The importance of a business plan to every business can not be undermined as it plays a vital role in business development, revenue, customer service and other vital roles of a business. In addition the business plan looks forward in time, projecting future financial performance and financial position.
What is a business plan
A business plan is a set of steps or actions to be taken towards bringing the business to its set or desired goal in relationship with time.
Business plans usually look forward in time for a period of one to three years to a “planning horizon,” which moves forward periodically with reviews and updates. Business plans for different organizations will differ somewhat in content and structure, but most are designed to address two fundamental kinds of questions:
- What will the business look like in one year? Two, or three years? (I.e., what will business performance look like and what will the financial position look like then?)
- How does the organization bring about the desired performance and build a stable financial situation?
It’s always cool to consider the present situation and always be realistic when setting time frames to meet set goals or if you find this difficult you can always consult a business consultant.
Business Proposal (Bonus)
Purposes of a business plan
To cover milestones: When there is a sense of direction, moving on will not be a difficult task for the driver. When a plan is documented, direction is made easy. This will avail you the opportunity to visualize your company’s future.
A Business Plan Helps Analyse Customers’ Needs: No entrepreneur or business person can thrive without a careful consideration for the target audience. This will enable you to have a brief thought on what the potential customer’s needs are, how the product and services you want to provide will benefit him or her, or proffer solutions to their problems. This is basically the most important in a business plan and a good way to convince customers of brilliant opportunities.
Forecasting new opportunities: This serves as a good way to plan ahead for business growth and expansion. Once you have a good understanding of the company goals and areas of expertise, the next step is to analyse the market, assessing the consumer’s needs and how they can be helped.
Concentration on your area of expertise: Not all market opportunities identified will succeed, but a careful selection of the exact one to venture into will give answers to the unclear future.