For an existing business, this process involves first coming to term with the personal objectives of the owner/manager, and second, coming to terms with the strength and weakness of the existing business and the opportunity and threats that if faces.
A business plan is the written document that details the proposed venture. It must illustrate current status, expected needs and projected result of the new business. Every aspects of the venture needs to be described; the project, marketing, research and development, manufacturing, management, critical risks, financing and milestones or a timetable. A description of all of these facets of the proposed venture is necessary to demonstrate a clear picture of what that venture is, where it is projected to go and how the entrepreneur proposes it will get there. The business plan is the entrepreneur's road map for a successful enterprise.
In some professional areas the business plan is referred to as a venture plan, a loan proposal or an investment prospectus. Whatever the name, the business plan is the minimum document required by any financial source. The business plan allows the entrepreneur entrance into the investment process. Although, it should be used as working document once the venture is established, the major thrust of the business plan is to encapsulate the strategic development of the project in a comprehensive document of outside investors to read and understand.
The business plan describes to investors and financial sources all of the events that may affect the proposed venture. Details are needed for various projected actions of the venture, with associated revenues and cost outlined. It is vital the assumptions on which the plan is based are explicitly stated. For example, increase/decrease in the market or upswings/downswings in the economy during the start-up period of the new venture should be stated.
The emphasis of the business plan always should be the final implementation of the venture. In other words, it's not just the writing of an effective plan that is important bu also the translation of that plan into a successful enterprise. These fall into two parts: first a statement is needed describing the business. This sounds too simple, but it is needed if a business is to marshal its strengths and not waste its efforts going into areas where it has no experience. The statement should not be too restrictive to prevent development or so broad as to be meaningless. Second, a qualified primary long-term objective is needed which reflects what is wanted by the owner/manager and what business can achieve, given the prospects for the environment it finds itself in.
So, a business plan is not only an effective one but also a guideline for establishing an enterprise. And it has a lot of impacts on the path of success for an entrepreneur.
