Running a business without a plan is like driving a car blindfolded. It’s extremely risky.
Unfortunately, there are still many businesses that do not make a business plan at the start of their start-up.
Even if you think you are a great businessman or have a business idea with an excellent product, you will not be able to go far without a roadmap, in the form of a business plan.
What exactly is a business plan? Here’s an explanation, including its purpose, types, and essential elements.
Understanding Business Planning
Business planning can be defined as a guide for a company to operate and achieve its goals.
In this written document, the business goals and objectives will be outlined, as well as a blueprint for daily business operations and key functions, such as marketing, finance, and expansion.
Every new business should have a business plan before starting operations. This is especially true if you need additional capital from banks, which often require a business plan before considering a loan.
However, even if you don’t need additional funding, having a business plan is still necessary to stay focused on your goals.
According to research from the University of Oregon, businesses that have a plan grow 30% faster than those that don’t.
An article in the Harvard Business Review also stated that entrepreneurs who write a formal business plan are 16% more likely to achieve survival than those who do not.
The Purpose of Making a Business Plan
1. As a guideline in running a business
The main purpose of business planning is to be a guide in determining the goals to be achieved and to be a guide in making decisions when facing problems or obstacles.
2. Determine Vision and Mission
By having a vision and mission, which should have been created from the start before the business runs, you can run the business with more direction and focus on the goals you want to achieve.
3. Minimize the Risk of Failure
No business is without risk. Therefore, by having a business plan, you can minimize the risk of failure. You can also learn how to overcome existing challenges and turn them into business opportunities.
4. Analyze the Market and Competitors
With careful planning, it’s easier to enter the market and analyze competitors or businesses in the same field. This way, you’ll be able to better understand consumer desires and dominate the market.
5. Get More Profits
What business doesn’t want to make a profit? This is where business planning plays a crucial role, as it can determine the right sales strategy and attract more customers.
6. Predicting Business Results
Having a plan before starting a business can help you predict business outcomes, such as profit, loss, cash flow, and so on.
By knowing this, you can be more motivated to run your business because you already have an idea of the targets you want to achieve.
What are the important elements?
Although expert opinions differ, the following are important elements that are generally present in business planning.
1. Business Description
This is necessary to explain what business you will run and a broad overview of the business idea you have.
So, potential investors, business partners, as well as teams and employees can more easily understand the business concept that will be implemented.
2. Marketing Strategy
This component plays a crucial role in understanding your competitors’ strengths and weaknesses. Once you understand this, you’ll better understand what opportunities you can exploit to meet market needs.
3. Market Research
This component can help you understand consumer desires, related to tastes and the products they need.
Conducting good market research can help you better understand the market segment you are going to enter.
4. Implementation in the Production Process
After carrying out the three important elements above, now is the time for you to implement the results of the research and planning that have been made.
Start implementing business planning and continuously monitor its performance to ensure that the business is growing according to plan.
5. Product Monitoring
Once your business is up and running, pay attention to whether the products or services you create are well received by consumers or not.
This method is carried out with the aim of evaluating existing deficiencies and maximizing sales.
6. Operational Management
Business planning cannot be separated from operational management, which includes the arrangement, use and management of raw materials, which is followed by the production process.
Jangan lupa juga dengan manajemen pemilihan sumber daya manusia yang berkualitas, yang tidak kalah penting untuk keberlangsungan bisnis yang efisien.
7. Financial Planning
When starting a business, you’ll naturally need to estimate costs. With this financial planning, it’s easier to understand your capital, profits, losses, and other financial matters.
8. Evaluation
This is the final component of business planning, and its purpose is to review the plan’s readiness. If the evaluation is positive, the implementation process is likely to proceed smoothly.
So, have you created this all-important business plan? If not, now’s the time to start.
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