A business plan is a document that indicates what one intends doing, how and when. This document outlines in great details, how a particular business activity is to be carried out. It gives a perfect picture of the things needed for the work, the skills to be employed, the time span to be covered, the capital needed for the productions and even how to market the finished product. In fact, it gives the total outlook of a business activity.
A business plan has several purposes. It serves as a guide in controlling the direction of an enterprise. The business plan dictates the activities of a business. It is the boss who makes the decisions as to how to do it, how much to spend, the section of the large market to target etc. It single handedly guides the affairs of a business.
Moreover, it helps in monitoring and evaluating the progress of the business. It plays a supervisory role for any business venture. It meticulously and regularly monitors the progress of a business while evaluating it to see if the set goals and objectives of the business are being achieved. When a business is declining or advancing in terms of productivity or sales it is the business plan that points it out.
In addition, it serves as a collateral or security to seek a loan or financial assistance. It acts as a security when seeking for a loan at a financial institution. It is a guarantee for assistance from corporate bodies and banks.
Several factors must be considered when preparing a business plan. Some of these have been outlined below.
I. Executive summary- This refers to the profile of the members of the executive body of the company. It is not a detailed account of each of them but a summary.
ii. Name and address of business or enterprise- The business plan must contain the full name of the business as well as the residential and postal address of the enterprise.
iii. Identification of a need to satisfy- The enterprise should identify a special need that should be satisfied. This should be explicitly indicated in the business plan.
iv. Establish what you want to achieve or do- The set out goals and objectives of the enterprise should be enshrined in the drawn business plan.
v. Find out or research from past solution to similar problems- Solutions or remedies to past problems encountered by the enterprise should be written in the business plan. The measures taken by the enterprise should be noted in the business plan.