Business plans are formal statements of business goals, reasons they can achieve, and plans to reach them. It may also contain background information about the organization or team that is trying to achieve that goal. A written business plan is often required to obtain a bank loan or other financing.
A business plan can target changes in perception and branding by customers, clients, taxpayers, or the larger community. When the existing business is to assume major changes or when planning a new venture, a 3 to 5 year business plan is required, as investors will seek their investment return within that time frame.
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Business plans can be focused inward or out. Externally focused plans target important goals for external stakeholders, especially financial stakeholders. They usually have detailed information about the organization or team that is trying to reach the goal. With non-profit entities, external stakeholders include investors and customers. External nonprofit stakeholders include donors and clients from non-profit services. For government agencies, external stakeholders include taxpayers, higher-level government institutions, and international lending agencies such as the International Monetary Fund, the World Bank, the various economic institutions of the United Nations, and development banks.
Internally focused business plans target goals between those needed to achieve external goals. They can include new product development, new services, new IT systems, financial restructuring, factory improvements or organizational restructuring. Internal business plans are often developed in conjunction with the balanced scorecard or a list of critical success factors. This enables the success of a plan to be measured using non-financial measures. Business plans that identify and target internal goals, but only provide general guidance on how they will be met are called strategic plans.
The operational plan describes the goals of the internal organization, working group or department. The project plan, sometimes known as the project framework, illustrates the purpose of a particular project. They can also address the project site in the larger strategic goals of the organization.
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Content
A business plan is a decision-making tool. The contents and format of the business plan are determined by the purpose and the audience. For example, a nonprofit business plan might address the suitability between a business plan and an organization's mission. Banks are quite worried about the default, so the business plan for bank loans will build a convincing case for the ability of the organization to repay the loan. Venture capitalists are primarily concerned about initial investments, feasibilities, and outgoing assessments. A business plan for a project that requires equity financing needs to explain why current resources, future growth opportunities, and sustainable competitive advantage will lead to a high exit rating.
Preparing a business plan refers to a wide range of knowledge from different business disciplines: finance, human resource management, intellectual property management, supply chain management, operations management, and marketing, among others. It would be helpful to look at the business plan as a set of sub-plans, one for each of the major business disciplines.
"... a good business plan can help make a good business credible, easy to understand, and appealing to someone who is not familiar with the business Writing a good business plan can not guarantee success, but it can greatly help reduce the likelihood of failure.
Presentations
The format of a business plan depends on the context of its presentation. It is common for businesses, especially new companies, to have three or four formats for the same business plan.
"Pitch elevators" is a brief summary of the executive summary of the plan. It's often used as a teaser to arouse the interest of potential investors, customers, or strategic partners. This is called an elevator pitch because it should be content that can be explained to others quickly in the elevator. Pitch elevators should be between 30 and 60 seconds.
Pitch decks are slide shows and oral presentations intended to spark the discussion and interest of potential investors in reading written presentations. The presentation content is usually limited to executive summaries and some key graphs showing the financial trends and key decision-making decisions. If new products are being proposed and time permitting, product demonstrations can be entered.
Written presentation for external stakeholders is a well-written, well-written, well-formatted plan that is intended for external stakeholders.
Internal operational plans are detailed plans that describe the planning details needed by management but may not appeal to external stakeholders. Such plans have a somewhat higher level of disclosure and informality than those targeted at external and other stakeholders.
Typical structure for a business plan to start a business
- cover page and table of contents
- executive summary
- mission statement
- business description
- business environment analysis
- SWOT Analysis
- industrial background
- competitor analysis
- market analysis
- marketing plan
- the operating plan
- management overview
- financial plan
- attachments and milestones
Common questions addressed by a business plan to start a business
- What problems are solved by the company's product or service? What's the niche to fill?
- What is the company's solution to this problem?
- Who are the company's customers, and how do companies market and sell their products to them?
- What is the market size for this solution?
- What business model for business (how to make money)?
- Who are the competitors and how will the company maintain its competitive advantage?
- How does the company plan to manage its operations as it grows?
- Who will run the company and what makes them eligible to do so?
- What are the risks and threats facing the business, and what can be done to mitigate them?
- What are the company's capital and resource requirements?
