5 Answers | Add Yours
Arguably, there is nothing more important in a company’s documents than its business plan. There are a variety of reasons for this, from internal planning by the company’s managers, to its attractiveness to loans from banks, to its ability to convince others to invest. For new businesses, a business plan in the start-up phase provides a clear path to the future as it requires that everyone involved carefully consider their strategies and realistically evaluate the new enterprise’s limitations in order to avoid potential costly mistakes.
Few and far between are companies who survive without a business plan. Those who forego this crucial step are statistically more likely to fail. A well-constructed plan can assist businesses in clarifying their objectives and reach their goals. Management decisions made prior to actions help companies realize both their limitations, how to ultimately overcome those limitations, and to continue to grow, become, and remain competitive.
Business plans are used in for multiple reasons and purpose. Internally, business plans are used to forecast events and plan accordingly by the company’s executives. Business plans are used to acquire the money needed for smooth operations, whether those funds are used for current operational needs or for planned expansions, mergers, acquisitions, and more. Because each plan is specific to each company, each is unique although some standard elements are usually present in all.
Let’s consider the usefulness of a business plan for internal purposes first. Much like an architectural blueprint to show construction workers specifically how to erect a building, business plans too are blueprints to show managers and executives how to build a sound foundation and scaffolding of a business. As the business grows, the business plan can be compared to the projected goals, sales, direction, and the timeliness of all of those elements. If something goes wrong, the business plan can help where those problem areas are occurring, and solutions that have anticipated some of those rough spots can be implemented. Areas of opportunity are also anticipated in a well-constructed business plan, such as marketing potential and opportunities. Anticipating the need for income as the company grows is also an important element of a company’s business plan. Looking forward, for both problems and opportunities, helps a company stay on course.
In the best of worlds, everyone involved in a company will be aware and participate in a company’s business plan, from the president to the forklift driver. For those in upper management, a good plan will establish performance targets for the company as a whole. In middle management, the plan is used to guide decisions in real time as these managers navigate on-going needs, problems, and opportunities. Middle management also relies on the business plan to assess those performance of employees who work below them. Those on the lower levels should be aware of the future plans for the company so that they can adjust their own performance on the job in order to help the company stay on course and reach its future goals.
As companies grow and change, they frequently face the need to reorganize or restructure. When this happens, a business plan which has anticipated these events can help the company stay profitable as it pursues new goals. Plans that include the needs of a reorganization or restructure will identify the types of changes that will likely be necessary, including changes in production and employees as well as products and services.
Outside of the company, a clear business plan is used by lenders to assess a company’s ability to take on debt. The business plan continually documents the company’s cash flow needs as well as providing a comprehensive list of assets. The business plan also offers lenders its projected financial performance. This factual information allows lenders to perform risk assessment and avoid making bad loans.
When it comes time to sell a company, the business plan is the best and first source of information for the potential buyer, either of the entire company, one or more of its divisions, or its product line. Just as it does for lenders, the business plan, for a buyer, gives that party valuable insight into the basic strengths and weakness of the company it is looking into purchasing.
No single person prepares a company’s business plan, at least not many which result in successful ventures. Business plans are almost always a team effort, and they involve not only executives, but managers and workforce input as well. Upper management is wise to listen to everyone involved when establishing the plan, and they should be willing to entertain feedback as well.
A few basic steps can be identified in the planning process. The first step is to organize the process by identifying who will be involved, determining the basic scope of the plan, and establishing a time frame within which the plan is to be completed. Upper management not only communicates its support of the planning process, it also defines the responsibilities of each party involved. Work plans that supplement the general timetable are helpful in meeting deadlines associated with the planning process.
While plans are indeed unique, some components are overlap. For example, all companies must begin with determining who among them will be involved in the construction and verbiage of the plan; they must define the scope of the plan; they must decide on a deadline for the plan’s completion. After this entire framework has been laid down, and after a great deal of information is gathered, those involved can begin assessing the company, both internally and externally. Of great importance is an honest assessment of any and all weaknesses identified, whether those weaknesses are internal or external. External factors that fall under consideration include the economic picture of the country, competitors, and trends. Management is also assessed at this time.
After organizing and evaluation comes goal setting and strategizing for the future. Goals usually include defining the market, how the company will compete in the marketplace, and its overall philosophy regarding customers. From these broader goals, more specific strategies are developed.
Now specific plans can go forward. Programs determine how the existing and future resources will be managed in order to achieve goals.
Source: Business Plans Handbook, ©1995 Gale Cengage. All Rights Reserved
A good business plan lets you formulate the best route for your business to take. It can even help you find your way through hard-to-navigate financial and logistical passages.
While all business owners should have such a plan in place before they go looking for funding or open their doors to customers, not all plans need to be the same.
Your plan depends on the goods or services you offer, how much funding you need and what your goals are for the future.
Creditors will want to see how and when you'll be able to repay them. Investors will also want to know when they can expect a return on their investment.
If you plan on requesting funding of any kind, then you'll want to pay very close attention to the financial sections of your business plan.
Business plan format
Examples of these sections, along with other crucial information to be included in your business plan, are listed below.
The executive summary
This is usually the first section of any business plan. It gives the reader a condensed idea about what your business is all about and how you intend to accomplish your goals.
While the executive summary may be the most important part of your business plan, you might want to hold off on writing it until you've worked through the rest of your plan.
Think of this section as an extended elevator pitch. You want to explain in depth the goals of your business and how you will satisfy the needs of your market.
Your company description also explains the competitive advantages that you believe will make your business a success.
The market analysis section is where you explain your research to readers, including exactly who your target market is.
Organization and management
The organization and management section tells your readers about the structure of your business and who in the company is responsible for different operations.
Service or product line
The service or product line section includes a description of your product or service and any associated copyright information or research and development activities.
Marketing and sales
The marketing and sales section of your plan includes information on market penetration and growth strategies for your business, as well as information about your sales strategies and activities.
If you plan on asking for a loan or other financial assistance, then you'll need to include a funding request as part of your business plan, which includes specifics about how much money you need now and how much you'll need in the future.
Creditors may also want to see a financial projections section, outlining what your business will accomplish financially over the next three to five years.
Keep in mind that the sections listed above comprise the conventional elements of a business plan.
However, your business plans can be as unique and diverse as your business. It should be a reflection of the kind of business you wish to start.
To get an idea of some of the different ways to approach a business plan, visit Bplan's sample business plan gallery. You can also start your own business plan online by registering with the Small Business Association.
A buisness plan is very broad. But assuming that you ment you want to start a buisness and were asking for things you need to plan ahead of time ill just leave this here and this is just some thoughts and opinions.
- You need to make sure you have an appropriate setting for your buisness if you are having a physical store you might want to look for empty lots or stores people are selling to make sure you catch peoples attention
- Shelves and proper tools for the store
- Mass suppliers to replenish your stock
- Workers if a big buisness
- Plan out a payroll
- Plan out monthy or weekly expenses
- Bills for electicity and ac etc..
- Product buying in mass as mentioned above suppliers
And thats all I can think up of to have a good buisness tart up plan
Business planning requires a long term perspective and faith in your company's capabilities. I might sound a bit too impractical as compared to the present scenario but in my opinion these are the basic necessities of planning a business prospective. A business plan is an essential roadmap for business success. This living document generally projects 3-5 years ahead and outlines the route a company intends to take to grow revenues. The most important aspect is being honest. Your business plan should reflect your company perfectly. Under or over estimation of any sort can incur losses and disappointments!
We’ve answered 318,955 questions. We can answer yours, too.Ask a question