Introduction to business planning

Incorporating a new business into the market as well as a new product, require a decent amount of capital investment to allow the correct functioning of the business. No matter the reason, an improvement always will require more investment as well as workforce.

An entrepreneur knows intimately about its business, and knows the correct functioning of it. No matter whether it’s about a new idea or an established business, the true fact here, is that our investors, employees and other interested people need to know everything about the business.

For this reason is why we need a business plan.

What is a business plan?

A business plan is a detailed summary about a business, as well as the products and services provided by it. It also covers commercial operations developed, future plans and the required financing or existing for the growing of the enterprise.

A business plan is a document that describes the development of an Enterprise and shows that is feasible.

A business plan contains:

• A brief report of your business.
• The person who leads the project.
• The concept or description about the project or business.
• The objectives for the project
• The human and financial resources required for the business.
• How the resources will be obtained
• Why the enterprise will be successful
• The time frame and how can be obtained the required funds.

What does the business plan?

Without any doubt, the business plan is a basic reference document that will help the entrepreneur to guide in a proper way the business, know about it in detail, its background, strategy and goals. Moreover, it will help to find potential partners and investors.

The business plan is the “card” of presentation of your enterprise.

What does a business plan include?

A business plan may adopt different forms and sizes. Some chapters are common to the majority of the plans, where they include:

• A summary of the main aspects of the plan in a couple of pages;
• Information that allows to understand the business;
• A description of the product and services offered.
• A description of the sector of the business where it will compete.
• The marketing plan contemplating the products and services, their promotion, prices and distribution.
• A description of the human resources department: Direction, manager and personnel.
• The financial plan including pro-forma balance sheets, taxes and fund flow.

A business plan is a document containing summarized information, and it can by enlarged when convenient or required.

Why is important to have a business plan?

Some benefits obtained by a business plan are:

• The preparation process of the business plan allows to rethink about the enterprise and to research all available options.
• Know about the opportunities and risks of the business operation as well as testing the estimations.
• It also will help to identify financial requirements of the business.
• For some circumstances, it can be use to negotiate credits.
• It helps to inform employees and partners about plans and strategies.
• It gives a starting point to compare the functioning of the enterprise.

It’s always convenient to check the last business plan, and not just when is about a new business, but whatever change is being made to the company. Consequently any change can be made according to the last business plan.