Types of Business Plans
Almost every business requires a business plan of action and strategies to grow efficiently. The business plan gives a clear and detailed line of action. It can be differentiated on the basis of content depending upon the business objectives they want to achieve. We are going to explain six types of business plans and different methods to utilize them.
1. The Startup Business Plan
Every startup needs a business plan that contains detailed steps to start a new business. Not all the business plans are for startups. All types of business at various stages of business needs business plans to operate.
Startup business plan is prepared by new startups to convince the investors and lenders to receive initial funds to initiate. Startup business plan act as an initial plan businesses can shape and alter as the business grows.
The startup business plan includes;
- Executive summary
- Business overview
- Business goals and objectives
- Business products and services
- Market research
- Competitive analysis
- Marketing and sales strategies
- Business financial projection and analysis
- Management team
2. The Strategic Business Plan
Strategic business plan includes all the strategies and tactics business will use to accomplish their business goals and objectives. Businesses lay out plans for the whole business in strategic business plans.
Strategic business plans is a foundational plan for whole business mainly used for internal purposes. For strategic plan, company identifies their strengths and weaknesses through SWOT analysis, to identify what factors can influence business decisions.
Through SWOT analysis, management can identify;
- What types of strategies are beneficial for the business to strengthen the business,
- Overcome the weaknesses and threats, and
- Grabbing the right opportunities.
Strategic business plans is usually different for each business, but it mostly includes;
- Mission statement of the company
- Vision statement of the company
- Main success elements of the company
- Different strategies to accomplish goals and objectives
- Execution schedule and setting deadlines
Setting deadlines will help the company in how the formulated strategies will help company moves towards its goals and objectives. This will include allocation of resources, necessary guidelines and deadlines.
3. The Feasibility Business Plan
The feasibility business planning is done when an already established business is looking for new business venture. For example, producing and launching a new product in new or existing market, or offering current products to new market.
Feasibility business plan gives answer to two questions;
- Who will buy the product or service offered by the company?
- If venture will be profitable enough to offer for the company?
The feasibility business plan requires market analysis and research to determine product or service feasibility in the market. It can be done through crowd-funding, and product testing in the market.
Feasibility business plan includes the sections that describes;
- The product or service need in the market,
- Target audience of that product or service, and
- Required investment and capital
- Necessary recommendations and steps to move forward
4. The Operations Business Plan
The operations business plan comprises of the elements that are associated with the daily operations of the company. It is also known as internal or annual plan.
Operations business plan focuses on preparing daily operational activities that is required to be completed to achieve business goals. It also explains employees, management and department’s responsibilities and their contribution in achieving business goals.
Operations business plan includes;
- business goals and objectives,
- Operations required to achieve them
- Resources required to achieve them
- Staff required to achieve them
- Tracking of the progress
5. The Diversification Business Plan
Diversification or expansion type of business plan is written for external or internal motives. When a business is seeking growth, development and diversification, it requires resources like investments, capital material and employees.
External motives for business plan are to acquire financial assistance from investors and lenders. These types of plans are lengthy. They have a lot of information about the business to help investor in deciding on financing the business.
External motives are written in a way to give the complete information to the reader that is investor or lender. It includes everything in detail similar to standard business plan.
Internal motives are the business diversification is funded by the business own revenues and income. This includes financial projections regarding expenses, sales, revenues, income and many others. But this plan does not require in-depth details.
6. The What-if Business Plan
The what-if type of business plan is written when a company is preparing for worst case scenario. Like if they encounter less than ideal situations. When a business is considering a risky move, they need to have a plan for it and prepare for it.
What-if business plan is considered as an alternative of original business plan and it is less formal than other plans. The worst case scenario can be losing market share, high pricing competition, or any other.
What-if business plan helps management in assessing the potential results of business decisions that can affect overall business. For example, increasing workforce, increasing product prices, installing a new equipment or any other.
Here we conclude types of business plans. Business plan has huge benefits on overall business and its performance. Business plan provides a bigger picture of the whole business, through which you can easily make strategies and set goals.
Each type of business plan helps the different types of businesses in setting their goals and objectives. It also helps through different problems, formulating strategies and it is greatly based on the research and analysis.
Types of Business Plan FAQ
1. What are types of business plan?
There are six types of business plans;
- The Startup Business Plan
- The Strategic Business Plan
- The Feasibility Business Plan
- The Operations Business Plan
- The Diversification Business Plan
- The What-if Business Plan
2. What are the 3 main purposes of a business plan?
The 3 main purposes of a business plan is to;
- generate effective strategies for business growth
- analyze any financial assistance required in future
- attract investors and lenders to fund the business
3. Why you need a business plan?
Business plan can help businesses in getting funds or partners. It will show the investors and lenders your business financial growth and so that they will recover their investments.
It can motivate your employees and investors, that investing their time and money in your business will be fruitful for them.