Want to know what a business plan is?Sadaf Abbas
Want to know what a Business Plan is?
A Business plan is a detailed document describing a particular project. So, stakeholders receive this document as courses of action of the future, including:
- The company’s objectives,
- Financial projections,
- Strategies of implementation, and
- Feedback process.
It has complete information about the resources available vs required for the project and the implementation process.
This planning document also contains information about:
- The key stakeholders of the project,
- A description of duties performed by specified personnel, and
- The level of authority and responsibility associated with each stakeholder.
Therefore, the success of any big or small organization depends on a clear and well-informed business plan document.
Three main components
Setting Goals and Objectives
A business plan is an answer to many questions that the top management, the shareholders, or the investors may ask before jumping to start a new project.
- Increase in the wealth of shareholders from the project,
- Risks involved,
- Financial Model
- Impacts of those risks on the profitability of the project, and
- Many other questions,
Are answered by the means of this document. And the stakeholders take their decision based on the answers. This shows exactly how important this document is.
Management creates this document at the start of a project and used it until the end. At the initial stage, it supports the brainstorming process. It documents all the great ideas and their possible outcomes along with their specific challenges and opportunities.
The ideas mentioned in a brainstorming session when translated into a written document provides a unique opportunity for self-assessment and therefore, increases the reliability of predictions. These written ideas for the basis of setting organizational objectives, missions, and visions.
These plans are also used after a few years have passed to compare the actual versus expected position of the business to determine variance and causes of differences found. It results in updates made to the business plan and reassesses future predictions of goals and objectives.
The business plan is a complete document and therefore it also contains vital financial data that is used to allocate resources and make financial decisions.
Appropriate allocation of resources is vital for the success of any business idea and therefore, too much or too little resource allocation may result in either failure to achieve goals and objectives or a loss of profits that could be earned.
Financial information is required for starting any project because setting up a business requires money and investors require a return on the money they would invest in the process which means money has a cost.
And therefore, if the project cannot earn enough money to pay a profit to the owner on top of the cost of that money of the investor then the project would not be acceptable.
Management and Operations
This document as discussed above is a complete document for recording all the aspects related to the project. And therefore, it also includes information about the managerial aspects of the project.
This includes day-to-day activities, weekly, monthly, quarterly, and yearly activities along with the personnel allocated for the completion of those tasks.
It should also include all the details of the financial resources allocated in the budgets and other current or fixed assets allocated for the completion of tasks involved in the business plan.
Proper use of the Business plan
It is hard to imagine that a company formulates a detailed document to help themselves, but then forgets about it during and after the completion of a project.
The information highlighted by comparing this document with actual results is invaluable. This will teach many lessons for future projects.
Companies tend to realize the different aspects of operations and the many expectations that were different at the time of making this document, at the start of the project, and therefore, it helps the management to make necessary amendments for future projects and to avoid adverse deviations.
Hence, a Business Plan document is not simply a guide, it is the foundation of a project.
The free Business plan Template would help you to create a business plan section wise. You need to fill in the key questions in each section. If you simply want to start in the right direction, then this free Business Plan template is the best fit for you.
We do offer a customized investor-ready Business plan. If you require our service to craft your business plan, feel free to contact us at firstname.lastname@example.org or visit the page Investor Related Document and Business plan Service.