Business Plan

Business Plan is required mainly for the following purposes:

• Lenders and Investors want to see a logical and coherent plan before putting their money at risk
• Statutory Permissions / Approvals are accorded on Business Plan

Importance & Benefits:

1. Business Plan – will force you and your team to think through all the elements of your business
2. Trusted and experienced outsiders who review your initial plan & identify your weakness, missed opportunities, un-supportable assumptions, overly optimistic assumptions in your Business Plan on paper – can and will then improve your prospects and reduce the probability of rejection and chance of operation failures
3. How much you can afford for personnel & other expenses, target customers and success factors
4. It is also a Budget vis-à-vis Result projections. It will induce you to investigate for corrective measures – if there is deviations.

Why some business plans fail

• Goals set by the Entrepreneur are un-reasonable and unrealizable.
• Goals are not measurable
• The Entrepreneur has not made total commitment
• The Entrepreneur has no experience in the planned business
• The Entrepreneur has no sense of potential threats or weaknesses
• No Customer need was not established for the proposed product or services.

A Business Plan is meant for stakeholders:

1. Employees
2. Investors
3. Lenders
4. Suppliers
5. Customers
6. Consultants

Business Plan focuses on  The Entrepreneur’s 5 “C”s – which Investors/Lenders assess :-

1. Capital   -    How much is the Capital of Entrepreneur ?
2. Capacity -   Is the projected Cash Flow realistic & adequate ?
3. Collateral – What are the securities being provided ?
4. Character – Is the Entrepreneur trust-worthy ?
5. Conditions – Is the external condition conducive ?