What is a business plan?

What is a business plan? In this article, we are going to see some details about business plans – that is:

• What a business plan is all about
• Who is supposed to use a it
• What are its components and
• The various kinds of business plans that you can choose from

As an entrepreneur, you need to make a record of your business idea in order to know how to carry on with it. A common document that displays how you want to carry out your production, marketing, financial and operational plan in order to achieve your goals is the business plan.

Having all of that in one document may look long – most people think so. However, it must not be a long document – that notion should no longer exist. Business plans help your business go through the planning process. However, not all businesses need a formal business plan.

Those who may need a formal business plan are those who are out to seek for investors or wanting to apply for a commercial loan. Not every business actually need a formal business plan even though it’s necessary for internal use. It also can be simple bullet points with important landmarks or projections.

What is a business plan?

A business plan is a document that details out how a business, a new one in particular, plans to achieve its goals. It gives a formal statement on how business goals are to be attained and the plans you need to carry in order to reach them.

In another article, I shared with you 5 creative ways to get a profitable business idea for Africa. In effect, jotting down the basics of your business idea on a piece of paper or anything means you have written is a business plan. It tells you how you plan to run your business, how to make it work and how you will take it to success.

What is it for an Entrepreneur?

To entrepreneurs, it expresses their vision, and describes the various strategies and operations needed to attain the goals of the proposed venture. To an entrepreneur, it needs to carry the following details:

• the nature of the business (products and services)
• marketing strategy
• financial background including the various costs or expenses
• sales and projected profits that are expected to be made

It is also a road-map to success for a business. It projects a 3-5 years plan and steps to take in order to grow revenue. Business plans are dynamic documents that you can update frequently due to changes in the economy. In this case, you should print such a document only when you need to use at the moment.

It is a forever document and so you will need to be evaluating it on a regular basis depending on your business health. A formal business plan should conform to the accepted guidelines – form as well as content. The content should answer relevant questions and include specific elements.

Contents of a formal business plan

To write a formal Bplan for a small business, you need to have the following:

1. Executive Summary
2. Company Description
3. Market Analysis
4. Organization & Management
5. Service or Product
6. Marketing & Sales
7. Funding Request
8. Financial Projections
9. Appendix

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