It is difficult to overestimate the importance of planning during the economic crisis. And although it is difficult to take into account everything in the business plan,it can prepare executive managements to making emergency decisions and as a road map protect them from the wrong path that leads to the bankruptcy of their companies.What this document is and what should be noted when its preparation - in the following.
A good business plan is the foundation of planning process
Despite the fact that researchers have been talking about the relationship between good planning and the successful functioning of the business for years, most managers continue to work haphazardly. But this is the very thing that leads many companies into bankruptcy.
Today, the business plan should not be only the reference book of each leader, but also the basis for making strategic decisions. It contains a number of indicators that give an idea of the commercial, budgetary and economic efficiency of the project in question and, in the first place, are of interest to its investor participants. It provides a comprehensive description of the business and the environment in which it operates, as well as the management systems needed to achieve its goals.
Types of business plans
The business plan of a company describes the prospects for its development for the forthcoming planning period, indicating the main budget and economic indicators.
The business plan of a structural unit or financial responsibility centre is a plan for the development of its economic activities. Its purpose is both to justify the amount of resources allocated to the unit in a centralized manner, and in calculating the amount of profit growth left at its disposal.
The business plan as an application for a loan is designed to obtain borrowed bank funds on a commercial basis.
The business plan as an application for a grant is necessary to receive funds from the state budget or charitable foundations to solve acute social and economic problems. It is the justification of direct and indirect benefits for the society from the allocation of resources to the claimed project.
The business plan of the investment project is a rationale for the market development strategy and the expected financial results from the seed investments. It serves as a basis for negotiations with a potential investor.
The business plan for the development of a region contains a rationale for the prospects for the socio-economic development of the region and the amount of funding for relevant programs for bodies with budgetary powers.
Objectives of business plan
The objectives of a business plan developing include:
— ensuring the analysis of the company activities;
— determination of not only its goals and tasks, but also the development of measures for their implementation;
— compilation of documents that contain aggregated data on the nomenclature and volumes of production output;
— characteristics of sales markets and raw materials;
— calculation of the need for production in land, energy and labor resources;
— justification of investments that contain aggregated data on the nomenclature and volumes of output;
— establishing the plan’s targets, including the break-even point calculation;
— financial forecasting based on the proposed activity;
— determination of amounts and types of financing;
— marketing strategy of the company.
The objectives of the business plan may vary depending on the needs of each particular company. If it is necessary to include additional information, for example, a cash analysis, then take this opportunity.
Structure of business plan
There is no universal structure of a business plan because of the difference in business objectives and the infinite variety of variants for the environment in which the company operates. However, with all the variety of tasks there is something in common that characterizes certain elements of the business plan. These are its sections. They occupy a significant part of the business plan and can differ basically only by their consistency.
Each specialist decides where to start business planning and what indicators of the company’s activities should be indicated. Basically the sections of the business plan are as follows:
1) representing of objectives;
2) table of contents;
3) brief description of the company;
4) industry analysis;
5) description of the project;
6) production process;
7) marketing analysis and marketing strategy;
8) financial and economic part;
9) risk factors;
10) annexes.
The business plan in its final form is a guiding document that ensures, with proper use, the efficiency of the management and operation of the company.
System approach to the business plan making
A business plan is a document that should draw the attention of potential partners, investors and bankers. It should look professional, as it is a kind of advertising tool, representing both the company or the entrepreneur him/herself, as well as his/her business. Therefore, it is necessary to pay attention not only to the content, but also to the appearance of the business plan. It should be simple, functional, understandable and easy to use.
The business graphics (diagrams, charts, tables) should be used when making the business plan, and that allows better understand the information provided. For example, tables allow the use of digital information in a compressed, ordered form, attract attention to significant figures and indicators. In addition, it is necessary to use a simple and clear style of presentation when making the business plan.
