KNOWLEDGE REPOSITORY _
We created our knowledge base to provide our visitors with useful information and advice in the following areas of business life.
Companies usually prepare a business plan when starting something new, such as a new product, service, or even the entire business. The final result is not the most important part; rather, the planning process itself is. Planning affects almost every business function, including marketing, production, sales, and finance. The output of business planning is the business plan, but even more important is the planning process itself. Planning requires systematic thinking and honest answers to questions such as: Is the idea viable? Is there a market for it? Who are the competitors? How can we position ourselves and our product? What financial resources are available to implement the plan?
A business plan cannot be fully standardized; its content and structure depend on the purpose and who it is being prepared for. Nevertheless, these documents are often built according to a similar structure, and certain chapters are almost always included.
A typical business plan consists the following elements.
Its purpose is to capture the reader’s attention and is usually no longer than one page. A good executive summary essentially contains everything that is explained in detail in the following chapters, but here it is presented in a single page.
This section presents the company’s management, organizational structure, responsibilities, and authorities. Often the managers’ competencies and educational backgrounds are also described here.
This part covers the product, its life cycle, the market, the typical customer, and competitors. The plan should explain how new customers will be acquired and how they will be retained. If relevant, it is also common to present marketing mix elements here.
The financial plan is one of the most important part of the business plan. It must explain how much funding is needed to start the business or produce the new product or service. It should present cash flow, expected profit or loss in the first year, sources of financing, and, if possible, the break-even point.
This section describes the characteristics of production, where applicable to manufactured products. It should include information about production equipment, technologies, the quality assurance system used, as well as the product’s and production’s technical parameters.