Business Planning Basics

Business Planning Basics

A business plan defines the structure of the company and the object of the business activity. It contains a market analysis and details of strategic marketing, management structure, personnel and finance. A business plan plays an essential role in business administration. When properly conceived, it acts as a valuable tool.

What is a business plan? 

A business plan synthesizes all the essential aspects and information about a company, whether it is being developed or already in operation. The business plan is a substantial, detailed document containing the principal data about the structure of the company. This includes the object of activity, a market analysis, the specific approach to strategic marketingof the company, management structure and personnel and all relevant financial information.

Why Is It Essential to Have a Business Plan?

Simply because it makes all the difference between organized activity and chaos. It opposes a randomized course of events to an estimated, pre-evaluated one, offering the premises of a success-oriented business by reducing unexpected, unwanted occurrence. Building a business plan can be rather demanding. It makes an exhaustive, detailed analysis of the activity of the firm. The result must be a blueprint of the company. It combines a strategic vision of the company with the data that will turn the business plan into a performance-enhancing tool by means of planning, measuring and improving. Starting a business will necessarily require planning. There is, of course, a huge difference between the appearance of things and the production of real plans on paper. By following a pattern of questions to be answered, issues are never considered before they arise. Creating a business plan is a test for both the business and the entrepreneur. Without a plan, there are some aspects to be perfected before the business can be started. There may even be a major problem which will indicate that the business will not function. For already existing businesses, the necessity of a business plan may appear at various stages: when applying for a loan, for example, or at a difficult moment when readjustment of some parameters is necessary, or when you have to rethink essential business directions.

Why Do You Need a Business Plan?

By creating a business plan managers can complete a complex analysis of the whole business. This process allows them to verify more related aspects than they had considered on the first approach.

Why is a business plan of such central importance in a business? Why is it so controversial? Why do some people seek to downplay its importance?

Surprisingly, others would claim that a business plan has no value. We can immediately dismiss this view as without any logical basis. Every single activity, from one day’s work to longer-term projects, requires planning, investigation and analysis.

A business plan is a valuable tool, required both for small- and medium-sized companies as well as for major corporations, whether they wish to start a business or to help it grow.

When managers put down on paper the data necessary to create a business plan, they are forced to organize and structure their business ideas. The business begins to take shape. A written plan reveals complex aspects of future work or work in progress.

Synthesizing all the data needed and structuring them into a specific business plan is not a task to be undertaken lightly. A guesstimate analysis is required, to take existing data into account and keep within reasonable bounds. While it may take up to several months to formulate a viable plan, once accomplished, it will bring about real, important benefits.

Three Reasons Why Any Business Should Have a Business Plan

• A business plan is an effective tool for defining the existing realities. It prompts you to analyze your business project or the existing situation objectively and critically, define a focus and set realistic goals. It may also constitute the basis for control and evaluation.
• A good business plan will reveal weaknesses or omissions in your planning. Because good business plans require a guesstimate of risk calculation, they help to reduce risks.
• They provide a valuable communication tool presented in an organized, credible manner, which allows lenders, outside directors, investors, banks and employees to obtain a complex view of your business. Even if, in some cases, a business plan format is not officially required when applying for a loan, although most lenders will ask for one, the very existence of a plan constitutes a plus, a step forward in obtaining the loan.

Writing Business Plans that Result

Writing business plans that sell means presenting valuable, concise content in the best possible manner.

We have established that it is highly important for companies to have a business plan. In the multitude of firms and companies, there is a way to stand out: a successful business plan.

So, what is the recipe for writing a business plan that impress? The art lies not only in the content but in the way it is presented so as to result in a professional, convincing material.

The first requirement is a general one, that should be used in the case of any written (or spoken) statement: in order to transmit information in a coherent, appealing manner, the business plan writer should observe the main principles of discourse. These are: clarity, brevity/conciseness, logic and truthfulness. In order to gain consistency and credibility, the presented information should be backed up with figures whenever possible.

The second main requirement when writing business plans is that you always have to keep in mind the target readers of your work and thus putting emphasis on their particular points of interest. But this stage is a customizable one, that will be grafted on a basic common structure.

Conclusion

The planning process allows you to see the full range of future operations, business and anticipate what might happen. Planning is especially important in commercial activities that require long-term foresight and preliminary development prior to the first steps of the company. Preparation and implementation of the plan - an ongoing process. 
 
Working without a plan is a response to the events are accomplished, the activities on the basis of the plan - a reaction to the unforeseen and planned events. 
 
The current economic situation related to the rapid development of market economy, enterprises dictates a new approach to corporate planning. They are forced to look for forms and planning models that maximize the effectiveness of decisions. 
 
The best option for achieving such solutions is a new advanced form of the plan - a business plan. 
 
Success in the business world depends crucially on three elements: 
 
1. Understanding of the general state of affairs at the moment 
 
2. Representation of the level that you are going to achieve 
 
3. Planning for the transition from one state to another. 
 
A business plan can solve these problems.