What is a Business Plan? Get to know the meaning and benefits

Before starting a business, a business plan is one of the most important things you need to understand. This business plan includes an explanation of the nature of the business, strategy and goals that can be achieved.

The business plan is also one of the most important considerations for investors. If you want to receive funds from investors, you must not be careless in preparing them. Let's learn the meaning, types and how to do it in the following. 

Definition of Business Plan

A business plan or business plan is a written policy or document that summarizes the overall goals and operations of a company. Those of you who want to start a business should make a thorough business plan so that you have clear goals, both short and long term. The reason is, a business plan helps us determine the right steps in doing business.

It starts with defining the market, applying for financing, evaluating business income and expenses, and analyzing any risks that arise in the course of business. Each step must be handled with proper policies. A business plan is one of the most important supporting factors in policy making so as not to be deceived.

Therefore, in general, a business plan is a guideline for the management and development of the company, both in the personal and business spheres. 

Type of Business Plan

Each business plan certainly has different aims and objectives. That's why you need to know about the various types of business plans, including:

Operations Business Plan

Operation business plan or functional business plan, is a business plan specially designed for internal business. This business plan presents the company's operational plans and policies. Furthermore, this business plan also contains a description of the responsibilities of each person in each company.

In addition, this business plan can be used as a reference for future business implementation and the company's timeline

Growth Business Plan

Growth business plan is a business plan that describes the company's future business growth plans. This business plan can be used for internal or external purposes, for example to get more capital from investors.

If used for external purposes, this business plan should be explained in more detail. Usually contains a detailed description of the company, organizational structure and financial position of the company.

Development Business Plan

A development business plan is a detailed description of a growing business. This action plan mainly deals with corporate governance, company organization and the responsibilities of each employee. Therefore, this document is not only intended for internal parties, but can also be used by external parties.

Startup Business Plan

The startup business plan is a description of the company, especially the startup that will be established. This business plan includes the provision of goods or services to prospective customers, market evaluation, market structure, risk management and other management structures that will be implemented later.

Strategic Business Plan

A strategic business plan is the most complex type of business plan compared to other business plans. In this business plan, various strategies are explained to achieve the company's goals in more detail. In general, several elements that are considered important are included in this business plan: the vision and mission of the company, the main drivers, the strategy for achieving the goals and the timeline for implementing the strategy.  

How to Make a Business Plan

Creating a business plan must contain at least some information components. The following are the steps taken from the business side:

1. Title and Content

The business plan must be presented in a folder with the company name, company name, address, telephone number, email address and website and date.

You don't have to spend a fortune on a fancy case or cover. Readers want a plan that looks professional, easy to read, and concise. Add the same information to the homepage. If you have a logo, you can use it too.

2. Business Plan Summary

An important part of a business plan is a business summary. It tells the reader what you hope to achieve with this business. For example, if you need a loan of IDR 50 million, specify in the business plan how it will be used, whether it will be used to buy new equipment, pay off ongoing debt, or expand your business.

If you are looking for a business partner, tell him how much the profit is and how it will be divided, how long it will take you to repay the loan.

3. Product Description

Another important part of a business plan is the product description. Company product descriptions can range from a few paragraphs to several pages, depending on the complexity of your business plan. If your plan isn't too complicated, keep your business description short.

When describing your product or service, make sure the reader has a clear idea of ​​what you are talking about. Describe how people use your product or service and talk about what makes your product or service different from other products or services on the market. Describe what differentiates your company from competitors.

Then explain how your business gained a competitive advantage and why your business is profitable. Describe the factors that you believe will be successful.

4. Market Analysis

A thorough market analysis will help you determine your future prospects and define a pricing, distribution and advertising strategy that will help your business grow in both the short and long term.

Start your business plan with a market analysis i.e. define the market in terms of size, demographics, structure, growth prospects, trends and revenue potential. Next, determine how often your target audience buys your product or service. 

Then find out more about the annual purchase possibilities. Then figure out what percentage of the annual amount you have or can achieve. Remember that no one has 100 percent market share and even a small 25 percent share is considered a dominant share.

5. Operations and Management

The operations and management components of your plan should describe how the business will operate on an ongoing basis. The operating plan highlights the logistics of the organization, such as the responsibilities of the management team, the roles assigned to each industry, and the capital requirements and costs associated with running the business.

6. Financial plan

The most important thing when making a business plan is financial planning. Once you've defined your product, market, and business, the next thing to pay attention to is financial reporting, which includes income statement, cash flow, and balance sheet.  

Advantages of a Business Plan

What are the benefits of making this business plan? There are many reasons that make a business plan very important when building a business, including:

Assist in Decision Making

Of course, when you start a business, you face many challenges. For example, new product development, job recruitment, financial issues and others. To do this, the right decision must be made. One of the benefits of a business plan is that it can help you make decisions. Manage the entire company financial system

Apart from that, a business plan can also help you plan good business financing. The goal is to avoid mistakes in the future in financial management and decision preparation.

Helps Attract More Investors

After all, the most important benefit of a business plan is that it can help you attract more investors. This is very important for the growth of your business, especially when a startup business needs investor support to make your business more successful.

This is an explanation of what a business plan is and its importance in building a business. Hope it is useful!