Business Plans - Simply Put!

Introduction

In the Marstan Guide Introduction to Business Management, we said that successful organisations prepare a business plan which they update regularly and refer to frequently through the year.

What is a business plan?

A business plan is a document which describes:

1. The purpose of the business.
2. The market in which it operates (or will operate) and the anticipated customer base.
3. The marketing and sales strategy.
4. Details of the management team and staff.
5. Details of the operations, including premises, IT infrastructure and other assets.
6. Financial forecasts.

What are the main types of business plan?

There are two main types of business plan:

1. Initial business plan (for a start-up business).
2. Annual business plan (for an established business).

These two types of business plan have very different functions.

What are the functions of a start-up business plan?

There are a number of functions for a start-up business plan, including:

1. Structuring your thoughts and reducing the risk by testing ideas before any financial commitment is made.
2. Setting out the business case to facilitate bank finance.
3. Setting out the business case to attract potential investors.
4. Gathering all plans together to create a business plan which can be used for monitoring the progress of the business.

What are the functions of an annual business plan for an established business?

The main functions of a business plan for an established business are:

1. To create discipline in the business planning process.
2. To set targets for everybody in the business.
3. To raise finance.
4. To create a monitoring tool.
5. To establish a business case in the event of a proposed sale or merger.

The key attributes of a good business plan

The key attributes of a good business plan are:

1. Completeness
2. Brevity
3. Realism
4. Accuracy
5. Good presentation
6. Explanatory

What are the main contents of a business plan?

Business plans can vary in context depending on their purpose and the size or complexity of the business. A typical Business Plan would contain the following:

1. An executive summary
2. Vision, mission and strategic objectives for the business
3. History of the business
4. The market
5. Competition
6. Marketing and sales plan
7. Human resources
8. Premises and operations
9. SWOT analysis
10. Financial forecasts