Step By Step Guide for NBFC Business Plan
A NBFC business plan is a potent tool to layout the foundation of a company. It not only helps the company to set short and long term objectives but also gives a source of direction to achieve them. A good business plan acts as a road-map that guides the company in each phase and reminds directors about the vision and financial goals. Having a well-structured business plan means the company can prioritize actions that require regular checks from higher authorities. Every business needs to frame a plan before undertaking the course of employment. NBFC business planning is a vast concept that consists of an executive summary of the company’s vision, business structure, market size, promoter background, products & services, growth aspect, etc. To draft a proper business plan, one must seek professional help.
Reasons to have an NBFC Business Plan
Lately, there has been an enormous growth in the NBFC sector, and it got acknowledged as an essential component of the financial system. India has more than 11,000 NBFCs, which demonstrates its importance. They play a dominant role in the development of different aspects of our society like transport, core infrastructure, employment generation, economic development, wealth creation, finance to economically weaker sections, and contribute to the state exchequer. Since NBFC regulates the financial position of India, it is of utmost importance to create a business plan for the same.
Benefits of NBFC Business Plan
Apart from keeping track of day to day business operations, you can leverage various benefits from a great NBFC business plan like:
- Gives an overview of the whole business– Once the business planning is done right, one can interlink the dots to get a clear picture of the entire prospect. NBFC business plan covers every phase, from sales to marketing strategies. Moreover, it provides a precise view of your services and products, whether they are right for your target market or not. It also reckons the total cost inclusive of product development, working capital requirements, and long-term fixed costs.
- Helps setting Priorities– Running an NBFC is not as easy as it may seem; one needs to balance the time, effort, and resources in a strategic way. Only a business plan can help to stabilize the functions of your NBFC and set priorities accordingly.
- Optimize productivity- Things turn out better when planned; therefore, to trace the progress of your NBFC towards the desired objectives, you have to frame a business plan. A perk of having a plan before taking any action is that it will provide an actual analysis of your work and help you meet your goal.
- Manage cash flow– The domain of a Non-Banking Financial Company revolves around cash; thereby, the management of cash flow becomes indispensable. The acquisition of stocks, disbursement of loans and advances, shares or bonds, repayment of debts involves planning and management. An NBFC business plan can resolve any hindrance in the financial system and enable a smooth flow of cash.
Steps to follow for an effective NBFC business Plan
Now that you are well-versed with the advantages of a business plan, you must be eager to frame one for your NBFC. So here is the list of steps you must follow for a successful NBFC business plan:
Prepare a draft of Services – create a list of products & services which your company will provide, also mention your target audience in the business plan. After drafting the plan, you have to analyse your product with its value in the market.
Get Started- Review some samples of the business plan available office or online in the Service Corps of Retired Executives website and other sites. Such business plan template forms will give some additional information that you can replace in your draft.
Create your Company’s Description- After specifying the services and products, you have to write a detailed description of your company. This section must include the purpose, mission and vision of your company along with the information about your company’s formation. Furthermore, mention the geographical markets in which you have served, achievements till date, and lastly, the current status of your NBFC.
Build an annual expense budget- Even if your company is an NBFC, it is crucial to build a budget and have sufficient capital so that you can provide financial help to others. Estimate the annual budget required for sufficing the business needs. Contemplate if your business idea has the potential to achieve desired outcomes and create a cash flow forecast for the same.
Executive Summary- It is a prominent step in creating a business plan. Executive summary brings together all of the elements of your NBFC business plan. It can break or make the foundation of your business and decides if the customers will take any interest in enrolling your documentation and forming a relationship with you or not.