How to Write a Business Plan for a Small Business in India

A business plan is not a thick document for investors. For a small business it is a few pages that answer: what will I sell, to whom, how much will it cost to start, how much will I earn each month, and when will I recover my money.

The nine sections

1. Summary: five lines covering the business, the customer, the money needed and expected first-year results. Write it last.
2. The business: name, legal form, products or services, location and hours.
3. Customers and market: who buys, what problem you solve, how many such customers are nearby.
4. Competition: three nearby competitors, their prices and how you are different.
5. Marketing and sales: how people will find you, launch offer, first targets.
6. Operations: suppliers, staff, equipment and licences (Udyam, GST, Shop Act, FSSAI, trade licence as needed).
7. Money: startup cost, own funds, loan, monthly fixed costs, forecast and break-even.
8. Risks: what could go wrong and what you will do.
9. Milestones: month 1, 3, 6 and 12.

Estimating sales without guessing

Use customers per day × average bill × days open. A cafe with 25 customers a day at ₹240, open 28 days, sells about ₹1.7 lakh a month in its first month. Visit similar shops at different times and count customers. Start low in month 1 and grow slowly.

Costs in two groups

• Startup costs: deposit, interiors, equipment, opening stock, licences, launch marketing, and a cash reserve for three months.
• Fixed monthly costs: rent, salaries, power, internet, marketing, loan EMI.

Variable costs, such as ingredients or stock, move with sales and are usually taken as a percentage of sales.

Break-even and cash

Monthly profit = sales − variable costs − fixed costs. The first month this turns positive is your break-even month. Just as important is cash: add up profits and losses month by month from the money left after startup. If cash goes below zero in any month, the plan does not work yet.

Make it believable

Banks and partners trust plans that are conservative, show where numbers come from and list risks honestly. A plan that shows profit in month one usually raises doubts.

Our Business Plan Template for Indian Small Business has a Word plan with the nine sections and an Excel planner that works out the forecast, break-even month and lowest cash point.