What is a Business Plan?

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If you’re browsing through our website, then you’re probably considering starting a business, or finding out more about the basics of business. One of the first and most important things one has to do when thinking about starting a business is coming up with a business plan. For those wondering what is a business plan, we thought of writing this article and explaining some of the more important aspects. You will also find some introductory information on how to write a business plan, but for more comprehensive info you will have to do some research on your own, eventually investing in some manuals or classes that teach you the proper way to go about things.

So what is a business plan? Basically, it presents a sets of goals for the business, together with the methods of achieving them; if the business is just starting, the plan should include information about why its makers believe it would be successful, but if we’re talking about a company that already exists and has some repute on the market, the plan could include details about the achievements of the company and its experience in the field. Another important piece of information is that existing businesses can sometimes make new business plans in order to shift the focus of the company, or to attract a new target market; in situations like these, a three- or five-year plan is required, because investors need to see how their investment does each year and what returns they can expect.

When explaining what is a business plan there are many factors to take into account; for example, a business plan can have internal or external targets:

  • External-oriented business plan – this plan is created for the stakeholders, which in for-profit companies are the investors and the customers; in non-profit companies, the targets are the donors and the beneficiaries of the services offered by that organization. Here, the business plan is focused on information about the entity which presents the plan, the goals it proposes and how it plans on achieving them.
  • Internal-oriented business plan – this type of plan focuses on intermediate goals that must be attained in order to achieve external goals; it is something that concerns the company or organization solely, and it can refer to the development of a new product or service, to modernizing a facility, or to restructuring the financial or organizational aspects of said entity. Furthermore, it is not only financial aspects that drive this plan, but other non-financial measures as well, such as data or business analyses.

As for the content of a business plan, there is no fixed rule; the content varies depending on the trade, the field of expertise, or the goals of that plan. However, each plan must contain information on marketing, human resources, finances, and the operations that must be accomplished. In case it is needed, a legal plan must be provided as well. The information contained by the plan must be very specific. For example, when you describe the best marketing ideas, you must also explain how you plan on implementing those ideas, what results they should return and when you should revise them. Furthermore, when explaining what is a business plan, we must also talk about the presentation formats and the structure of the plan. For example, a start-up business plan must start with a cover page and a table of contents that presents what the plan contains.

After that, an executive summary that shortly explains the propositions of the business plan, concise analysis and data is required. Other elements that the plan must include are a business description, industry background, an analysis of competitors,  a marketing plan, a financial plan, an operations plan. These are not the only elements, but they are basic. Other information is added depending on the type of business in question and the ultimate goals of the business plan. The plan of each of the business’ departments must be specific and if possible, it should also contain the reasoning of the ideas. For example, your best marketing ideas should be based on comprehensive market researches.

These are the fundamental concepts of a business plan. Like we mentioned in the beginning, it is difficult to find comprehensive information on how to devise a business plan; usually, one needs specific studies in the field, and a lot of experience in a certain field is required in order to be able not only to create a plan, but to create one that is successful. Nevertheless, we hope you found this information useful and that it cleared up some questions for you.

October 2021