A business plan defines the structure of the company and the object of the business activity. It contains a market analysis and details of strategic marketing, management structure, personnel and finance. A business plan plays an essential role in business administration. When properly conceived, it acts as a valuable tool. A business plan synthesizes all the essential aspects and information about a company, whether it is being developed or already in operation. The business plan is a substantial, detailed document containing the principal data about the structure of the company. This includes the object of activity, a market analysis, the specific approach to strategic marketing of the company, management structure and personnel and all relevant financial information.

The Benefits of Business Planning

The business plan can personally benefit the entrepreneurial team. Founding a new business can be enormously fulfilling and exhilarating, but it is also an anxiety-ridden and tense experience. Usually a great deal of money is at stake, and the consequences of poor decisions can affect many people for a long time. In developing and writing a business plan, the entrepreneurial team reduces these anxieties and tensions by confronting them in advance. By projecting the risks of the new venture into the future, the team comes to grips with potential negative outcomes and the possibility of failure. The knowledge that comes from this experience can reduce the fear of being taken by surprise by problems that could have been foreseen and provided for at the very outset.

Essential Elements of a Good Business Plan

Business Plan Executive Summary Your executive summary is a snapshot of your business plan as a whole and touches on your company profile and goals. This section offers tips on what to include and how to keep it brief and succinct. Market Analysis Read about the specific industry, market and competitive analysis information you should conduct and include in your plan. Company Description What do you do? What differentiates your business? Which markets do you serve? Get tips on how to present this information. Organization & Management All businesses are structured differently. Find out how best to describe your organization and its management structure, regardless of its size. Marketing & Sales Management How do you plan to market your business? What is your sales strategy? Read more about how to present this information in your plan. Service or Product Line What do you sell? How does it benefit your customers? What is the product lifecycle? Do you plan R&D activities? Get tips on how to tell the "story" of your product or service. Funding Request If you are seeking funding for your business, find out what information you need to include in your plan to ensure success. Financial Projections If you need funding, providing financial projections to back up your request is critical. Find out what information you need to include in your financial projections for your small business.

The planning process

Every planning process goes through a series of stages. In essence the aim is to complete each of the following steps: Analyse the external environment Analyse the internal environment Define the business and mission Set corporate objectives Formulate strategies Make tactical plans Build in procedures for monitoring and controlling

Research

Detailed research into the industry, customers, competitors, and costs of the business begins the process. A variety of resources can be used for research, ranging from databases and articles to direct interviews with other entrepreneurs or potential customers. Research should be documented and organized carefully with the information gathered and the source as there is a need to cite sources within the plan