Structure, content and principles of developing business plans
Purpose and objectives
Purpose - to reveal the role of business planning in the development of an organization, the structure and stages of drawing up a business plan, to indicate the need to monitor planned indicators.
1. Expand the role of planning as a management function.
2. Describe the structure and stages of drawing up a business plan.
3. Indicate the need to monitor planned indicators to achieve the set objectives.
Table of Contents
2. ... The role of business planning in enterprise development.
2. ... The structure of a business plan and the stages of its preparation.
2. ... The role of economic analysis in the development and monitoring of key targets.
The role of business planning in the development of an enterprise
Business planning allows you to achieve your goals, the main one of which is profit maximization.
Planning is a necessary element of every organization and is a management function.
Investment Business Plan
In a market economy, an investment business plan is a working tool for both newly created and existing organizations. The business plan encourages the entrepreneur to carefully examine each element of the proposed risky market activity. We can say with a high degree of confidence that this process will reveal many weaknesses and gaps, the elimination of which will have to be given significant attention. Where it is impossible to cope with such problems, the very fact of their identification will make it possible to make a decision to abandon this activity even before funds are invested in it.
As a rule, the need for a business plan arises when preparing applications for existing and newly created organizations for a loan, substantiating proposals for the privatization of state organizations, opening a new business, defining the profile of a future organization and the main directions of its commercial activities, re-profiling an existing organization, choosing new types, directions and methods of carrying out commercial operations, as well as drawing up prospectuses for the issue of securities (shares, bonds) of privatized and private organizations, entering the foreign market and attracting foreign investment.
The purpose of developing a business plan is to plan the economic activities of the organization for the near and distant periods in accordance with the needs of the market and the possibilities of obtaining the necessary resources.
A business plan helps an entrepreneur to solve the following main tasks:
- to define the specific directions of the organization's activities, target markets and the place of the organization in these markets;
- to formulate the long-term and short-term goals of the organization, the strategy and tactics for achieving them, to identify individuals responsible for the implementation of the strategy;
- select the composition and determine the indicators of goods and services that will be offered by the organization to consumers, assess the production and trade costs for their creation and implementation;
- identify the correspondence of changes in personnel the composition of the organization to its needs, the conditions for motivating their work, the requirements for achieving the goals;
- determine the composition of the organization's marketing activities for market research, advertising, sales promotion, pricing, sales channels, etc.;
- assess the financial position of the organization and the correspondence of the available financial and material resources to the possibilities of achieving the set goals;
- to foresee difficulties, “underwater e stones ”that can interfere with the practical implementation of the business plan.
Writing a business plan is very essential for organizing work on its implementation. One should not neglect the preparation of a business plan even in conditions when the market situation is changing quite quickly. Planning an organization's activities with a business plan is useful for the business itself, i.e. encourages managers to fundamentally study the prospects of the organization, more specifically to define their goals and ways to achieve them, allows for a clearer coordination of efforts to achieve the set goals, formalizes the duties and responsibilities of all managers. When developing a business plan, the performance indicators of the organization are determined, which are necessary for subsequent control, which makes the organization more prepared for sudden changes in market situations.
The main advantage of business planning is that a properly drawn up plan of this kind gives the prospects for the development of the organization, i.e. ultimately, it answers the most important question for a businessman: is it worth investing in this business, whether it will bring income that will pay off all costs.
Depending on the focus and scope of the business, the scope of work on drawing up a business plan can vary in a fairly wide range, i.e. the degree of detail can be different. In one case, the business plan requires less detailed elaboration; some sections may be missing altogether. In another case, the business plan will have to be developed in full, carrying out labor-intensive and complex marketing research for this. When drawing up a business plan, the degree of participation of the manager himself in this process is important. This is so significant that many foreign banks and investment funds refuse to consider applications for the allocation of funds at all if it becomes known that the business plan was prepared by an outside consultant, and only signed by the head.
This does not mean that you should not use the services of consultants. On the contrary, the involvement of experts is highly welcomed by investors. We are talking about something else - drawing up a business plan requires the personal participation of the head of an organization or a person who is going to start his own business. Engaging in this work, he kind of simulates future activities, checking the feasibility of the entire plan.
A business plan is a promising document and it is recommended to draw it up for at least a number of years in advance. For the first and second years, the main indicators are recommended to be given in a quarterly breakdown, and, if possible, even monthly. Starting from the third year, you can limit yourself to annual indicators.
Submit your good work to the knowledge base just Use the form below
Students, graduate students, young scientists who use the knowledge base in their studies and work will be very grateful to you.
2) As the business expands, more working capital is needed to increase inventory and lend to consumers. This increase in cash does not necessarily lead to an immediate increase in profitability.
The financial section of the business plan consists of three main financial statements:
balance sheet that reflects the picture of the solvency of the business;
a profit and loss account that provides information on profitability;
A cash flow statement that provides information on the ability of a business to generate cash and meet its financial obligations.
Certain assumptions need to be made before preparing financial statements. The more accurately the business environment and production system is described (as reflected in the initial sections of the business plan), the more reliable these assumptions will be.
Assumptions should be made about:
- calculating the cost of a unit of goods;
- cash flow assumptions;