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Business Planning
Rationale
A Plan is a proposed or intended method of getting from one set of circumstances to another. They are often used to move from the present situation, towards the achievement of one or more objectives or goals.
Informal or ad-hoc plans are created by individual humans in all of their pursuits. Structured and formal plans, used by multiple people, are more likely to occur in projects, diplomacy, careers, economic development, military campaigns, combat, or in the conduct of other business.
It is common for less formal plans to be created as abstract ideas, and remain in that form as they are maintained and put to use. More formal plans as used for business and military purposes, while initially created with and as an abstract thought, are likely to be written down, drawn up or otherwise stored in a form that is accessible to multiple people across time and space. This allows more reliable collaboration in the execution of the plan.
A Business Plan is a summary of how a business owner, manager, or entrepreneur intends to organize an entrepreneurial endeavour and implement activities necessary and sufficient for the venture to succeed. It is a written explanation of the company's business model for the venture in question. Business plans are developed for ventures in both business and government.
Business plans are used internally for management and planning and are also used to convince outsiders such as banks or venture capitalists to invest money into a venture.
Business plans are noted for often quickly becoming out of date. One common belief within business circles is that the actual plan may have little value, but what is more important is the process of planning, through which the manager gains a greater understanding of the business and of the options available.
See also
- Financial Plan
- Marketing Plan
- Human Resource Plan
- Plan, Project, Project management
- Strategic Management, Strategic Planning
- Cost overrun
- Cost-benefit Analysis
- Underpants Gnomes (Satire about poor business plans)
External links
- Business Link
- United States Small Business Administration - How to Write a Business Plan
- How do I write a business plan? - Australian Government guide to writing a Business Plan
- The Entrepreneur's Dictionary - Guide to Startup Business Terms
Learning Objectives and Outcomes
This is a non-taught unit designed for self-directed study by those intending to enhance their professional or managerial competence, knowledge, understanding, and skills in business planning.
After completing the course, students/entrepreneurs will be able to
- write vision and mission statements for their own business venture and select planning strategies to carry out those statements
- understand the purposes and audiences for business plans
- understand the structure and content of a business plan, including the reasons for the structure and content
- be able to analyse components necessary for a small business plan
- be able to develop their own financial, operational, and strategic elements for a business plan
- be able to critically evaluate business plans
Today's Videos
- Connect with us on http://www.youtube.com/finntrack
- Google's Playlists
Teaching and Learning Resources
The Ten Essential Action Steps
- Define Your Company: What will you accomplish for others and you?
- Identify You Company’s Initial Needs: What will you require to get started?
- Choose a Winning Strategy: How will you reach your customers and what will you say to them?
- Analyse Your Market: Who will want your product or service?
- Develop A Strong Marketing Campaign: How will you reach your customers and what will you say to them?
- Build a Dynamic Sales Effort: How will you attract customers?
- Design Your Company: How will you hire and organize your workforce?
- Target Your Funding Sources: Where will you find your financing?
- Explain Your Financial Data: How will your convince others to invest in your endeavours?
- Use the RMA Database: Check Your Answers Against the Answer Key
Here are tips, examples, techniques, tools and a process for writing business plans to produce effective results.
This free online guide explains how to write a marketing or business strategy, a basic business plan, and a sales plan, using free templates, tools and examples, such as SWOT Analysis, PEST Analysis, the 'Ansoff Matrix' and the 'Boston Matrix'.
Separately the marketing guide offers more specific explanation and theories and tools for marketing strategy and marketing planning, including techniques and tips for advertising, public relations (PR), press and media publicity, sales enquiry lead generation, advertising copy-writing, internet and website marketing, etc.
The sales training guide offers detailed theories and methods about sales planning and selling, extending to cold calling and negotiation skills and techniques, especially relating to selling.
Sometimes people use the term business plan when they are referring to a project. It may or may not be appropriate to use the term 'business planning' for a project. Some projects are very substantial and equate to an autonomous (independent) business activity, in which case a business plan is entirely appropriate. Other projects are smaller, perhaps limited to internal change or development, and are less likely to require a conventional business plan, and are quite adequately planned and managed via project management methods.
Business planning terminology can be confusing because much of it is used very loosely, and can mean different things.
External links
- Introduction to Business Planning
- Planning Process
- Essential Elements of a Good Business Plan For Growing Companies
- Basic Business Research Methods
- Critical Steps to Writing a Business Plan
Read More ...
A business plan can be seen as a collection of sub-plans including a strategic plan,description of the business, marketing plan, financial plan, production plan, human resource plan, management plan
The business plan has many forms. There is however a format that is typical:
Executive summary
- explains the basic business model
- gives rationale for the strategy
Background
- gives short history of company (unless it is a new company)
- provides background details such as:
- age of company
- number of employees
- annual sales figures
- location of facilities
- form of ownership including
- sole proprietor
- partnership
- entrepreneurial startup
- private corporate startup
- publicly traded corporation
- limited liability company
- public utility
- non-profit organization
- background of key personnel including
- owners
- senior managers
- managing partners
- head scientists and researchers
Marketing
Finance
Human resources
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Specialized sections such as product research and development, legal strategies, marketing research, or inter-company collaborations, are added to deal with unique features or characteristics of the business or its markets.
