Business planning plays a very important role in today's society, and in determining the degree of success realised by a new or small business.
A business plan is a written document that articulates a business concept, market potential, opportunities, growth strategies, financial requirements and management for a venture.
The business plan is an essential tool for the entrepreneur and all other managers and businesses as it serves as a tool to both the internal management needs of the private entity and the informational needs of external entities that are critical to a ventures success. The business plan has been defined as being:.
"the culmination of a lengthy, arduous, creative and iterative process .
that can transform the caterpillar of a raw idea into the magnificent .
butterfly of an opportunity" (1) (Jeffry A Timmons).
The purpose of the business plan is to clearly define the business/company in as much detail as possible and how the business/company will operate in the current market, so as financiers will be able to see the business opportunity and how much financing it requires.
More specifically the business plan can be viewed or seen as a guiding analysis or document because it establishes the ventures business objectives, goals, strategies and approaches to achieving these objectives and goals. In fundamental nature it analyses the three key questions a company should know the answers to prior to writing their business plan. These are:.
• Where are we now?.
• Where do we intend to go?.
• And, how do we get there?.
Essentially a business plan is thought to distil your ideas, rank your priorities and clarify your objectives.
The business plan is normally comprised of four main sections each with several sub-sections, which aims to act as the ultimate guide to the entrepreneur/manager.
The four main areas" can come under these headings:.
• introductory elements.