What is a business plan?
“A successful business plan is like baking a cake- You got to have all ingredients in the right proportion” – Elon Musk. Business plan is a written document, mainly for a startup, that includes detailed study of market, finance and operations, to make business have commercial viability. Business plans acts like a guide for owners to setup and run their businesses. In simple words it is a roadmap for your business that shows where your business would be in next 3 to 5 years.
Below are key points that should be included in to write a sound business plan.
Market analysis/ research
Thorough knowledge of the industry you choose is a prerequisite. Do analysis of the local market, target customers & competitors offering. You should know the demands and the preferences of the target audience. Listing the strengths and weaknesses of your competitors will prepare you to have an edge. This study enables to know the current trends & themes that are successful. Business success will be highly depends on market analysis and research activity and one of the key factor writing business plan.
To be successful in business, it is imperative that you have financial projections for at least 3 years. It is also important to build a safety net for your startup which will be equally important as business financials. Financial projections normally include details like income statements, balance sheets, cash flow statements, and capital expenditure budgets. For a startup it’s advisable to have quarterly or even monthly projections.
If your business required any financial assistance, it will be part of your business plan sheet. In this sheet you should provide details about financial requirements to setup and successfully run your business. Prepare an itemized summary of how start-up capital will be used, along with timelines for your funding request. Make financial statements with the help of professionals to support your request. Include projected financial data with balance sheets, cash-flow statements, profit and loss statements, and expenditure budgets. Prepare monthly and quarterly projections of full year in detail. Make cash flow projections for at least 3 years or until stable growth rates are achieved.
Company legal structure
Depending on the target audience, you can choose to have your business setup in the mainland or in the free zone. For instance, if you want to focus international market with limited focus in the retail market of UAE, free zone would be a good option. On the other hand if your target segment is the local market of UAE, mainland license is the best choice. Also, identify the legal structure such as Sole Proprietorship, LLC formation.
Products and services
Describe in details about your product and services, what you sell or what service you intend to offer. Explain how it will benefit the customers and the product life cycle. As the name suggests, your business plan should have the list of products / services you would provide to your client and the source from where you would be importing if it’s a product. Also, don’t forget to put timelines as to when and how you would like to add more products / services. Above all the price range of the products and services you are looking to offer should also be included in the plan. This will enable you to arrive at the breakeven point of the company.
After the activity description, the next most important feature of business plan is the number of employees you wish to have and the organizational hierarchy. The organizational structure should also depict employment plan for the initial 3 years such as permanent employee requirement as well as on demand / outsourced work requirements which initially beneficial for startups.
Sales and marketing plan
The ultimate goal of any business is to attract the audience towards your product/ service for which you need well-defined sales plan in place. There are many ways to penetrate in the market and manage growth – Active presence on social media sites, print media, marketing on billboards, flyers, having business development managers, etc. Marketing plan playing major role in any business success but for startups due to limited resources, they can target the most cost effective platform specialty digital and commercial partnership.
How to make a business plan
Writing a business plan in Dubai can practically prove to be very organised and extensive thought process. However it is inevitable to have a perfect business plan to make your venture successful. You can either follow the above mentioned points on your own with the access of online data and templates available that can be used as a reckoner or hire a professional to make the business plan for you. Make sure that your business plan is not too lengthy and is clear and simple to understand. It should be free of errors and should be tailored for the situation.
A sound business plan will not only boost the confidence in owners, but also in the lenders. They are inevitable if the startup is looking to raise capital from Banks or Venture capitals or angel investor/s. Business plan also reflects your commitment and knowledge towards your start up. Though business plan is made at the initial stage of business, it should be reviewed and modified from time to time, as the company evolves or every year.
We at Flyingcolour have assisted our clients to prepare Business Plans to submit to government departments or for their own professional use. This blog post is crafted by Ms. Divya, Senior Business Advisor at Flyingcolour business setup, accounting & VAT services in Dubai & across UAE. Call us for a more detail on your business setup enquiry. Please send inquiry to info[at]flyingcolour[dot]com or call +971 4 4542366.