At Perspectives Ansights (PA), business plan is considered as an extremely important aspect of a startup and an absolute essential tool to success. Lack of a solid business plan for a startup is like shooting in the dark and as a result the probability of hitting the target is extremely low. On the flip side, a solid business plan offers complete visibility of the target and the means to achieve it. Many startups lack a solid business plan, and the statistics have it, 90% of the startups fail. Though not all failures can be attributed to lack of solid business plan, it is a major reason why startups fail.

 

Consider this, a 2018 CB Insights report that analyzed 101 startups for the reasons those failed, top 5 causes were "no market need", "ran out of cash", "not the right team", get out-competed", and "pricing / cost issues". If these startups were to rewind into their past and think, "what went wrong"? More often than not, it will turn out to be lack of clarity, which comes due to lack of comprehensive knowledge of the market and a structured approach / plan. For example, "No market need" indicates the startup didn't study and test the market well enough, "ran out of cash" indicates it didn't have a solid financial plan, and "not the right team" indicates it lacked a proper organization structure, hiring plan and processes. 

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In short, at a very basic level it indicates lack of a proper, solid professional business plan that takes into account each and every aspect of the business. As a newcomer in the startup space, it can be a daunting task to build a business plan. Below we have listed a few insights to help you understand what exactly is a business plan and the various aspects of a business plan.

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What is a Business Plan?

In very simple terms, as the name itself suggests, it is a plan of the way you aim to run your business. And hence should cover every aspect of the business. Broadly speaking, it should include your organization structure, your offering, target market, market strategy, competitive strategy, marketing plan, operational plan, and financial plan. 

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What are the various sections of a Business Plan?

A professional and comprehensive business plan must include the following sections:

1. Executive Summary

2. Opportunity Definition

• Target Market Definition

• Target Market Prevailing Problem or Market Gap 

• Proposed Solution to Address the Gap

• Opportunity Size given the Market Gap

• Results from Concept Testing 

3. Execution

• Market Analysis, Strategy, and Plan

• Competitive Analysis, Strategy, and Plan

• Marketing & Sales Plan 

• Operational Plan

• Key Milestones 

• Performance Metrics

4. About Company

• Overview

• Team (Ownership and Management)

• Organization structure across growth phases

• Execution team and recruitment plan

5. Financial Plan

• Revenue Forecast

• Financing

• Financial Statements

• Key Financial Ratios

• Valuation and Exit Plan (applicable if pitching to an investor)

6. Appendices and Exhibits (to capture greater detail)​

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What are the essentials of a Professional Business Plan?

While it is important to include all the sections and cover every aspect of the business in the plan, it is equally important to make it professional. For an ill-structured or unclear business plan can complicate matters and at worse misdirect the business. And if you are pitching to investors, such a business plan will ruin not just your opportunity raise fund but also damage your reputation. Below listed are the "must-haves" of a professional business plan:

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• Defines the opportunity well

• Establishes strong value proposition right at the beginning

• Comprehensive and backed by solid facts

• Establishes confidence in terms of your understanding of the market, expertise and proposed solution

• Leaves little to imagination

• Realistic, is in sync with the findings

• Clear and simple, even for an industry outsider

• Well-structured, easy to read

• Concise (spare a whole of lot details for appendices)

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How will a business plan developed at PA help me?

PA delivers a business plan that is built to not just impress the investors or partners, but also serve the startup in several ways such as:

• Develop deep understanding of the market (demand) and competition (supply), including all the factors influencing the demand and supply

• Uncover the true value of your offering to effectively position it in the market

• Better structure your organization

• Identify and prioritize opportunities

• Devise and execute an effective marketing strategy

• Establish milestones and / or growth phases

• Understand the costs involved

• Establish realistic revenue goals and devise an achievement plan

• Establish performance metrics to measure actual against target

• Develop a financial plan or financial model with details on every aspect including startup costs, funding mix (debt / equity), operational costs, pricing, sales in units and value, growth over a 5-year period, break-even point, return on investment and other key financial ratios

 

In short, you can expect a thorough business plan, which will help you successfully launch and run your startup. And should you want, help raise funds from investors.​ 

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Apart from business plan, we also offer investor pitch deck, financial plan with 3 or 5 years of projections. And should you need professional help of only sizing an opportunity to evaluate a go or no-go decision then we offer that as a standalone service as well.

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