You might have a revolutionary idea brewing in your mind. You may have already planned how you will go about your idea and turn it into a successful venture.
But mapping out the steps of execution, even for the smallest idea, needs proper planning in order to bring the idea into reality.
Putting together thoughts behind an idea and chalking them out can give a concrete shape to your business.
Such a course of action is commonly referred to as a business plan – "a document setting out a business's future objectives and strategies for achieving them," as described by Oxford Languages.
Not only does a business plan depict a venture's business model, mission, vision, goals, and aims; factors that can set companies on the right path to success, it can also be used as a blueprint to secure a crucial foundation of any business – capital.
Many start-ups operate on innovative business models, yet lack of proper planning and execution works as one of the biggest barriers when it comes to securing an investment.
A proper business plan can help any venture secure investment and sustain in the long run, even during uncertain times such as the Covid-19 crisis.
Now, if you are wondering how to draft a business plan, here is an outline:
Before you jump straight to your detailed business plan, you should consider giving the reader – your potential investor, a brief summary of what your venture does, how unique it is, your venture's mission statement, financial information, and growth projections.
Every business plan requires extensive market research; you need to know about the industry you have just started operating in.
Along with that, it is crucial to find out about your competitors and have a good idea about your customer base. Your customer share will determine your market share potential.
In order to break down how the industry works and competes, a business plan should identify the competitors in the market, evaluate their strategies, and find out the strengths and weaknesses relative to your business.
This will help you figure out which strategy you might want to use for entering the industry landscape.
Unless you have a monopoly idea or near-monopoly ideas like Facebook, Intel, Google, or even Desco, you need to find one or more factors that differentiate your business from the rest.
Investors are keen on business' competitive advantage – it is an attribute that will make your business idea shine brighter than other business ideas.
A well-researched business plan should address why it is grabbing a specific opportunity and it has to be backed by relevant data.
Inform your readers about its current stage - is it ready to be marketed or is it still at the testing stage?
The marketing framework should notify the readers about the product or service's pricing strategy, promotional and distribution plans, and sales strategies as well.
Besides knowing what type of business you want to operate, investors would also like to know how you run your operations.
Give the investors a brief description of how you will be generating revenue, and sources of generating revenue, both external and internal. In the financial plan, you should include accounts of your current income and expenditure and the forecast as well.
Keep in mind, even if your business is generating steady income, you can still approach investors if you believe your venture has the capability to expand exponentially.
However, stating that would turn it into a fact and you would have to provide accurate projections, calculations, and statistics that can allow investors to analyse your forecasts.
While seeking investment for a particular time-span, you also have to keep in mind the exit strategy; the point when the initial investors get their returns on investment.
In most cases, exit strategies lead to bigger companies acquiring the company at a price way higher than its current market worth.
Hence, you need to put options for the investors on the table and also evaluate the firms you think can be potential acquirers in the near future.
Remember, the business plan will represent the venture even before you get a chance to represent it. So, make sure you give the best first expression through your business plan.
Where to pitch business plans
Now that you know how to write a business plan for your start-up, you also need to know where you should be pitching your business plan.
There is a pool of investors in Bangladesh's current start-up ecosystem and you need to find the right fit for your venture.
Before approaching an investor of a venture capital firm, you need to know the type of business models they are interested in.
Do your research before you approach investors, you will only get one chance and you would not want to blow it off.