A business plan remains vital in mapping out the difficult early years for a new company. Here’s some useful advice to consider after business school.
If you stand still in business, you’ll quickly be left behind. Entrepreneurs know that repeating the same ideas and processes is a risky strategy, but there are some techniques that have stood the test of time. Despite some commentary to the contrary, the business plan remains a valuable document for attracting external financial interest, as well as setting out goals for the internal direction of a company.
A business plan should forecast the business’s performance for the first 3-5 years, providing a helpful roadmap in the difficult early stages. The Harvard Business Review claims that the most effective plans are written between 6-12 months after the idea is first laid out. Plans written any earlier could see entrepreneurs following inefficient goals, such as identifying the wrong market or customer base for their product or service.
Interested in helping to develop businesses after completing your MBA? Keeping reading to learn more about what to include in an effective business plan.
A business plan is an essential document when trying to convince financial institutions and other investors about the merits of an idea. Research by Palo Alto Software found that entrepreneurs were twice as likely to secure capital for their company if they developed a business plan compared to those who didn’t.
A comprehensive plan should include financial projections based on either the sales results experienced so far or thorough market research. Investors don’t take unnecessary risks, and they need proof that your idea has long-term potential for profits.
Marketing is closely linked to these financial projections, because it’s how you grow a customer base. The business plan should therefore outline a clear marketing strategy, including target market and sales approaches.
A business plan also offers ongoing guidance for entrepreneurs and their employees. It should include a company description, which outlines the exact nature of the product or service being offered and its unique selling point.
This should read like a simple sales pitch, before going into the finer details later in the document. Business school graduates should also create an operational plan, which outlines business details including opening hours and location, and an organizational structure which maps out the responsibilities held by each worker.
Don’t forget to mention company goals and a mission statement too, which remind employees of their purpose in the company. Start-ups face ongoing challenges as they force their way into the market, but a robust business plan is something entrepreneurs can refer to when they think the idea is straying off course.
Whether or not the conventional business plan remains popular among entrepreneurs into the future, graduates of a professional MBA program will always need a comprehensive document to attract investment.
For instance, pitch decks are becoming an increasingly popular alternative in the modern business landscape. Essentially, a pitch deck is a short digital presentation which covers most of the same points as a business plan, including the unique selling point, product/service description, organizational structure, and financial projections.
A shorter, more colourful version of the presentation is displayed directly to investors during meetings, while a more detailed version is shared, usually via email, for them to read in their own time. Prototypes are also often produced and shared during these presentations, so investors can get a closer look at what they’re spending their money on.
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