Definition of business plan: what they are, why they are necessary

Definition of the business plan: for every business, it is the first vital step. It is the model that sets you in motion towards your goals. Look at it as the roadmap that tells you and the world how you expect your company to achieve the goals you set.

A business plan has often been defined as a comprehensive document that clearly outlines how the entrepreneur intends to operate their business. You can also define a business plan as an important communication tool that details the financial strategy and goals of the organization. This definition is valid for both existing and proposed businesses.

Find in the plan a detailed outline of the resources needed to realize the business development objectives. What are these resources, how will they be collected, and where will they be obtained? A business plan says it all.

For the management of the company, the plan must include the identification of the markets, the list of clients, the calculation of the expenses that will be incurred and the calculation of the required investment of funds for the commercial activities based on the income and projected costs in a specific period.

The document is specifically designed to attract capital investment. Any time you approach a loan program for assistance, go armed with your business plan. Many banks insist on seeing your account statement before considering your loan application. Potential investors and bank managers carefully study the document that schedules the proposed business activities for the next year or the established period of time. The projected figures for sales, profits, turnover, ownership and key personnel data contained in the plan help them decide if your company is a safe bet for investment.

In the case of small businesses, the definition of the business plan extends to a review of proposed products, target markets, industries involved, management and marketing policies, financial and production requirements.

The plans of giant companies can be defined as an expression of their corporate vision. The success and credibility of such a plan are assured when the vision is truly global and based on the current success of private enterprise.