What is a business plan for?
A business plan is a detailed strategy and tactic for the future activity of an enterprise. Having a good idea is not enough to build a successful business. She needs to give a physical appearance, describe in numbers, graphs and tables. To understand what a business plan is for, you need to understand the essence, determine the goals and main objectives of this document.
What is a business plan?
A business plan is an electronic or paper document that is issued for internal or external purposes. It describes the future development of the company, analyzes current problems and identifies ways to solve them. A properly developed plan clearly and convincingly answers the question: is it worth it to spend money and effort on a project, will it be profitable and will it pay off?
A ready-made business plan is the result of complex organizational work and marketing research aimed at studying a product, service, project, business line or company as a whole in the current market conditions. In this regard, its grounds are:
A specific project of the company – when introducing a new product or service (technology, features of entry into the market).
A full analysis of the production, business and trade sector – to identify the advantages and disadvantages, features and distinctive features.
The study of financial, technical, commercial and organizational mechanisms that can be used to solve certain problems.
External and internal tasks
Business plan required:
1. To provide to third parties and organizations. An “external” business plan is necessary in order to most effectively present your project to those persons in whom the company is interested. It can be investors, business partners, banks, various funds and even government agencies.
2. To solve internal problems. The “internal” plan should focus not only on strengths and good prospects, but also describe all the shortcomings, external and internal threats to the business. This plan is used as a management document that allows an objective assessment of the project or the company as a whole, to decide on further actions.
The best option is to draw up an external plan after the internal one. In the process of drawing up an internal plan, many issues are resolved that will greatly simplify the writing of an external one. Internally, you can provide answers to investors’ questions that may arise from their acquaintance with the outside. If you do not prepare for their questions, you can be at a disadvantage.
An internal plan can make it clear whether a third-party investor is needed at all or a company can do on its own. The investor will already be viewed from a strategic point of view, and not just as a person with money. No one would be pleased to give 30-50% of the profits to another person, and then understand that there was no need to attract them. Having carefully worked out the internal plan, you will not fall into a similar situation.
Business plan as a management tool
In addition to attracting investors, a business plan can help a manager:
find promising areas of business,
enter a new market;
define long-term and short-term goals, formulate a strategy, develop a tactical plan;
determine the criteria that must meet new products and services;
estimate production and commercial costs;
understand whether the personnel composition corresponds to the goals set for the near future;
develop a marketing policy that will allow you to take a strong position in the market;
assess the financial condition of the organization;
take a fresh look at the difficulties hindering development.
Why do you need a business plan?
As the market economy develops, the ability to make literate business plans is becoming more relevant. Let us try to explain why we need a business plan for Russian entrepreneurs. Relevance due to such circumstances:
Young entrepreneurs are entering the market. They still have no experience in managing organizations and a clear understanding of the problems that lie in wait for them.
Changes in the economic sphere, even experienced businessmen are forced to rethink their activities in a new way and be ready to withstand such a new obstacle as competitors.
Many Russians are interested in foreign investment, and for this you need to meet the expectations of investors from developed countries. They must be able to justify the need for financing and prove that they can realize this or that idea no worse than Western businessmen.
Because the business plan describes in detail the strategy of the company, then it can be used to solve all these problems.