WHAT IS BUSINESS PLANNING?
Business planning is thinking and working out the details of your enterprise with the hope that you will be able to prevent problems, improve your business and thus earn more profit. Engaging in planning helps you to analyse your potential for success. Planning also enables you to identify what you will need to do on your way towards having a successful business.
WHAT IS A BUSINESS PLAN?
A business plan is a tool which helps entrepreneurs to plan their businesses. It is a written summary that describes important aspects of the business. The nature of the business plan will be determined by the purpose for which it is needed. Persons seeking funding will require a formal business plan. This is best done by a professional with the relevant experience.
THE IMPORTANCE OF A BUSINESS PLAN
It helps to:
* Prevent mistakes
* Identify strengths and weaknesses/challenges
* Spot and correct errors before they occur * Communicate your ideas to investors and lenders
* Clarify your product or service
* Establish the break even point of the business and prepare cash flow forecasts
* Identify any other requirements or needs such as training and finance
* Identify objectives for the upcoming year
* Reveal the timing and location of business development
* Guide the start up of the business
* Evaluate the progress of the business
* Build the entrepreneur’s confidence
* Redirect the entrepreneur to new and or better ideas
* Identify potential customers and strategies to communicate with them
WHAT ARE THE MAIN SECTIONS THAT MUST BE INCLUDED IN A BUSINESS PLAN?
Business Plans may differ in the sections that are included. However, there are some general sections that are required. These include:
1. An Executive summary. This is a summary of the information included in the business plan.
2. Description of the Business. This provides an outline of the idea, information on the business owner/s, etc.
3. Marketing. Includes an outline of the marketing plan and information on competitors.
4. Financial Management. Outlines how much resources are needed, the cash flow and profit plan and loan amortization plan if money is to be borrowed.
5. Operations. A strategic plan time tabling business activities, how and when these would be carried out.
6. Conclusion. May be used to express reservations about the business idea, amount of finance required, etc.