Meaning of Business Plan
What is Business Plan:
The business plan is a document that describes, in a general way, a business and the set of strategies that will be implemented for its success. In this sense, the business plan presents an analysis of the market and establishes the action plan that will be followed to achieve the set of objectives that has been proposed.
As such, the business plan has an internal use, from the point of view of management and planning, and an external one, as a tool for promoting and communicating the business idea, either to sell it or to obtain financing.
The business plan, in this sense, serves as a compass for the entrepreneur, since it allows them to have a better understanding of the business, at the same time that it forces them to investigate, reflect and visualize all the factors, both internal and external, that will influence the progress of your business. In the same way, business plans are documents that are subject to constant updates and rethinking, in accordance with the dynamics of business management with tools such as the benchmarking and SWOT analysis.
Parts of a business plan
The business plan is a document that summarizes the way in which a business initiative must organize and act to be successful. In this sense, the business plan defines the objectives that the company intends to achieve. Hence, there are several elements that every business plan, when it is drawn up, must contemplate:
- Planning: it is the part in which the business idea is explained, the company is described, and the products or services to be marketed are exposed.
- Marketing: it is the part where, after analysis and market study, the marketing strategies to be implemented are determined, the public to which the products or services are directed, as well as aspects directly related to their sale, such as pricing and the distribution channels to be used.
- Operation: it is the part where the organizational structure of the company is defined, the administrative policies, as well as the techniques and procedures to produce the goods or services that will be commercialized.
- Production: it is the part where all matters related to the production of products are defined, which includes topics such as suppliers, minimum stocks, distribution logistics, among other aspects.
- Administration: is the part where issues such as credit policies, creditors management, account management, as well as financial plan, sales projection, cash flow, profitability, among other things, are fixed.
- Summary: it is the final part of the business plan and where the most important information about the project in terms of business, its strengths and the investment required is explained in a summarized way.