What is a Business Plan?
A business plan is a written document that is a guide to conduct a successful business. This document will contain every detail about the ways and methods in which the company should and will conduct its business.
The business plan should contain the some important elements like Standard Operating Procedures, Company Core Values & Objectives, Business Model, Company Hierarchy Structure, Marketing Plan.
What are the elements of the Business Plan Document?
1. Standard Operating Procedure
Wikipedia defines Standard Operating Procedure as “A standard operating procedure (SOP) is a set of step-by-step instructions compiled by an organization to help workers carry out routine operations.
SOPs aim to achieve efficiency, quality output and uniformity of performance while reducing miscommunication and failure to comply with industry regulations”.
It is very important for you to make SOP a part of your business plan. It helps to ensure that the same procedures are performed at the overall company level.
This in turn helps in boosting a company’s performance and reduces time wasted due to miscommunication.
The Standard Operating Procedures should also mention the internal control system that is placed in the company and the same cannot be override. It should mention in detail that what are the internal controls and who is responsible for what.
2. The Company’s Core Values and Objectives
A Business Plan should contain what are the core values of the company. These values should be the foundation for your company and should be followed while making business decisions or any other decision for the company or its employees.
For better understanding lets take the example of Apple, the core values of apple are:
– Accessibility:
Built‑in features that work the way you do. Make them yours, and make something wonderful.
– Education:
Giving products, support, and opportunities to schools that need them most.
– Environment:
We’re carbon neutral. And by 2030, every product you love will be too.
– Inclusion and Diversity:
We’re all in. Across Apple, we’ve strengthened our long-standing commitment to making our company more inclusive and the world more just. Where every great idea can be heard. And everybody belongs.
– Privacy:
Privacy is a fundamental human right. At Apple, it’s also one of our core values. Your devices are important to so many parts of your life. What you share from those experiences, and who you share it with, should be up to you.
We design Apple products to protect your privacy and give you control over your information. It’s not always easy. But that’s the kind of innovation we believe in.
– Racial Equity and Justice Initiative:
We continue to be reminded that certain uncomfortable truths about our society are ignored, silenced, and sidelined. Comfort can no longer come at the expense of change for communities of color.
As global leaders in technology and business, we have an urgent responsibility to dismantle systemic racism and grow opportunities for people confronting it every day.
Our Racial Equity and Justice Initiative (REJI) is a long-term effort to help ensure more positive outcomes for communities of color, particularly for the Black community. We’re beginning with a $100 million commitment.
And our commitment will endure until there is enduring change.
– Supplier Responsibility:
How we make is as important as what we make. Putting people first. Opening doors through education. And protecting the planet.
Isn’t this amazing? How these 7 core values help in making a strong base for the company. It helps in unifying the values, objective and how work should be conducted for efficient results for the Company, its employees and the society.
I highly recommend to make Core Values for your company before starting the business operations.
Strong and Good Core values helps in making your brand strong and trustworthy.
3. Business Model
It is very important for your to make a business model to get clarity about the way the business will be conducted. As you can see in the above image there are various aspects in a business model.
- Key Partners is basically the relationship you have with other business, government that will help your business model work.
- Key Activities are the things that your company must do to make the business model work.
- Key Resources are the assets and inputs the company uses to function effectively.
- Value Proposition represents the values that your product/service will provide to your customer.
- Customer Relationship should have the relation a company will establish with its customers.
- Customer Segments should determine the target customers your company is targeting.
- Channels will represent what communication channel will your company use to reach your customers.
- Cost structure shows the various types of expenses that your company will incur during its business operations.
- Revenue Streams will define the sources/medium from where your company will earn its revenue.
4. Company Hierarchy Structure:
What according to your is a company hierarchy structure? If you are thinking that just determining the different post determines the company hierarchy system, then you are only partially right.
A company hierarchy structure should enlist a proper list of all its position from i.e. from the top most position to the bottom most position.
What makes the structure effective is that the roles, responsibility, power and control for each position should be defined. You may be thinking why is this necessary? Its necessary and important since it helps in smooth and effective functioning of company operations.
It makes it easy to understand who and when to approach in case of a particular problem or issue.
5. Marketing Plan
Dr. Philip Kotler defines marketing as “the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and desires. It defines, measures and quantifies the size of the identified market and the profit potential. It pinpoints which segments the company is capable of serving best and it designs and promotes the appropriate products and services.”
Dr. Philip Kotler
Key Points to Understand:
– Marketing starts with understanding customer needs, this leads to creating a product.
– Marketing is also about keeping existing customers happy by communicating with them so they can be retained for life.
– It is important to build trust with the target audience
– Marketing leads to building a strong brand of the product and the company
– Helps in identifying Target Market
A well placed and strategized marketing plan will help you identify appropriate medium of marketing for your target customers.
An effective marketing plans helps in revenue growth which in turns helps in growth of your company and a good market presence.
Why is it important to have a business plan in place?
A well developed business plan will help you ensure:
- A structured way for business operations.
- Reduction in miscommunication and clarity for achieving the goals.
- It ensures that the company and the employees are on the same page and everyone is working towards the same goal.
- The employees can refer everything to one place leading to saving in time and energy.
- Gives a clear road map to your business and its functioning.
- Helps in making a critical decision in your company.
- Setting objectives and goals for your business.
Hope this article was helpful to you in understanding the importance of a business plan.
If you like this article please send us your views on the same.
In case you would like to know an overview of things to remember before starting your business, please refer to our article https://entrepreneurialdiary.com/starting-a-new-business-remember-these-principles-to-make-a-successful-foundation/
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