What Is a Business Plan?

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 marketing of 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.

Prerequisites in Formulating the Plan

Self-assessment, business type, products, marketing analysis components, setting a target customer and establishing the best way to reach him or her, ways of promoting your product, budget analysis, personnel and management team questions, and solutions for unfavourable situations, considering everything predictable and back-planning everything unpredictable.

After formulating your plan the implementation phase follows. There is a simple rule: the healthiest is not to deviate too much from the established plan as you might risk losing track and encountering problems you did not even envisage. Also, once the plan is implemented, one should always keep an open mind, and show flexibility to adjustments on the way.

Source: http://www.businessplanning.ws