business plan

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Business Plan

A formal statement of what a business wants to accomplish and how it intends to accomplish it. A business plan includes a vision statement, which is a brief summary of the company's goals (usually some variation of "to make money by creating a superior product"). It also includes details of the products the company makes or intends to make, how it will sell them, and how much they will cost. A business plan nearly always includes a budget. Such plans are important to investors, who want to know how their money is supposed to be used, and to management to help keep a company on track.

business plan

a detailed statement of the objectives, proposed operations, resource requirements, financial forecasts etc. of a completely new business or an established business which is being developed further. It is particularly important to draw up such a plan not only to ensure that the owners/ managers of the business themselves understand clearly what is required to make a success of the venture but also that external parties, in particular providers of capital and loan facilities, can evaluate the viability of what is being attempted.

There is no set formula for a business plan but typical elements would include:

* name, address, products and objectives of the business; what product is to be supplied

* market analysis – customer needs, competitors, size of market etc. and proposed marketing/competitive strategy

* operations analysis – production, purchasing, selling etc.

* financial analysis – profit and loss forecasts, cash flow forecasts, capital expenditure requirements

* management information/business controls – recording procedures, monitoring progress. See BUSINESS STRATEGY.

References in periodicals archive ?
Today, visitors can see them in natural habitat enclosures," said Joseph Ferriolo, Director at Wise Business Plans.
However, borrowers can use various types of business plans to tell their story.
In an effort to provide all small business owners with a convenient way to create or revise business plans, Wells Fargo launched the Business Plan Center, which features two free tools: the Business Plan Tool, a step-by-step guide to develop a written business plan, and the Competitive Intelligence Tool, which provides business owners with key insight on competitors and the market for their businesses that can be used as part of the planning process.
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Another common reason why most entrepreneurs do not write business plans is what David Bangs (1993) called the "Man of Action Problem", the preference for doing things instead of thinking about them or even writing about them.
Shane and Delmer (2004) show that new ventures for which business plans were completed before any functional efforts began, have a lower hazard of termination than other new ventures during their first thirty months of life.
A business plan helps provide a road map-a sound investment approach based on the tenets of prudent investing-and the discipline to stay the course.
The centre headed by manager Karen Jones and youth coordinator Megan Lee, has forged links with area school boards in promoting education and business awareness at the high school level through the FedNor Secondary School Business Plan Challenge.
Business plans tend to be written when a person is thinking of starting a business or is planning to buy an existing business.
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