Business Planning For Startups – Need & Importance!

Premium lifestyle, mushrooming investor focus and knowledgeable background has led to the birth ground for many startups that have shaped India’s startup ecosystem from scratch. And we cannot deny that, isn’t it?

So moving on, do you know why you are here on this page? Well, to actually get some light on why business planning is one of the most crucial elements for a startup.

Firstly, if we talk about planning, we all know that planning is very important in any phase of our life – whether it’s a short vacation trip, planning a wedding or setting up a business. It helps one stay prepared for facing any untimely situation and alleviate losses, if any & most importantly frame your idea into a scalable & profitable business. Therefore, when you set up a business, it is important to draft an efficient and effective business plan. 

Before understanding why business planning is important, let us first look at defining what is business planning? You can say that it is a roadmap, we are going to be in the business for the next 20, 30 or 40 years. So, we need to know, what is it that we are selling? What is the problem that we are trying to solve? Who are we trying to serve?

An entrepreneur is most of the time fighting as a one man army, managing everything on their own with very little management and making all decisions alone. They tend to deviate from their vision and mission, they tend to lose focus from their objectives set in the beginning. It is here that a business plan will help an entrepreneur like you to balance everything and keep things in order.

Here are the top 10 benefits of business planning for a startup:

1. Connects the dots to give a clear picture
2. Helps you build focus
3. Set Priorities
4. Incorporate & manage change
5. Develop Accountability
6. Manage Cash
7. Strategic alignment of business ideas
8. Set Milestone Goals
9. Metrics that help track & analyse
10. Set reminders to stay on track

Now let’s talk about why is business planning important?

Let me share with you 12 fundamentals of Business Planning

Let me share with you 12 fundamentals of Business Planning

The first goal is to understand what is the problem in the market that people are suffering from? And something that your business can help them solve.

Second part of the business plan is to understand that what are the existing alternatives? What is it that people are doing currently to solve these problems?

Third is what is the solution that you have as a business to solve these problems for them? What is the unique innovation that you bring on the table?

Fourth is, what is the consumer segment that your business can have and for whom your business can really be a perfect solution and a perfect fit? Who really needs your product or services.

Fifth is early adopters! These are actually people who you think would easily buy your idea or be the first ones who would actually need the product according to you. They are basically the ones with the characteristics of your ideal customers.

Sixth is, understanding what is your unique value proposition? With so much clutter in the market & so much of competition what makes you different? And why will someone pay attention to you?

Seventh is what your high level concept is? A high level concept is required when your business is just on the paper or it is just in the form of an idea. In this case, how would you actually convince the investors, friends, family and people around you? And more than convince, actually explain what the business is all about. Also what is the business strategy & process that you are trying to ape or adapt.

Eight is your unfair advantage! Now it is really very difficult to get an unfair advantage on the first day of your business. It ideally comes over time. But a business plan atleast gives you direction as to what an unfair advantage could be. It could be getting a patent for your brand or creating an entry barrier for competitors.

Ninth is your cost structure. So a business plan will help you budget your investments, your plans, the money involved in actually creating, developing, maintaining and sustaining the business.

Tenth is your revenue streams. Every business ultimately needs to have money in return. So, what are the ways in which you will generate revenue from your business? What are the revenue models? What are the revenue streams?

Eleventh is your key metrics! Key metrics are, I would say the benchmark, or I would say the break-even point that you need to know that will help you sustain the business. Break-even point is the first part and the second part is that if you want to be successful, you should have some numbers in your mind so that your goals are pretty much numbered and eventually sorted.

Twelfth and the last one is the channels! Channel is ideally how are you going to tell your customers that you exist? What are the ways they will know about you – is it going to be through any e-commerce or any form of broadcast media or digitally through social media, or through an offline format or door-to-door? How are you going to reach out to them and actually make them experience your product?

Well, these are the elements that are necessary before you actually put in your time, money and energy into making a business. I would suggest that please do have a business plan in place before you actually jump into becoming an entrepreneur!

In the long run, a good business plan will not only help all you entrepreneurs to focus on the specific steps necessary to make your business ideas succeed, but it will also help you achieve both your short-term and long-term objectives.

So, whether you’re just starting out, growing your business or seeking help from any thought leader, a well-thought-out business plan is the vehicle you need to get you there. Doesn’t matter you take a fast local or a slow one, all that matters is you land in the correct destination. So, what are you waiting for? Get set to take that ride with a solid business plan! Start thinking and take an action today.

Do share your thoughts in the comments below! Planning to get set with a super healthy business plan? Reach out to your Business Nutritionist, Nishita Mantry at nishita@nishitamantry.com