A business plan is a form or document that lays out what one plans to do, how and when. This report outlines in excellent details, how a particular business activity is to be performed. It offers a perfect picture of the important things required for the work, the skills to be employed, the period to be covered, the capital necessary for the productions and even ways to market the completed product. In fact, it provides the total outlook of a business activity.
A business plan has various purposes. It functions as a guide in controlling the instructions of an enterprise. A business plan determines the activities of business. It is the one in charge who makes the decisions as to ways to do it, what does it cost? To spend, the section of the large market to target and so on. It single-handedly guides the affairs of business.
Furthermore, it helps in monitoring and examining the progress of business. It plays a supervisory function for any business endeavor. It diligently and frequently keeps an eye on the advancement of business while assessing it to see if the set objectives and goals of the business are being accomplished. When a company is advancing or declining regarding performance or sales, it is the business plan that points it out.
Also, it serves as collateral or security to seek a loan or financial help. It functions as a security when seeking for a loan at a financial institution. It is a warranty for assistance from corporate bodies and banks.
Numerous factors need to be thought about when preparing a business plan. Some of these have been outlined below.
I. Executive summary– This describes the profile of the members of the executive body of the company. It is not an in-depth account of each of them, however, a summary.
ii. Call and address of business or enterprise– The business plan must contain the complete name of the firm along with the property and postal address of the enterprise.
iii. Identification of a need to satisfy- The enterprise must recognize a unique requirement that ought to be satisfied. This must be clearly indicated in the business plan.
iv. Establish exactly what you want to do or achieve- The set out objectives and goals of the company must be enshrined in the drawn business plan.
v. Find out or research study from previous option to comparable problems– Solutions or solutions to past issues encountered by the enterprise needs to be written in the business plan. The procedures taken by the administration should be kept in mind in the business plan.
vi. Evaluate the market or market where you can operate e.g. potential clients, rivals, etc.- A good business plan should consist of an analysis of the target group, likely purchasers of the merchandise and potential competitors of the same item especially those in the same business area. This would help the enterprise to figure out finest techniques in winning consumers and contending efficiently with competitors.
vii. Pick the best solution –The best option that can skillfully attend to the situation(s) in vi. Above is picked and documented.
viii. Describe the business or industry (item, services, a background of the entrepreneur) – The complete classification of the business and its activities ought to be vividly offered. This involves the services and items provided by the business in addition to some vital info about the entrepreneur who is manning the enterprise.
ix. Explain production activity e.g. making and developing process, machines, sources of basic materials, the location of enterprise and so on- The entire production processes through which the end product or service gets to the consumer are ultimately explained. This includes the source of necessary materials for the production, the actual production, and the machinery or tools that help in the manufacture of the services and items.
x. Marketing activities e.g. customers, prices, distribution, promo, marketing, etc.- The marketing and pricing techniques adapted to be utilized by the enterprise must be mentioned in the business plan. The numerous vents for distribution, promotions, and kinds of ad chosen by the business must be plainly defined in the business plan.
xi. Company e.g. background of supervisors and their tasks, and so on– The organizational structure or method of business, therefore, the chain of magnates or managers and their designated tasks need to be covered in your business plan.
xii. A financial plan (capital requirement, potential profits, capital and sources of funds)- A great business plan must have a clear monetary plan with details concerning business capital, anticipated revenues, the daily circulation of cash and the sources of funds for business. This should be explained in straightforward and simple language.
If all these aspects are well covered in one’s business plan, it would be extremely useful in assisting the enterprise to grow and not to incur high losses however rather compounded profits.