A business plan is a written document describing a company's core business activities, objectives, and how it plans to achieve its goals. A business plan is a comprehensive roadmap for your small business’ growth and development. If this is the case for your business, you will need to scout potential sites. Business plans typically include detailed information that can help improve the business’s chances of success, like a market analysis, competitive analysis, customer segmentation, marketing, logistics and operations plans, cash flow projection and an overall path to long-term growth. There are basic templates you can work from, and you'll likely notice some common elements if you look up examples of business plans. The plan may cover a single product or product line or an organization. The operating plan describes your facilities, equipment, inventory, and supply requirements. A business plan lays out a written roadmap for the firm from marketing, financial, and operational standpoints. A complete business plan must include a set of financial projections for the business. It will provide potential lenders with detailed information on all aspects of the company's past and current operations and provide future projections. Keep reading to learn the basic components of a business plan, why they're useful, and how they differ from an investment plan. There's no point in starting a business if there is little or no chance that the business will be profitable, and a business plan helps to figure out your chances of success. There are different business plans for different purposes, and the best business plans are living documents that respond to real-world factors as quickly as possible. The business plan covers what you intend to do with your business and how it will be done. These tend to be much longer and require a lot more work. Also predicts financial metrics, such as ROI, IRR, NPV and Payback Period. The process of writing down what is involved in bringing your idea to reality requires dealing with the why, what, who, how, where, when, and how much of your venture. The business plan encompasses all the general planning that must be done to start and run a successful business from scoping out the competition and figuring out how your new business will fit into the industry to identifying your target market and planning how to go after them. -A business plan is a statement of your business goals, the reasons you think these goals can be met, and how you are going to achieve them *A business plan forces you to figure out how to make your business work. They can be short or long, and they can include whatever detail you think will be useful. The plan should include at least an overview of the industry of which the business will be a part, and how it will distinguish itself from its potential competitors. The other parts of a business plan, like the management team outline, the financial plan, the marketing plan, etc., are all going to provide the reader with an intense look at the business: the “ground floor view” of how the business will succeed. You can think of an investment proposal as a business plan with a different audience. Where business plan names have changed, has the price or product changed? misconceptions and explain what a business plan is not. For anyone starting a business, crafting a business plan is a vital first step. A business plan is a written document that describes in detail how a business—usually a startup—defines its objectives and how it is to go about achieving its goals. Below are some of the common and key parts of a business plan. If a company uses this kind of plan, they should expect to provide more detail if an investor or lender requests it. Other common topics explained in a business plan are leadership and staffing, financing, and a time frame for achieving business goals. A business plan and proposal are two different documents with two different purposes and functions. Since the business plan contains detailed financial projections, forecasts about your business's performance, and a marketing plan, it's an incredibly useful tool for everyday business planning. Alternatively, some business plans are used to prove competency and value to possible outside investors. Business owners can use a business plan as an internal strategy document and statement of values and/or purpose. By using your business plan to establish timelines and milestones, you can gauge your progress and compare your projections to actual accomplishments. Ideally, the plan is reviewed and updated periodically to see if goals have been met or have changed and evolved. The business plan is largely an internal document, intended to guide the decisions of executives, managers, and employees. A Summary Plan Description is a document that employers must give to employees in retirement plans or health benefit plans covered by ERISA. It also allows owners to project what type of financing is required to get their businesses up and running. … A business plan is not meant to be a static document. Good business plans should include an executive summary, products and services, marketing strategy and analysis, financial planning, and a budget. The exact details of a business plan will depend on the intended audience and the nature of the business. They are also a good way for companies to keep themselves on target going forward. To be as effective as possible, it should be reviewed regularly and updated as required. It also provides an opportunity to look back and see what has been achieved and what has not. Susan Ward wrote about small businesses for The Balance Small Business for 18 years. Path to Profitability (P2P): What You Should Know, Considering a New Venture? Planning. The business plan used internally to manage the company doesn’t have to polish and present the company to outsiders, so it probably lives on a network, not on paper. Predicts: Cash flow results and major non-financial impacts that follow from the action. Elements of a Business Plan. In the book The Entrepreneur’s Manual, Richard M. White, Jr. states that business plans are “road maps” for business creation: “You identify your origin, select a destination, and plot the shortest distance between the two points.” True, a business plan is essentially a blueprint for a business. The market analysis will reveal whether there is sufficient demand for your product or service in your target market. There are four main chapters in a business plan—opportunity, execution, company overview, and financial plan. These forward-looking projected financial statements are often called pro-forma financial statements or simply the "pro-formas." A business plan is typically targeted to investors. But the plan as part of high-end startup looking for VC or angel investment does in fact have to present the business to outsiders. The idea behind putting together a business plan is to enable owners to have a more defined picture of potential costs and drawbacks to certain business decisions and to help them modify their structures accordingly before implementing these ideas. If you have an idea for starting a new venture, a business plan can help you determine if your business idea is viable. Think of it as a living document that grows and evolves with your business. Writing a business plan forces you to She has run an IT consulting firm and designed and presented courses on how to promote small businesses. The following business plan for the fictional firm of "Acme Management Technology" (AMT) is an example of what a completed business plan might look like. These are very different plans. Choose from 500+ free sample business plans in a wide variety of industries. 9A Business Plan is a document in which a business opportunity, or a business already under way, is identified, described and analyzed, examining its technical, economic and financial feasibility. If start-up financing is required, you must have an investor-ready business plan to show potential investors that demonstrates how the proposed business will be profitable. The P2P concept has become a focus for venture capitalists and other early-stage investors such as angel investors. All of the information should fit into a 15- to 20-page document. Over time, your business goals will change. 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