What is the Significance of Business Plan in Entrepreneur Life

how to write a business plan

What is the relevance of a Business Plan?

A business plan is a summary of a number of premeditated steps and strategies that will determine the future of your business venture.

But as rightly stated by Lee Solman – “A vision without a strategy remains an illusion and a strategy without a process is a little more than a wish list.

A business plan is like a skeleton that lays out the plan of action during the course of the business/start-up. The development of a comprehensive business strategy shows whether or not a business can sustain itself in the market. For entrepreneurs, creating a business plan is of utmost importance as it not only helps in giving the enterprise a necessary direction but also helps in attracting investors.

Key Features of a Business Plan

A business plan is comprised of several components like an executive summary, industrial concept, market factors, trends, economic factors etc.

1. Executive Summary

It summarizes the plan of action and other related reports. It contains a brief skimmed and scanned overview of the contents.

2. Industrial Concept

It consists of details regarding the already existing competitors, the new competitors/entrants, and the substitute competitors. It also consists of information related to the various bidders and stakeholders.

3. Market Factors

This includes a detailed analysis of the challenges that an enterprise can face, demand-supply analysis, branding and related cost. Market segmentation and revenue generation is also covered under this category.

4. Trends

A market survey/research is essential to build statistics and plans to study and analyze various trends. Trends include socio-economic trends, technological trends, and cultural trends.

5. Economic Factors

Understanding whether the market is that of a developed, developing or an underdeveloped nation. Whether it is a capitalist, communist or socialist country also affects the economic structure of the nation. Economic infrastructure and global conditions are also an integral part of this. Resource allocation and availability affects the pricing and required investments.

benefit of having a business plan

 What is the difference between a business plan and a business model?

 A business plan outlines the vision or goals of a company/start-up and the ways of achieving these. A business model, however, is a culmination of the ways in which an enterprise creates, delivers and spreads value which has been obtained from customers.

A Business Model in a Gist

A business model is a representation of concepts that aims to analyze the viability and profit generation of an enterprise. Model is a combination of a business model canvas, business model patterns, and processes, design techniques, and strategies.

A business model canvas is a one-page layout or template that helps in developing a business model while a business model pattern is an architectural representation of processes and task-based models.

There are various types of Business Models-

1. The Franchise Model

The main aim of this model is to target successful brands and to purchase an ownership stake in these organizations.Thus they just have to polish and improve the already existing business strategy.

2. The Manufacturer Model

In this model, the finished goods or goods that are manufactured are sold either to potential customers or to other sellers.

3. Models for Distributors & Retailers 

A business model for a distributor is basically to provide services/products to customers either via a retailer or directly (from the manufacturer). A business model for a retailer is to provide services/products to customers directly (from the distributor).

4. The Subscription Model

These models are based on prior subscriptions to particular services offered for a limited time frame. The time frame can range from being monthly to being annual subscriptions. Customers have to subscribe accordingly to avail the services/products. Another sub- type of the subscription model is the temporary free trial model which basically allows free subscription for a short duration to attract more customers and later becomes chargeable.

If you are a budding entrepreneur and planning to start your venture, start with designing a business plan that will prove beneficial in long run.

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Neelika Chakrabarti

Neelika Chakrabarti

Neelika is an ambitious ambivert with a curious mind. She is an active debater who also loves to travel and explore different places. Neelika is passionate about being a successful Entrepreneur in her life and also loves to write about it.

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