Guidance on business plans. What form should have a business plan?
Why do I need a business plan?
Many entrepreneurs are forced to prepare a business plan only when it is requested by a potential investor. A business plan is not only useful, however, foreign donors, but also business owners – in fact, the version should be one of the first steps in starting any business. The business plan can give a first insight into real business perspective, can be avoided losses from non-viable projects before they have actually occurred.
Preparation of business plan allows:
• establish realistic resource needs and sources from which they can be obtained;
• timing of the stages of business;
• coordination of future phases of the business and resolve any inconsistencies.
Entrepreneurs are ‘forced’ to consider issues that might escape to a more shallow. Such weaknesses can be discovered or business ideas that could enhance its profitability. Nobody expects the business plan forecast to be reflected fully in actual achievements, however, if the plan is well established, its data can serve as a useful tool to control the results.
The business plan is at the same time, a requirement of foreign investors (shareholders or potential creditors). They must find a business plan:
• the nature of the business;
• for the business is profitable;
• the necessary capital;
• Expected profitability.
The business plan is not the only issue considered by potential donors, but a business plan that proves that there is a coherent strategy for business owners will certainly remove any investor.
What form should a business plan?
There is a fixed structure of the business plan, this information may vary depending on the requirements which must meet the business plan – for example, by:
• Final recipient: business owners or prospective investors;
• age of the company: business plan for a new company will be different from that for a project of an existing company;
• Company specific activity;
• scale business project.
But there are basic elements that are found in most business plans:
• summary of the company, mission, objectives and strategy;
• description of product or service and its market which it is addressed;
• description of sales strategy;
• description of competition;
• various financial projections.
The business plan for potential donors must convince them of the viability of the proposed project. Its author will be able to shed light on the deal, but that does not harm the plan presented realism. People who will review the plan generally have enough experience to detect overly optimistic assessments. If business development is slower than appreciate that the company might have attracted too many expensive resources, if it is too rapid, the company might not be able to use the full potential for lack of funds.