Business plan is a document, which mediates the first and most important impression about the company and its investment plans. It surveys and analyses the entire period from the intention to undertake the business until the period when the business could start returning embedded assets. The business plan describes all the key internal and external factors related to the establishment and operation of the company.
Purpose of a business plan:
- offers all of the important information about the company, product, marketing activities, production, employees, expenses, revenues, final economic statement,
- allows better decisions to be taken in the future for the investor (businessman), as well as for the operation itself,
- securing control of accomplishment of set goals.
The business plan should persuade:
- investors (return on injected investment, viability of the business, survival, success of the business),
- people or financial institutions, offering financial resources (cash flow),
- management of the company (used methods by the plans preparation, location of the operation, set goals, price making, expected economic outcome,…).
Utilization of a business plan:
- for the presentation of the business, in case it is necessary for the securing of financial resources, whether that is in the form of a loan, dotation or the form of gaining capital from potential investors and associates,
- evaluation of the business before its implementation (whether it is worth investing own or third party sources into the business),
- serves as a control tool after the start of the operation.
Function of a business plan:
- it is meant to show the prospective entrepreneurs the reality or improbability of the implementation of his plan, subject to compliance with the conditions set,
- entrepreneur gains information on the appropriate amount of working capital, the level of costs (expenses), income (revenues), business efficiency, and so on.
- It is a basis for obtaining credit or support from various support programs, respectively the so-called silent partners,
- it is a control and management tool of the business, whether the objectives set in the business plan are being met and allows the analysis of the reasons for possible deviation.