Definition Of A Business Plan

All other parts of the business plan stem from the model.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.The business plan describes to investors and financial sources all of the events that may affect the proposed venture.

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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.

Business plans for different organizations will differ somewhat in content and structure, but most are designed to address two fundamental kinds of questions: Founders and owners typically develop an initial business plan before startup.

They build the plan anticipating using it as a tool for supporting their requests for investment capital or loans to start the business.

A business plan can also represent a product line, an individual product, a line of service products, or some other part of a larger business entity.

For companies in private industry, the heart of the business plan is a business model and business strategywhich describe how and where the company expects to make and spend money.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 serves a multiplicity of purposes for the entrepreneur who is planning to start a business.It will help you allocate resources and set realistic goals for yourself.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.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.