Putting It All Together
Tutorials
- What a Business Plan Should Look Like
- How to Create a Time Line
- Your Plan is an Extension of You
- Demonstrate That You Can Manage Conflicting Goals
- Present Yourself in the Best Light
- Make a Great In-Person Presentation
Readings
Sample Plans Outline for a Simple Business Plan
Introduction to Financial Projections
Recommended Texts
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The fast track to intelligent business planning for executives and entrepreneurs Richard Stutely Dec 2006, Paperback, 336 pages Check the availability and buy your books from our Bookshop. |
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Bankable
Business Plans 1st Edition Edward Rogoff - Sicken School of Business, Baruch College, City University of New York 1587991632 240 pages HB 6 1/8 x 9 1/4 © 2003 Check
the availability and buy your books from our Bookshop. |
Resources
Small businesses use several sources available for start-up capital:
- Self-financing by the owner through an equity loan on his or her home or other assets.
- Loans from friends or relatives
- Private stock issue
- Forming partnerships
- Venture capital, given sufficiently sound business venture plans
Some small businesses are further financed through credit card debt - usually a poor choice, given that the interest rate on credit cards is often several times the rate that would be paid on a line of credit or bank loan. Many owners seek a bank loan in the name of their business, however banks will usually insist on a personal guarantee by the business owner. In the United States, the Small Business Administration (SBA) runs several loan programs that may help a small business secure loans. In these programs, the SBA guarantees a portion of the loan to the issuing bank and thus relieves the bank of some of the risk of extending the loan to a small business. For guidance on European Union SME funding programmes, see
- EU funding
- Match funding (PDF document 24KB)
Venture Capital is capital typically provided by outside investors for financing of new, growing or struggling businesses. Venture capital investments generally are high risk investments but offer the potential for above average returns. A venture capitalist (VC) is a person who makes such investments. A venture capital fund is a pooled investment vehicle (often a partnership) that primarily invests the financial capital of third-party investors in enterprises that are too risky for the standard capital markets or bank loans.
- Private equity
- Investment bank
- Business valuation
- Corporate Finance
- Open source funding
- List of venture capital firms
- List of Chicago Venture Capital Companies
- List of finance topics, list of finance topics (alphabetical)
- Angel investor
- Dragons' Den
- National Venture Capital Association
- References
- American Venture Magazine
- British Venture Capital Association
- Introduction to Venture Capital
- National Venture Capital Association
- Venture Capital Glossary
- Ricafe2 - A Research programme sponsored by the European Commission analysing venture capital.
- National Association of Seed and Venture Funds
Private equity is a broad term that refers to any type of equity investment in an asset in which the equity is not freely tradable on a public stock market. Passive institutional investors may invest in private equity funds, which are in turn used by private equity firms for investment in target companies. Categories of private equity investment include leveraged buyout, venture capital, growth capital, angel investing, mezzanine capital and others. Private equity funds typically control management of the companies in which they invest, and often bring in new management teams that focus on making the company more valuable.
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Sources of Advice and Guidance
There are many sources of guidance for Small Businesses. Governments provide books, pamphlets, websites, even coaching and funding. Look also to local government and city councils. Business schools In some countries, banks are often keen to help new customers succeed and provide books, websites, newsletters and/or coaching to attract new business customers. Likewise accountants and lawyers. Babson College hosts a student business, UTANDEM, that specializes in advising small business owners for free. There are a number of large franchise chains of professional business coaches.
Business Link is the United Kingdom Government’s multi-channel support service for micro, small and medium sized companies (SMEs). As a non-political organisation it is dedicated to helping new and existing businesses innovate, improve, grow and become more competitive. Business Link is built on the belief that all businesses, whether new or established, need to improve and grow continually if they are to compete effectively and meet their future goals. As such, easy access to relevant and affordable business information, advice and assistance is the catalyst to their future success. Business Link services are delivered by 45 county-based Business Link Operators. These are funded by the Department for Trade and Industry and managed by the nine Regional Development Agencies. Business Link only covers the regions of England. Elsewhere in the UK, its counterparts are Business Gateway (Scotland), Business Eye (Wales) and InvestNI (Northern Ireland). Business Plan
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The Small Business Administration, or SBA, is a United States Government agency that provides support to small businesses.
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Write a Business Plan
Total Quality Management
A small business may be defined as a business with a small number of employees. The legal definition of "small" often varies by country and industry, but is generally under 100 employees in the United States while under 50 employees in the European Union (In contrast, the American definition of mid-sized business by the number of employees is generally under 500 while 250 is for that of European Union). These businesses are normally privately owned corporations, partnerships, or sole proprietorships. Small businesses are common in many countries, depending on the economic system in operation. Typical examples include: small shops, hairdressers, tradesmen, solicitors, lawyers, accountants, restaurants, guest houses, photographers, small-scale manufacturing etc. The smallest businesses, often located in private homes, are called microbusinesses (term used by international organizations such as the World Bank and the International Finance Corporation) or SoHos. The term "mom and pop business" is a common colloquial expression for a single-family operated business without any hired labour, e.g., "mom and pop store". When judged by the number of employees, the American and the European definitions are the same: under 10 employees.
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