What is the purpose of a business plan; What components need to be in a business plan; Why is a business plan important; How to use a business plan now that it is created; and What are the risks of not having a business plan?
What Components Need to Be in A Business Plan?
Introduction
Every organization needs an effective business plan. The business plan includes several business strategies, which are to be executed in the business process. In a competitive market, the company needs an appropriate plan to streamline the process and different business outputs. The business plan is comprehensive content, which depicts the possible utilization of the available resource. It seems like a business presentation, which demonstrates the purpose, components, importance, usability, and risk associated with the business plan. In the modern business era, the scope of the business plan should be understood by the management, as it can contribute to business sustainability.
Components Need To Be In a Business Plan
Business management must include seven elements in the business plan. These components are an executive summary, description of business, market analysis, organizational management, funding requirements, sales strategies, and financial projections. The executive summary articulates the main outcomes of the business plan. The business description depicts the business purpose along with the illustration of different products and services. Market insights are to be illustrated in the market analysis. The management approach portrays the management style to deal with employees. Funding requirement indicates the initial capital investment to start the business. Finally, the plan comes up with financial projections to make effective financial decisions in the future (Covello & Hazelgren, 2006).
Business Description
The business description indicates the products and services of the company. The business description includes a vision and mission statement along with strategic direction. In the business plan, the business description is to be illustrated to enhance the attention of a potential investor. Along with the short description of the industry, the business description describes the intention of the company. The firm may align with the latest industry trends and streamline its operations. The business description articulates the overall purpose of the company.
Market Analysis
Market analysis is an integral part of the business plan. In the market analysis section, the management must examine the market situation. Several market trends are to be navigated to derive several insights and make sound decisions. In the competitive landscape, it seems necessary to analyze competitors regarding their strategies and actions. The business plan has become the support of the company to get an edge in the competitive landscape (Dan, Lior, & Daphna, 2016).
Management Plan
The management plan depicts the management approach and several human resource strategies. The business plan describes the possible management process options to deal with employees at all levels of the company. The management plan is a part of the internal business process, and a good business plan must highlight it. It seems an adequate management direction to control the internal stakeholders. Depending on the nature of the business or work, the firm has to shape the management process in the business plan. A better strategy may enable a better employee management relationship, and it can also ensure internal business sustainability (Sahlman, 2008).
Funding Requirements & Financial Projections
Funding requirement indicates the initial capital investment to start the business. Finally, the plan comes up with financial projections to make effective financial decisions in the future. The firm has to examine possible capital investments. The financial projection includes financial or sales forecasts, which can help to make further predictions. This part of the business process creates an impact on the current and future financial condition of the company. The most important thing is to obtain some possibilities through the financial plan or projection to control the business cost. The firm sets a budget and depicts the direction to emerge strongly.
References
Covello, J. A., & Hazelgren, B. J. (2006). Complete Book of Business Plans: Simple Steps to Writing Powerful Business Plans. Sourcebooks, Inc.
Dan, G., Lior, H., & Daphna, W. (2016). How To Create A Successful Business Plan: For Entrepreneurs, Scientists, Managers and Students. World Scientific.
Sahlman, W. A. (2008). How to Write a Great Business Plan. Harvard Business Review Press.
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