- What are the historical and projected financial statements of the company?
Revise the business plan
Overruns costs and income deficiencies
Estimated costs and revenues are essential for any business plan to determine the viability of the planned business. But costs are often underestimated and income is too high resulting in cost overruns, lack of income, and possibly non-viability. During the 1997-2001 dot-com bubble, this was a problem for many new technology companies. Forecast reference classes have been developed to reduce the risk of cost overruns and income shortages and thus result in more accurate business plans.
Legal and liability issues
Disclosure requirements
Externally targeted business plans should list all legal issues and financial liabilities that may adversely affect investors. Depending on the amount of funds collected and the audience to whom the plan is presented, failure to do so may result in severe legal consequences.
Restrictions on content and audience
Non-disclosure agreements (NDAs) with third parties, non-competition agreements, conflicts of interest, privacy concerns, and trade secret privileges can severely limit the audience to which one can point out business plans. Alternatively, they may ask each party to accept a business plan to sign a contract accepting specific clauses and conditions.
This situation is complicated by the fact that many venture capitalists will refuse to sign the NDA before looking at the business plan, lest it put them in an untenable position to see two similar business plans independently developed, both claiming originality. In such situations one may need to develop two versions of a business plan: a release plan that can be used to develop relationships and detail plans that are only shown when investors have enough interest and trust to sign the NDA.
Open business plan
The traditional business plan is very secret and very limited among the audience. The business plan itself is generally regarded as a secret.
An open business plan is a business plan with an unlimited audience. Business plans are usually published and available to all.
In free software and open source business models, trade secrets, copyrights and patents can no longer be used as an effective locking mechanism to provide sustainable benefits for a particular business and therefore a confidential business plan is less relevant in the model.
Usage
- Education
- Business plans are used in several primary and secondary programs to teach economic principles.
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- Wikiversity has a Lunar Boom Town project where students of all ages can collaborate with designing and revising business models and practicing evaluating them to learn practical business planning techniques and methodologies
- Fundraising
Fundraising is the ultimate goal for many business plans, as they are related to possible possible successes/failures of corporate risk.
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- Angels of Investors
- Business loans
- Grants
- Initial funding company
- Business capital
- Internal use
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- Goal-based management (MBO) is the process of agreeing on the objectives (as detailed in the business plan) within an organization so that management and employees agree on goals and understand what they are in the organization./li>
- Strategic planning is an organizational process in defining its strategy, or direction, and taking the decision to allocate its resources to pursue this strategy, including capital and its people. Business plans can help decision makers see how a particular project relates to an organization's strategic plan.
- Total quality management (TQM) is a business management strategy aimed at instilling quality awareness in all organizational processes. TQM has been widely used in manufacturing, education, call centers, government, and service industries, as well as NASA space and science programs.
Not for business profit
Business goals can be determined for either a non-profit or nonprofit organization. Nonprofit business plans usually focus on financial goals, such as profit or wealth creation. Nonprofits, as well as business plan government agencies tend to focus on "organizational mission" which is the basis of government status or nonprofit status, tax-free, although nonprofits can also focus on optimizing revenue.
The main difference between nonprofit and nonprofit organizations is a "nonprofit" organization looking to maximize wealth versus non-profit organizations, which provides greater community benefits. In nonprofit organizations, creative tension can develop in an effort to balance the mission with "margin" (or income).
Satir
The business plan is the subject of many satires. Satire is used both to express cynicism about business plans and as an educational tool to improve the quality of business plans. As an example,
- In his presentation, Five Criteria for a Successful Business Plan in Biotech , Dr. Roger Bernier, uses the comic to remind people what to do when researching and writing business plans to start biotechnology.
- Selena Maranjian's "Fool on the Hill" article on The Motley Fool, "South Park Investing Lesson" (November 8, 2001), references "Underpants Gnomes" to illustrate error-focused goals without implementation strategies clear. The episode "Gnomes" quipped the Dot-com era business plan. Chapter 26 of Neal Stephenson's 1999 Cryptonomicon novel begins with a fictional high-tech business plan, insinuating writing styles and physical forms of glossy business publications such as business plans and annual reports.
See also
References
Source of the article : Wikipedia
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