Business plan and its role in entrepreneurship
Successful organization and development of any business directly depends on competent planning. A business plan for an individual entrepreneur is a document that reflects the specifics of the company's activities, its financial indicators, development directions and possible risks.
Essence and method of compilation
Some novice businessmen argue that a business plan is necessary for a bank that can give a loan, investors, government agencies to open an individual entrepreneur and provide financial support. This statement is certainly true. But first of all, a business plan is necessary for the entrepreneur himself. If it is detailed, describes the company's activities in great detail, taking into account external factors and financial indicators, it will be much easier to organize the main business processes.
If you draw up this document correctly, you can think in advance about the main steps for implementing the project, prepare for the crisis, implement a product promotion policy and resist strong competitors. A well-developed plan for an individual entrepreneur makes it possible not only to carefully plan current actions, but also activities for the future. He is obliged to model the economic situation in the future, starting from the basic criteria - the turnover of tangible assets, interest rates, cash flows, exchange rates, etc.
Business plan structure
For an individual entrepreneur, the key task in drawing up a plan is the flexibility of supplying information, maximum accuracy of calculations and laconic presentation of data. In this case, it is very important to adhere to small volumes - about 15-25 pages of printed text.
A typical business plan consists of the following sections:
- Summary - a laconic description (1-2 pages) containing an outline of the object, areas of activity, expected profit after opening and conducting business and benefits for investors.
- Description of the goods and services provided - features and general characteristics, differences from similar products, benefits of use.
- Analysis of consumer demand - research of the sales market, potential customers.
- Activity of competitors - description of competing organizations and development of advantageous features, methods of struggle for sales markets.
- Marketing policy - a strategy for promoting and discovering new ways of development, methods of pricing.
- Production planning.
- Planning organizational issues - personnel policy, methods of motivation and control in the company.
- Financial calculations - sales volume, analysis of projected revenues and costs, movement of financial assets, payback period of the project starting from the moment of opening.
Business plan functionality
For a business plan, which is needed for a loan, it is important to clearly describe the financial flows, feasibility and benefits of the project. Given the practical side and significance, such a document will model possible deviations, methods of development and overcoming various kinds of difficulties, which is very important for an individual entrepreneur.
In order to correctly draw up a business plan, it is important to adhere to the main function of strategic planning - the ability to work in the best possible way, based on the key principles of the business plan.
This document is needed not only for the presentation of the company, but also for the continuous process of stable development of a business entity.
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1. Description of the methodological foundations of research on the development of a business plan
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1. Business plan and its role in entrepreneurship
For the effective and long-term functioning of the enterprise, as well as to achieve financial stability, business planning is necessary. When organizing his business, each entrepreneur needs to have an idea of the needs for financial, labor and material resources and their sources, as well as be able to calculate the efficiency of the use of resources in the process of the firm's work.
In a market economy, it is impossible to achieve a highly stable result if there is no way to effectively plan activities. An important role here is played by the continuous collection and accumulation of information both about the position of competitors in the target markets and their condition, as well as about their own prospects and opportunities. In other words, in today's rapidly changing economic situation, it is extremely difficult to achieve success without planning your actions and without predicting the consequences.
Planning - designation of the goal of improvement to the object of management, means, methods and ways of achieving it, as well as the creation of a project, an action program of varying degrees of concretization for the short and long term. Most important is planning in business and commercial areas, where long-term forecasting and preparatory developments are necessary, which precede the first steps of the organization.
A business plan is a visual, precise and concise description of the goals of the enterprise being created, as well as their methods of achieving. This document clearly defines the strategy and tactics of the organization's development, comprehensively and thoroughly develops the financial and economic aspects of the strategy, and provides a feasibility study for specific actions and measures. Statement of tasks taking into account the financial capabilities of the enterprise is a distinctive characteristic of a business plan as a strategic document. The possibility of implementing and implementing a business plan is possible provided it is secured with the required financial resources. It is financial resources that determine the direction of ideas that are explored in the first stages of developing a business plan.
The business plan provides an opportunity to demonstrate the profitability of the developed project and attract investors and potential financial partners. The main goal of a business plan is to substantiate the entrepreneurial viability of the enterprise being created, and, consequently, to convince investors that it is possible to achieve the goals outlined in the project. Since an investor is ready to invest his funds only in a project that guarantees profit maximization, it makes sense to take the development of a business plan extremely seriously.
Fig Purpose and application of a business plan
Unfortunately, the level of banks' trust in Sole Proprietorships is still low and leaves much to be desired. And a large number of credit bankruptcies during the financial crisis made the requirement to provide a business plan for individual entrepreneurs when receiving a loan one of the main conditions.
What is a business plan and why is it an individual entrepreneur?
The business plan of an individual entrepreneur should reflect in detail the state of affairs - the cost of fixed assets, cash flow, purchase and sale of goods and services.
How to write a business plan?
To draw up a full-fledged business plan when receiving a loan by an individual entrepreneur, in principle, an elementary documentary understanding of planning the income and expenses of a business is sufficient. However, the practical value of such a business plan will be low:
- the possibility of data modeling disappears, because for this you have to manually rewrite the document each time
- such a business plan does not reflect the full state of affairs in the business - the main funds and funds, such indicators as depreciation are not taken into account.
- Simple business planning deprives an entrepreneur of the most important thing - the ability to strictly follow the chosen path, based on a previously written and carefully written business plan.
For business planning to become an integral part of the business, you should make the most of the opportunities that modern software provides. Electronic business planning is becoming a powerful business tool.
Business Plan Writing Software
Of course, there are many professional programs for drawing up business plans, but they are not suitable for the average Russian entrepreneur due to their high complexity and prohibitive cost.
The most suitable option for writing a detailed and professional business plan is Microsoft Excel. This software product provides ample opportunities for mathematical calculations, moreover, presented in a readable form.
Beginning entrepreneurs often ask the question, do they need a business plan to open a sole proprietorship or not? To start your own business, you will need step-by-step instructions, especially at the initial stage. The business plan reflects what expenses are coming in the near future, what profit an individual entrepreneur can get, as well as long-term development prospects.
What is a business plan
Beginners usually choose such a legal form as IE. For example, a surveyor will be able to earn better money alone than in a large firm. The same can be said for many other professionals. Moreover, if an individual entrepreneur plans to engage in trade, then such a document will also help determine the scope of work, identify competitors and demand for products in a particular region.
A business plan is more a business term than a legal one. The law does not oblige to draw up any plan for conducting its activities. However, all successful entrepreneurs are unanimous in the opinion that such a document is necessary, at least to achieve minimal goals. What is the document and is a business plan needed to open an individual entrepreneur?
It reflects the following points of future entrepreneurial activity:
- start-up costs for setting up an individual entrepreneur;
- field of activity;
- level of competition;
- losses and profits for a certain period;
- probable risks;
- payback periods.
Each entrepreneur composes it according to his own scope. The document can take into account various circumstances that are of financial importance. An example of drawing up a business plan for an individual entrepreneur can be found on the Internet.
As a financial plan, a document is required in the following cases:
- when receiving a loan from a bank;
- when requesting a subsidy through the employment center.
When determining the amount of allowable subsidies and the possibility of issuing a loan, lenders first of all study the specified document. It shows how all risks are taken into account, and what profit an entrepreneur can get. And, accordingly, how quickly the loan funds will be repaid.