Sanjay Shah the founder of Solo Capital and many finance related companies across the globe is a pioneer in the investment and management industry. This investment guru is also a well-educated businessman who has helped many individuals and corporations devise their business plans. His advice on how to make a business plan more effective and up-to-date for any situation is given below, taken from a number of references and his recent interviews.
So, what are the factors that will make a business plan more apt for a business? First, the plan is a blueprint detailing the business concept. To be effective, it needs to specify how it will succeed, what should be done in order to succeed and the many reasons it will be successful. An effective plan contains the information evaluating the merits of the business. It should have the financing proposal needed to run the operation, identify the amount needed, explain how the financing will be used and suggest the payment schedule if needed as well.
It is crucial that the plan specify the factors in the internal and external environment that will determine the firm’s ability to generate sales and profit. The performance of the firm’s industry is also a strong influence. This means the plan provides analysis of the economic, social, legal and political factors that drive the industry and their impact on the overall performance of the firm. The information collected here should include product and service the industry constitutes of, customers and suppliers of these services, major competitors as well as past performance and future demands of the industry.
Industry analysis is followed by market analysis where the market for the firm’s products and services are studied and the basic factors that define its market are determined. This include the geographic boundaries of the market, specific market niche in which the firm is doing the business, the sales potential in the target market, factors that influence the activity of the firm in the market, the role of sales forecast and so on. Where is the market located? What are the key features influencing the firm’s performance and productivity? What sales volume should the market niche generate for the firm? What is the outlook for the market? How will the firm reach its target market? These are some of the questions that will be answered in the market analysis section of the business plan.