Development Weekly argues that a business plan must include a marketing strategy, sales strategy, employee turnover rate, demand and supply growth rate. However, the business plan should state real projections. It should not give overestimations. The entrepreneur should keep his/ her target audience in mind while framing a business plan. Business Link states that there can be two types of business plans:
a) A business plan which exists at the departmental level of a company: The plan lists only short term goals and inter-departmental policies. The business plan is drafted to achieve a certain purpose in a specified period of time.
b) A long term business plan: It maps out the company intent, objectives and financial regulations. This type of business plan is drafted at the inception of the company and is used to get financial grants and loans. The plan acts a guiding light to employees, investors and management. The business plan is a lengthy document detailing the projected returns and the amount of investment. The business plan is read and analysed by:
<ul><li>Bank manager</li>
<li>Alternative finance providers</li>
<li>Advisory business firms</li>
<li>Investors</li>
<li>Management and employees</li></ul>
The business plan is used:
<ul><li>For business assessment: A business plan outlines every aspect of the business covering the basic company purpose.</li>
<li>To make a SWOT analysis: Whether a new company or an existing one, a business plan provides a detailed list of the strengths, weaknesses, opportunities and threats faced by the organisation. The SWOT analysis helps to show shareholders the standing of the company in the market.</li>
<li>For financial security: A business plan is used by an existing company to apply for grants and loans. The plan is used as a yardstick by financial institutions to decide whether to invest in the company or not.</li></ul>
A business plan must not be written in a hurry. It ought to be written after considering every aspect of the company. An entrepreneur often runs into a few common mistakes when composing a business plan:
<ul><li>Unrealistic projections and figures: Investors concern themselves with numbers. Thus, it is essential for every entrepreneur to state realistic projections based on current market trends and demand rates. Banks and financial institutions demand precise forecasting in case of marketing and financial strategies.</li>
<li>Commercial viability: A business plan should not be overly ambitious or downright impossible. It has to map the company intent which is commercially viable. Investors look for a company’s market base in a business plan. The business plan has to clearly define company goals, path of achievement, employee roles and consumer base.</li></ul>
In short, a good business plan should answer these questions:
<ul><li>What is the proposed business issue?</li>
<li>What is the proposed business solution?</li>
<li>What will be the material benefits of the business solution?</li>
<li>Who will be the recipients of these benefits?</li></ul>
An answer to these questions indicates business transparency. Thus, a good business plan ought to be commercially viable and transparent.