When you start your MBA program, you’ll probably have to create (or review or study) a business plan. It might be a mandatory exercise because it’s part of a graded assignment. Or it might be part of a MBA business plan competition sponsored by your friendly neighbourhood consulting firm. If you think you’ll never have to create one for yourself, it may still be a good idea to get your hands dirty right now, even before you step into a b-school.

Why should you start working on a business plan now?

When you are in B-school, everything will happen at such a breakneck speed that you will not have time to digest many of the important lessons. So start the learning process right now, when you’ve got more time (alright, after you finish working on the GMAT score, writing MBA essays and submitting your b-school applications).

What is a business plan?

In simple terms, a business plan is a package of information that defines a business idea, its market potential and the roadmap to achieve it.

It‘s a great way to evaluate and develop your entrepreneurial skills. Why? Because you’ll have to go way beyond just thinking of a brilliant product or service. You will also have to think about all the supporting elements that would go into converting this dream into a reality. That would include corporate strategy, product development, marketing, resources required (people, infrastructure, technical know-how), financing and a whole lot of other aspects that you would never have to think about in a cozy corporate environment.

How should you go about creating a business plan?

There are loads of paid and free business plan templates available for download on the internet. If you are just getting started don’t start downloading anything. Go with your gut feel on this by answering a few basic questions and the dependent questions will start popping up eventually. First come up with a business concept.

How can you come up with an innovative idea?

We complain all the time about loads of things, so there’s a lot in the world that needs to be set right. For starters, think of an industry that you like, then think of a product or service that you really hate. Now think of ways to alter that product to make it better. There you’ve got yourself a brilliant innovative idea to work now. That was the easy part. Now think about what you’d need to get this off the ground and start making money.

What aspects should you cover in your business plan?

Use any documentation tool like MS Office that you are comfortable with. Don’t start off with a huge template that you’ll get tired of filling. Start off with the following basic structure and keep it simple. Expand and modify it as you go along.

– The Idea: Describe the idea in brief. Which industry will it target? What are the competing products? Why will your product be better? Who will buy it?

– The Team: Talk about the core team and why they are the right guys to be working on this idea. What skills do they bring to the table?

– Operational model: How will you build the product? Can you just buy it from someone? Who are the suppliers? What value will your venture add? Who will sell it – you, your partners?

– Financing: Where will the initial money (called seed funding) come from? What are the fixed and variable costs in running the business? What’s the ‘burn rate’ for the cash? When will you need to pump in more money? Would you need to approach venture capitalists?

The list could go on. And it will once you start working on it. When you are relatively sure that you’ve covered the broad important aspects, take a break. Appreciate the beauty of what you just created…without an MBA.

Now check out some of the free business plan templates available on the internet and compare your plan with those. What elements did you cover? What aspects did you miss out? Which areas would be easy to expand upon?

Most important question (take a deep breath): What stops you from completing the business plan and launching the business right now?