A business plan is basically a written description of the future of your business. It is document that explains what and how of your plan. It may be in form of small paragraph that describes your business strategy. Business plans greatly assist in performing numerous tasks for those who actually write and read them. They are used by investment-seeking entrepreneurs for conveying their vision to the prospective investors. These are also used by firms that attract key employees and looks for new business. Companies also design business plans for the efficient management of the operations.
In simple terms, a business plan comprises of your business goals, your business strategies for meeting them, potential problems that you may face and how to mitigate them. It also talks about the roles and responsibility of various employees in hierarchy of the organisation. Moreover, it includes the organizational structure of your business and also the amount of capital needed for financing your venture and ways of keep going in time of crisis. A good business plan usually follows the accepted guidelines for both form as well as content.
There are basically three parts of a business plan, where the first one talks about business concept, where you need to discuss about the industry, business structure, specific product or service, and plans for making your business a success. The second part is related to the marketplace section where you describe and analyze the potential customers including who they are, where they are, what makes them buy and further on. This is also related to the competition and your strategies for beating it. Finally, the financial section talks about your income, balance sheet, cash flow statement, and financial ratios like break-even analyses. You may need a good spreadsheet software program and help from the accountant.
A business plan usually includes seven key components such as Executive summary, Business description, Market strategies, Operations and management plan, Design and development plan, Competitive analysis and Financial factors.
