Purpose of a Business Plan and Its Examples- Building a business, it is advisable to start with careful planning. Every plan that is done is the preparation of steps so that the business can run smoothly and can avoid the risk of failure. Careful business planning can also be a strategy so that products sell better in the market.
Every business will need a business plan every step of the way. Even for a home business type. Every business detail is written in the business plan so that the goals and vision of the business are easier to achieve and avoid the risk of bankruptcy.
Definition of Business Plan
A business plan or Business Plan is a document that contains the objectives of the business and how to take steps to achieve these goals. In the business plan, there is also a time period for achieving these goals to make it clearer and more detailed.
For a home business, it is still important to make a business plan. In a business plan for a home-based business, making it is simpler than a corporation. But business is business. Writing a business plan should be made for a great purpose regardless of the type of business.
Purpose of Business Plan
Just like writing other business plan details, the main purpose of a business plan is to provide a roadmap, clarify what to focus on, and know the business projections going forward.
1. Provide a Roadmap
A business plan is actually a map or roadmap for running your business. With a business plan, you can run a business in stages starting from what your business vision is, how you can realize your vision, who is your target market, in what segmentation, and matters related to business operations.
2. Clarify Business Focus
It is not uncommon for business owners to have difficulty running a business. Having a business plan will help clarify the business focus. With a clear focus, business owners can stick to the line of business that has been created before.
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A business that has a clear focus will find it easier to achieve your target or business vision, you can say that this business plan is a brake or evaluation material if the business you are running experiences problems or overestimates.
3. As proof of seriousness
A business plan is not intended for you as a business owner but is also useful for stakeholders or investors who will support your business. A business plan can certainly be an identity for your seriousness in running a business.
A business plan can also be considered by investors to support your business. In addition, a business plan is also useful if you want to apply for a business license or interact with suppliers.
Example of a Business Plan
Why do home businesses still need a business plan? First, as already explained, the business plan is intended as a brake or reference in your business. Home businesses that do not have a clear organizational structure are very prone to overestimating or misjudging so that they get out of focus.
Second, home businesses often find it difficult to control finances, so a business plan is very useful as a reference in making expenses and also utilizing assets.
Third, branding. Because a home business needs a brand, this is where the business plan comes into play. By creating a business plan, you can choose what strategy is the best but also doesn’t cost a lot of money but is still effective in strengthening your brand.
We’ll take the cake home business plan example as a case study.
1. Create an Executive Summary
The executive summary contains business objectives and identities including logos, products sold, packaging, organizational structure, who is the founder, to the production location. Here everything about your business is discussed in full.
The following is the order of arrangement:
- The background includes your vision, mission, jargon, and what you sell
- Products (starting from uniqueness, taste choices, product menu, and packaging)
- your business logo and brand (color and shape)
- Organizational structure
- Production processes and locations
2. Market Analysis
In market analysis there are several points that you need to pay attention to, namely;
- SWOT analysis – What strengths, weaknesses, opportunities, and threats do you have in your business? In this section, you will detail your product, from the superiority of the cake product to the threats of your product in the future.
- Who is your target market demographic, socio-cultural, geographic? For example; which areas are willing to sell, through what channels your products will be sold, and who is likely to buy your products.
- What is your market segmentation?
- Where is the position of the product that you will sell in the existing market competition?
- Who are your competitors and compare with your SWOT business? – Here you can describe your business competitors. At this stage, you need in-depth research on your competitors and even how much profit per month if possible.
3. Production Analysis
Production analysis is made to determine production capacity and how to meet the needs of the target market with existing production capacities. This is useful so you don’t overestimate.
Production analysis also includes marketing plans, suppliers, and stock management, to risk management.
For a marketing plan you need to pay attention to the following things:
- The choice of the most effective marketing media for you today. It means when you first set up this business. Do you just need word of mouth? or word of mouth. Do you need digital marketing? like SEO, Instagram content, or even paid ones like Facebook ads or Google ads?
- Sales funnel. How can consumers interact with you? Is it only through Whatsapp? Facebook? Instagram? Or through an online marketplace? Or even visit your production site?
For a home business, the marketing plan above is the basic thing that needs attention. What about supply management? In a business plan, you also need to write down who your suppliers are and also must include prices and considerations for choosing that supplier.
In addition to supplier problems, you are also required to record supply management, for example when raw materials must run out within a certain period and when you will supply new raw materials, and also the turnover of raw materials within a one-year operational period. Everything must be written in the business plan.
Risk management also needs to be considered, for example in the event of a production accident such as a cake that is burnt or fails, consumer complaints, to the worst things such as poisoning you must consider and write down in a business plan.
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4. Human Resource Analysis
In this section, you can write about how many employees you need for your business in order to meet customer demand.
This is also useful for adjusting the turnover of your product according to the number of resources available.
5. Financial Analysis
In a home-based business plan, it is not really that different from a large corporate business plan. It must contain an estimate of the budget and cash flow in the initial three years of production, and also the most important thing is the analysis of return on investment (RoI) and also the net present value (NPV).
NPV and RoI analysis is useful as an assessment of whether your business is feasible or not. RoI itself analyzes when your business will pay off. Suppose your projected return on investment occurs after three years. If it turns out that in the calculation, there has been a return on investment more than the projection time, then your business is considered unrealistic or failed.
The appendix contains each license from your business. However, if you are a home business in the field of cakes, in the attachment to your business plan, you can include halal certification or BPOM (Food and Drug Supervisory Agency).
In addition, you can include photos of your products, menu designs, packaging designs, production processes, and the materials used.
That’s an example of a home business plan and the important points you need to pay attention to. Apart from a business plan, one thing you need to think about when starting a home business is long-term investment related to technology, especially in managing your business finances.