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Approach to Business Plan:

Making a Business plan is always interesting and challenging at the same time. It throws an opportunity to the scholars to practically approach a real idea. Some of us always have ideas in mind and this is a platform provided by the universities to work on their own ideas. Business plan may be small or big as well as service or manufacturing.

As discussed above, doing the same is always challenging. However the fun part is that most of the plan is based on your realistic assumptions. The best way to start is to imagine the real business and understand the setup requirement. Give yourself time to understand what are the basic necessities to setup the business idea. List down the important cost aspects and break it down in two parts. One part should be the pre incorporation cost also known as the capital expenditure. The second part is the operational expenditure to run the business smoothly. Some examples of capital expenditure includes: renting or buying a property (maybe office space or factory area), legal setup cost, developing the infrastructure including cost like computers, air-conditioning, creating sections, room plan etc. If any material purchase is required before setup, it will also go as capital expenditure. On the other hand, there are costs involved on ongoing basis mostly required after setup. Such costs includes salaries, wages, marketing cost, transportation cost, rent, electricity etc.

Once the cost is established, one can easily make the 5 year projection with some costs increasing with increase in sales.

This approach helps you get the idea of the entire project in your mind even before you start writing on it. Hence it helps you justify every section and assumptions in logical and connected way.

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