Business Plan is an essential step while starting a business and/or growing a business. In other words it is an written live document suggesting How to start a Business and/or how to grow a business.
A business plan is different for starter and running business. Both have different needs and different requirements. Business Plan varies company to company. A business plan that is good for one, is not necessary to be good for others.
Prepare your business plan by your own, depend upon your requirements. If you will copy or/and follow other’s business plan then most probably you won’t achieve your goal.
A Business Plan seems to be a complicated process but it’s not. Anyone can prepare a business plan, even a under graduate student can prepare it. We only need to understand about our business model, goal, requirements, market and customer type etc.
Below we will understand about how can we prepare our business plan. Business Plan is important not only for companies but also for wholesale, distribution, retail, chemist, pharmacy and other businesses.
A number of factors affect preparation of a Business Plan. These we will discuss below in article. First discuss about character sticks of a good business plan.
Character sticks of a Business Plan:
A Business Plan should be Short, Simple, Understandable and Updated. These three qualities should have in any business plan.
Keep it Short :
No one likes a lengthy 40 to 50 pages document. A business plan can be written in a single or two page at initial level. After start with this short business plan, later you can prepare a big plan. As big you will make it, there is chances it would be ignored during business planning.
Keep it Simple and Understandable:
It should be easily understandable to your employees and investors. Simplicity makes it easy to implement. It should easily convey about business model, marketing strategy, promotional strategy, customers, future approach etc.
A Business is a learning process and a Good business plan is a live document that must be updated regularly as you know more about your customer, sales and marketing tactic those are useful and those are not. There should always be possibility of amendment and improvement in Business Plan.
How to prepare Business Plan?
A good Business plan includes following parts:
- Opportunities available in market for your business
- Financial Resources (bank, saving, investor etc.)
- Financial Planning (Initial investment, running cost, finance required to stay in market till business start to produce profit)
- Product and molecules list to launch
- Types of marketing/promotion
- Key Customers (Companies, Doctors, Distributors and/or retailers/pharmacies, patients)
- Marketing and Promotional Strategy including inputs, gifts, tours, advertisement etc
- Area and territories covered
- Team member
- Distribution Channel
- How to execute plan practically
- Assumptions and Risks
Summary is extract and/or highlights of a plan. Write in brief about your business plan in summary section.
In opportunity section, write about business scope and opportunities available for you to grow your business. These opportunities may be any customer problem solving product and/or service, unique molecule, key strengths that could beat competition and any other marketing/promotional strategy.
In this section, write about financial resources. From where you will manage finance to start your start-up and/or grow your existing business. Finance source could be your own saving, any bank loan, third party investment etc. Adequate finance is must for starting and growing any business.
Having finance is different thing and using it in good way is different thing. Financial planning includes how you will invest your financial resources in good way. Earning more with less investment is one of the best type financial planning. This section includes how you will invest at products, how much you will invest at office and accessories, running expenses, salary of man power, finance require to stay in market till business generate profit etc.
Products/Services and Molecule to Launch:
This section covers product/services details. Complete product detail along with Brand Name, Ingredients, cost, net rate, MRP, trade rate and selling rates etc. Also highlights molecule/s and/or composition/s that are unique in market. Products that could provide immediate results and products that can be milestone in long run. Every particular that is necessary related to products/services should include in this section. If you want to know how to prepare product list read here
Every business has competition. Competition may be in direct form and indirect form. Pharmaceutical and Ayurvedic market is highly competitive. In this section, you should write about major brand and companies to whom you have to compete to sell your products and services. How you can overcome other brand by giving low rates or better service or timely delivery or any extra benefits.
Types of Marketing:
Before starting any business, you must finalize which type of marketing and promotion you want to adopt to sell your products/services. There are manufacturing company those manufacture products for marketing companies only. Some do only direct marketing. Some do both marketing type. It depend upon you how you can easily sell or establish or grow your business. Generally used marketing types are third party, contract manufacturing, loan licensing, ethical, generic, pcd, franchise, over the counter etc. Read in detail about Marketing type here
Every type of marketing has different type of key customers. In third party/contract manufacturing, marketing companies are key customers. For Ethical marketing, Doctors are key customers. For distributors, chemists are customers. Before making a business plan, you have to research about your key customers. One marketing type may have one than one key customers.
Marketing and Promotional Strategy
Above you have written marketing types, in this section you need to write in detail about your marketing and promotional strategy like marketing through medical representatives and/or online marketing, promotional inputs, gifts, tours, advertisement etc. Some special highlights that makes your marketing strategy unique from others.
Area and Territory Covered:
Small businesses and start-up generally starts with small investment and small area. In this section, Area and territories covered initially and future expansion is written down. How many person will cover a particular territory also will be mentioned in it.
Sales persons and staff member required for starting a business and/or growing a business is also an important part of business plan. Team members are not less than any financial resource. A good team can achieve any thing in world without any major resources. Number of sales persons and office staff you require initially. Their salary and other expenses.
Distribution Channel is an important part of any business. If a business fails to deliver a product/service at required time to customer, its all efforts met with failure. You can include one or more distribution channel in your business plan. For example a manufacturing do third party manufacturing as well as ethical marketing. Its distribution channel will be B2B as well as CNF, wholesale and retailer type.
How to execute Plan?
You have build a plan on paper. Now you need to execute it at ground level. All thing you have now – work force, finance, product, marketing strategy etc. How will you take it at ground will be covered by this section. How you will start working, from where you first start, who will take initiative to launch first, where will be your major concentration at start etc.
Assumptions and Risk:
We make some assumptions in business always. Our plans are also assumptions. These assumptions creates some risks. Suppose you planned a Doctor A will prescribe for you within one month if you visit him but unfortunately he is out of city for more than two months when you launched. As number of assumptions convert into reality, minimum chances of risk or vice-versa.
Factors Affecting Business Plan:
- Financial Resources
- Business Model
- Goals and Requirements
- Market Coverage
- Marketing Type
Finance is blood for any business. Before preparing a business plan, accurate data of financial resources should be calculated. Financial investment should be channelized to get maximum profit with minimum investment.
Products investment, marketing and promotional investment, investment at work force etc is to be considered before preparing a business plan. In starting and/or small businesses don’t have much resources to promote or launch at products at high level. So there should be planning according to financial resources.
We can’t prepare a same business plan for marketing company and manufacturing company. Both of theses have different requirement, goals, customer type, market etc. Likewise retail and distributor business plan wouldn’t be same. Like wise ethical and generic marketing model will have different business plans.
Goals and Requirements:
Future development goal and requirements for achieving these goals affects business plans. As business grows, goals and requirements change. Business plan keeps amend according to goals and requirements.
You cover one area or district or state or more affect your business plan. Big area requires big resources, big work force and big goals & achievements.
How and where you promote and market your products, what is your customer type, what inputs you use to market your product directly affects business plan. Promotion through digital marketing, books, news paper, tv etc makes big difference in financial budget and business plan.