It is very important to maintain flexibility of thought, not to lose Critical vision and ability to judge
Business Plan: Questions & Answers
What is a Business Plan
entrepreneurs, and the like with an overview of a new or existing business and a long and short term strategic plan for its operation.
Why does my company need a Business Plan
Most of all, the writing a business plan is that it “forces” company owners and management to sit down together and think constructively about the company, its aims, progress made so far, alternative business strategies and implementation, and how to realize future business and financial goals.
A business plan is essentially a written summary of the various aspects of a business’s operation and their influence on financial results.
What are the key features of a good Business Plan
A good business plan should include among other things: a general description of the business and its products and/or services; an industry and competitor overview; an analysis of the advantages/disadvantages of the product/service. In addition, a well written business plan will identify progress targets, consolidate operating and marketing policy, describe the organizational structure of the business and its human resources, summarize the necessary investment needs, and finally forecast how these elements combined will impact future Profit & Loss Statements and cash flow.
Are all Business Plans the same
Generally speaking, a good business plan will tailor itself to the intended audience and the specific client’s purposes.
The most common reasons for writing a business plan include:
- Raising capital – directed at investors outside the company.
- Improvements or changes in the business strategy – directed internally.
- An operational business plan – generally directed internally.
Who is a Business Plan intended for
Business plans written to raise capital are usually directed at banks, technological incubators, venture capitalists and/or private investors as well as other sources of capital such as State guaranteed funds.
Business plans written with the intention of altering an existing business strategy or improving financial results are usually written for existing investors, shareholders and managers who wish to increase efficiency.
Should Business Plans be kept up-to-date? How do I know when to change mine
Nowadays, businesses evolve rapidly and unexpectedly due to advances in technology, diversified products and changing marketing techniques. Thus, it is recommended that you keep your business plan as current and relevant as you would any other aspect of your business.
Which aspects of a Business Plan should be up-dated?
A well written business plan will accommodate dynamic changes. The variable parameters are those which connect to the market and include the entering of new competitors, advances in the relevant technology, marketplace and shifting consumer preferences with regards the general market and your specific product/service.
You should also consider updating your business plan if you are making changes to your product’s features, adding to your product mix or improving an existing product or service. Also, any changes to your promotion, marketing and advertising budgets, changes in predicted revenues or expenditure, and even global macro – economic shifts such as significant adjustments in exchange and interest rates are all good reasons to update your business plan.
When updating your business plan you must consider whether you have been able to realize the goals that you previously set for yourself, and if not, why not? Has your business maintained its focus and continued to operate within the same industry, or has your business strategy somewhat shifted?
How often should I update my Business plan
Companies are advised to up-date their business plans once a year as part of their annual or perennial budget deliberations.
Is it possible to write a business plan without any specialist assistance?
It is possible to update business plans internally, as long as the original business plan was written in such a way as to accommodate changes. However, companies are advised to make use of objective observers whenever possible, who can specialist financial advice and ensure that expectations are kept reasonable.