It's not all about profit when it comes to a business plan.

When making a business plan many believe that if the stats show the tremendous amount of profit through a business it would make the business plan obsolete and would easily get investors. This ideology is wrong and one shouldn’t shelter it. One must always consider “all going wrong” situation and then create a business plan. If you have a plan that could yield a high profit but you don’t have the fail safe contingency plan for loss assessment than the plan is as good as a project for school/college competition, cause no matter what the plan is it’s just for assessment purpose and will not be followed. However if you include protocols to limit your losses in “all going wrong” situation then the plan would seem effective and will capture the attention of investors cause then they will have a comfort of assurance for when things go south. Remember, Inventor invented the Airplane but a pessimist invented a parachute. Now, ask yourself how safe would you feel flying in plane that on paper says will fly smoothly and has no parachutes in it? Besides of how much profit a business would yield, there are factors that decide the potential of a plan. Believe it or not but these factors are a lot more concerning than how much profit you can make out of a business.

♦ Going Concern Concept.

As an entrepreneur you must be aware of a concept of commerce known as “Going Concern Concept” according to it when someone (An entrepreneur) is starting a something he/she starts with hope and assumption that it would remain business for foreseeable future and it would not be subjected to halts and assets liquidating. To follow this concept a business plan requires all sorts of evaluation of aspects through which a business might could or would face the resistance in its growth.

♦ Competitive Analysis.

Many misconstrued this concept of analysis and believe it only has to do with know what and how the competitors are doing business. Well! It’s not completely wrong but it’s not complete either, it’s just a part of it. It is necessary to analyse what the people who are already in business are doing and how they are doing it. Their failures will be your lessons and their success could be your path, but competitor analysis is much more than that. It doesn’t only provide analytical stats about your existing competitors but it should also be open to ideas that there will be another new competitor in future.  This analysis will educate you about what to do when a new competitor comes in the play with what would seem like better plan then you cause let’s not close eyes to the fact that world and it’s tech is evolving on daily basis. So to cover yourself from the effect of another competitor coming in play this competitive analysis will make you flexible to improvisations and resource management.

♦ Exit Strategy.

This is not just one of the most but it is the most important part of a business plan. Exit strategy is what devises you to control your losses and get out while you still can. It’s harsh but it true that the chances of a business flourishing now a days are way to slim as compared to last century. Everyday evolution in technology has made the market a lot more volatile, you may buy a piece of machine now but its highly probable that a new machine with better tech would be available in market soon enough. But there are start-ups that don’t depends on machines but one way or another every start-up is affected by technology for better or for worse. So to limit your losses exit strategy must be in place. Exit strategy is what you plan to do when you hit a certain low. It’s most important because when you start a business and it hits the ground your mind loose the sight of big picture and the stress makes you make rash decisions, but having a devised set of protocols at the very early stage of business prevents you from making wrong decisions at the time of your loss. Exit strategy doesn’t necessarily contains the steps of how to get out by closing and liquidating your funds but before that it contains of how to optimize your strategy to have a shot at surviving in market.

Remember an entrepreneur should be an opportunist and optimist but most of all he should be pessimist.