BUSINESS PLANNING GUIDE
A business plan is not a formality for the bank. It is the cheapest way to find out, on paper, whether your idea can make money before you spend any.
By ARS Market Research Services, Chennai. Works for any small business, in any country.
Why write a business plan at all?
Many first-time owners skip the plan and start with an idea and some savings. A short written plan forces three useful questions: who will pay, how much will it cost me every month, and what happens if sales are lower than I hope. Banks, grant schemes and investors ask the same three questions, so a plan you wrote for yourself also becomes the document you show them.
The 9-part template
1. Summary
One paragraph: what you sell, to whom, how much money you need and what it will earn. Write it last.2. Customer and problem
Who exactly buys? What problem do they have today and what do they do about it now?3. Market
How many such customers are within reach of your shop or website? What do they pay now? See our market research guide.4. Your offer and price
What you sell, why customers pick you over the nearest alternative, and your price.5. Getting customers
Your first 10 customers: where you find them and what each one costs you to win.6. Operations
Location, equipment, suppliers, licences and who does what each day.7. Team
Who runs the business, what skills are missing and who you will hire first.8. Money
Start-up cost, monthly costs, expected sales, profit, and the month you break even.9. Risks
The three things most likely to go wrong and your backup for each.A worked example (illustrative numbers)
Take a neighbourhood home bakery. These figures are an illustration to show the method, not a forecast for any real business.
| Item | Illustration |
|---|---|
| Start-up cost (oven, tools, licence, packaging) | ₹3,00,000 |
| Monthly fixed cost (rent share, helper, power) | ₹40,000 |
| Average order value | ₹500 |
| Direct cost per order (ingredients, box) | ₹300 |
| Left per order after direct cost | ₹200 |
| Orders needed each month to cover fixed cost | 200 orders (₹40,000 ÷ ₹200) |
The plan now asks one plain question: can this neighbourhood give me 200 orders a month, about 7 a day? If you can show that with a small survey of 50 neighbours, the plan is credible. If not, change the price, the place or the idea before you spend the ₹3 lakh.
Test your plan against a bad month
Cut your expected sales by 30% and recalculate. If you can still pay your fixed costs from savings for three months, the plan is safe enough to start. If not, reduce the start-up cost or begin part-time.
Common mistakes
- Writing ‘everyone’ as the customer.
- Copying sales figures from a successful friend instead of measuring your own area.
- Leaving out your own time and the cost of a bad month.
- Forgetting licences and registrations, such as Udyam registration in India.
Where to get free templates and support
The US Small Business Administration publishes a free plan guide at sba.gov. In India, Startup India and MUDRA explain schemes and loan requirements. Read the official rules before you apply.
Want real numbers behind your plan?
A plan is only as good as its customer and cost figures. ARS Market Research Services runs feasibility studies and local customer surveys that give you those numbers from the field, so you decide before you invest.
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Our four practical guides explain licences, loans, schemes and low-investment ideas in plain language: see all books. For ready-made market reports, visit the ARS Marketplace.