Essential Business Plan For Start-ups – Individual Hoshin Plan – Part 1
There are innumerable articles and templates for preparing a business plan for start-ups. But what I found is that most of them are too exhaustive and so a strong de-motivator for an enthusiastic individual who wants to pen down his ideas and present it to his potential investors/advisers.
Immaterial of the scale of the business viz., financial size or employee size, the below business plan is a good starting point. When one has got this right, a large part of planning has been accomplished. Depending on one’s purpose, additional information and more details can always be added.
Being simple and providing essential elements, this business plan is called as Individual Hoshin Plan. The name is derived from ‘Hoshin Kanri’, a Japanese methodology of policy deployment used for several large corporations to successfully deploy their strategies on the ground.
There are pre-requisites to writing this business plan. Depending on whether this is being written for an existing business of a big company or by an aspiring entrepreneur, the quantum of information available may vary. For more details about the pre-requisites, check out ‘What I need to have before writing a good business plan’.
Unlike many other sites, there are no free templates that I am going to offer, that you can download and start filling. I’m sure you will understand that writing a business plan isn’t as easy as filling a template. It’s more about thought leadership and flushing ideas to workable strategies.
There are 5 sections which have been logically split. Following are the key elements of an essential business plan:
- Business Vision – A good vision is drawn for a period of 3-5 years. So it is medium to long term. In essence a good vision should explain ‘What are you building?’ So it can be expressed in terms of objective, scale, profits, etc. It should be concise and expressed in 3-4 bullets
- Business Mission – Yes, this answers the question ‘Why does your business exist?’, so it talks about how uniquely you want to provide value to your customers. In future this will help you prioritize diversifications, alliances, etc. And more than all that, after setting up the business, you customers still sense value in your product/service, then its not going to be long before you will wind up.
- Annual Objectives or Measures of Success – ‘What will you measure in your business?’ – Something this can helps you to quantify business vision and mission.
- I) Strategies – Strategies are your broad approaches of how you would accomplish your Business Vision and Mission. So it addresses What, How and Why aspects of your business model. It is advised to complete this section as a group and involve a facilitator who can guide you through this sector.
Key areas to cover in defining strategies are:
- II) Benchmarks (Who will you want to be in next 5 years)
- III) Services (What are the services you are going to offer in first phase)
- IV) Proposition (How will your package your service and offer them to customers so that they get a value)
· Positioning (What will you want your customers to know you for?)
· Revenue Model (What are your sources of revenue)
· Marketing Strategy (How will your market your brand and services)
· Alliances & Intermediaries (How will help your get new sales leads)
· Sales (What are your sales channels?)
· Diversification ( What would you want to diversify in the next 5 years)
· Talent Management (Your approach on managing talent – Recruiting, Retaining & Remuneration)
Section 3,4 & 5 will be covered in Part 2 of this series of 2 articles.
[Guest article by Nilakanta Srinivasan of Collaborat.]