Also, a business plan is a road map that offers guidance so that a company can plan its future and helps it avoid road bumps. The time you spend making your business plan thorough and accurate and keeping it up to date is an investment that pays great long-term dividends.
A business plan is a written document outlining in detail how a company – usually a new one – can achieve its objectives. A business plan allows for a written plan from a marketing, financial, and organizational point of view. Business plans are important in enabling a business to set its goals and attract investment. They are also a way of keeping businesses on track for the future.
A business plan is a basic resource that every company needs to have in place before its operations begin. Banks and venture capital firms typically make a successful business plan a requirement for investing the funds in a company.
Though it may work, it's not a good idea to operate without a business plan. Yes, very few companies will survive without one. Creating and adhering to a business plan certainly has more benefits, like being able to think about strategies without investing too much money into them — and potentially losing them.
TYPES OF BUSINESS PLANS
A. START-UP BUSINESS PLANS
New companies will outline the steps to begin the new company with a business plan. This document typically contains sections which describe your business, the product or service, market assessments and the management team you are planning to provide. Potential investors may also need a financial report with tablets detailing financial realms like sales, income and cash flow forecasts but not limited to them.
B. INTERNAL BUSINESS PLAN
Internal business plans target a specific business audience, for instance, the marketing team that needs to assess a proposed project. This document outlines the current state of the venture, including running costs and profitability, and then estimate whether and how the venture can return the required capital for the project. External plans provide information on the marketing, training and technical costs of projects. Generally, they do provide a business report that indicates the target demographic, the value of the competition and the positive effect on client profits.
C. INTERNAL STRATEGIC BUSINESS PLANS
A strategic business plan offers an eagles eye vision of an organization's goals and how they can be achieved and offers a basic strategy for the whole enterprise. Although the framework of a strategic plan varies from one organization to another, the majority of elements include five: corporate vision, mission statement, the identification of key success factors, priorities strategy, and an executive timetable. A strategic business plan puts everyone in the company to the fore and encourages workers to work together to accomplish the goals of the organization with success.
D. FEASIBILITY BUSINESS PLANS
A business viability plan answers two key concerns about a future company enterprise: who will buy the services and products the company needs to sell, whether they are, and whether the company will profit. Viability business plans include but are not limited to parts that define the need for the product or service, the target market or the required resources. A feasibility plan finishes with future plans.
E. OPERATIONS BUSINESS PLANS
The operating plans are internal plans of an organisation consisting of business operations related components. An operating plan sets out transition milestones and targets for next year. The organizational strategy outlines the roles of staff
F. GROWTH BUSINESS PLANS
Growth plans are in-depth explanations of expected growth and are designed for internal or external purposes. If corporate growth needs investment, full business descriptions, management, and officers can be included in the growth plan. In order to satisfy potential investors, the plan must contain all company information. When no capital is needed for a growth plan, the writers should give up clear business outlines, but provide revenue and cost estimates.
The main purpose of the Business Plan (advantages):
A business plan contains all the product knowledge, manpower and financial forecasts, and future plans. According to the Small Business Administration, you can refer to your business plan when you prepare to expand your business. When you decide to make changes to your company you will incorporate those changes in your business plan. Your business plan tells you why you began your company first, what were your original goals and how the changes in the company would impact your original vision.
When you launch your company, and even as your business goes on, you will need to be continually concerned with funding your business. Financing issues start with the start-up costs and then proceed with market growth and the production of new products. When you're looking for outside funding, your business plan is one of the first things the investor needs to see, according to which they will take the decision of investment.
Private creditors, banks, or any other lending entity may want to see how you plan to run your business, what your estimates of expenditure and revenue are, and whether or not your expectations for the future are realistic with the company you built. A well-written and detailed business plan will address all of that.
Achieving the set goal
A business plan contains all the product knowledge, manpower, and financial forecasts, and future plans which will help you in achieving your desired business goal.
When we need a business plan:
i. For start-up business
ii. For any existing business projects
iii. For making joint ventures
A Business plan must contain the following elements:
1. Executive summary
Under this section describes the organization and provides the statement of purpose along with any detail on the management, staff, activities, and location of the organization.
2. Product and services
Here, the company will detail the goods and services it will be provided, including pricing, product lifespan, and customer benefits. Many considerations that may go into this segment include processes of production and manufacturing, any patents that the business may have, and patented technologies. Any research and development (R&D) details can be included here too.
3. Market Analysis
A company needs the business as well as its target audience to get a good handle. We will explain the competition, and how it and its strengths and weaknesses are factors in the industry.
4. Marketing strategy
This field explains how the business can retain and sustain its client base and how it intends to reach the customer. That means a clear channel of distribution has to be outlined.
5. Financial Planning
The company includes financial planning to attract the party reading the business plan. For already developed companies, annual statements, balance sheets, and other financial details may be included. Modern ventures should have goals for the company's first five years and any future investors.