The 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 (Histrich, Peters, Shepherd 2013). It addresses the integration and coordination of effective business objectives and strategies when the venture contains a variety of products and services. A business plan depicts all the aspects of a business venture concisely. It is usually necessary to have a written business plan to raise money and attract high-quality business partners. Some entrepreneurs are impatient and do not want to spend the required time to write a business plan. This approach is usually a mistake. Writing a business plan forces an entrepreneur to think carefully through all the aspects of a business venture. It also helps a new venture establish a set of milestones that can use to guide the early phases of the business rollout.
It is a mistake to write a business plan too early. The business plan must be substantive enough and have sufficient details about the merits of the new venture to convince the reader that the new business is exciting and should receive support. A business plan should disclose all resource limitations that the company must meet before it is ready to start earning revenues.
A business plan is a written narrative that describes what a new business intends to accomplish and how it wants to achieve it. For most new ventures, the business plan is a dual-purpose document used both inside and outside the firm. Inside the firm, the business plan helps the company develop a ‘road map’ to follow to execute its strategies and plans. Outside the firm, it introduces potential investors and other stakeholders to the business opportunity the firm is pursuing and how it plans to continue it.
Scarborough (2013) defines a business plan as a written summary of an entrepreneur’s proposed business venture, its operational and financial details, its marketing opportunities and strategy, and its managers’ skills and abilities. The plan is a written proof that an entrepreneur has performed the necessary research, studied the business opportunity adequately, and is prepared to capitalize on it with a sound business model.
A business plan is a document that every successful business owner must suffer to develop to attract outside investors and to build internal growth (Applegate, 2003). A good business plan explains the concept of a new venture to investors, or, just as important, keeps an existing business on track. While forward-looking, its credibility derives from its grasp of present conditions. It accurately describes the market, the management team, the need today for products under development, the realities of manufacturing and delivering products, the strengths of the competition, including their ability to counter a new competitor like yourself, and reasonable projections of growth.
Importance of a Business Plan
- • It helps determine the viability of the venture in a designated market.
- • It guides the entrepreneur in organising his or her planning activities.
- • It serves as an essential tool in helping to obtain financing.
Business Planning Timetable
-Johnson (1990)
· Decide why you want the plan
· Become familiar with the looks of your projects.
· Decide who will help you draw up the plan
· Describe the kind of business you want to run
· Gather information about the market and the environment
· Gather information about the cost
· Make some forecast and do your sums
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