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 ?

Priya Chetty

Partner at Project Guru
Priya Chetty writes frequently about advertising, media, marketing and finance. In addition to posting daily to Project Guru Knowledge Tank, she is currently in the editorial board of Research & Analysis wing of Project Guru. She emphasizes more on refined content for Project Guru's various paid services. She has also reviewed about various insights of the social insider by writing articles about what social media means for the media and marketing industries. She has also worked in outdoor media agencies like MPG and hotel marketing companies like CarePlus.
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