THE BUSINESS PLAN

Definition:
A business plan is a written document prepared by the entrepreneur that describes all the relevant external and internal elements involved in starting a new venture. A business plan addresses both short and long term decision making.

The business plan is like a road map for the business’ development.

VALUE OF BUSINESS PLAN

It is the entrepreneur who understands the new venture better than anyone. The marketing perspective considers the venture through the eyes of the customer. The investor looks for sound financial projections. While the depth of the business plan depends on the size and scope of the proposed venture.

The process of developing a business plan also provides a self-assessment of the entrepreneur.
This self-evaluation requires the entrepreneur to think through obstacles that might prevent the venture’s success.

As the entrepreneur becomes aware of who will read the plan, changes will be necessary. Suppliers may want to see a business plan before signing a contract to supply products or services. Customers may also want to review the plan before buying the product. Therefore, the business plan should consider the needs of these constituencies.

If the entrepreneur does not consider the needs of these sources, the plan may be an internalized document without consideration of the feasibility of meeting market goals. Most external advisors and potential investors are bound by a professional code of ethics regarding disclosure.

IMPLEMENTING THE BUSINESS PLAN

The business plan is designed to guide the entrepreneur through the first year of operations. It should contain control points to ascertain progress. Planning should be a part of any business operation. Without good planning the employees will not understand the company’s goals and how they are expected to perform their jobs. The entrepreneur can enhance the efficient implementation of the plan by developing a schedule to measure programs and to institute contingency plans.

It is important for the entrepreneur to be sensitive to changes in the company, industry, and market, and with this he/she must make necessary changes in the business plan.