This article answers the questions – what is a business plan? and describes the different types. It also outlines the importance and what a business plan should cover.
The most successful firms around the globe have business plans.
It is so unlikely for a business to be successful or gain its standard without having a business plan enforced by the business management.
In some businesses and circumstances, business plans act as a guide, but that is notwithstanding that they could stop functioning.
Whilst you might be confused about what a business plan is and trying to understand more about it, this article will be addressing everything you need to know about business plans using the baby steps to explain business plan types, main purposes, importance, and finally, how you can write one for your business or company.
So, without wasting time, let us proceed –
What Is A Business Plan?
What is considered to be a business plan is a document organized by a company that describes its aim, goals, standards, objectives, financial statements, and mission and vision.
A business plan contains guidelines that cover a company’s in and out as well as how a company operates in every situation.
Also, according to statistics, a business plan acts as a tool to attract investors and help a company to get financing from financial institutions if there is or will be any need in the future.
Now that you know what a business plan is, you must know about the types of business plans.
Types Of Business Plans
Although there is just a definition of a business plan, there are types that you should know just in case you need to apply any of them in your company, hence below are the types of business plans –
Contingency planning in a business is carried out when something unexpected happens or when a business strategy is needed to change because an unexpected event took place.
According to business experts, this type of planning is referred to as a ‘special type’ of planning in business. In circumstances where a change in a business plan is needed, Contingency planning is applied.
However, some would prefer to apply contingency planning in their business when changes can not be foreseen.
Actions needed to occur in a business plan as a result of strategic planning. For strategic planning, you need to key in the ‘smart’ work to achieve it.
Strategic planning starts with defining a mission and casting a vision. Strategic planning consists of an overview of a company. It is a foundation of a company and dictates long-term decisions in a company.
Strategic planning could happen after some years if not many. Also, strategic planning in business is applied to clarify and achieve the vision, mission, and values.
Every company plans about what is going to happen based on a situation, and so often, tactical planning is the business plan used in such a situation.
Moreover, tactical planning supports much on strategic planning because it lists out tactics that an organization needs to carry out.
Speaking of each and everyday action of a company, they are guided by operational planning. In often cases, operational planning is referred to in places where single-use plans and outgoing plans are discussed.
Single-use plans are created for business actions with a single occurrence, such as a marketing campaign.
Ongoing plans are created when there is a need for policies to approach marketing problems, rules to govern certain approaches, and procedures for completing particular objectives.
Main Purposes of a Business Plan
In a business plan, three purposes are needed to be executed, and without these purposes, there will not be any need for any business plan. Hence, below are the three main purposes of a business plan –
- Attract Investors
- Help in getting a business financed
- Establish a business focus and give it a standard.
Important Of Business Plan
The importance of a business plan starts from raising money for a company to communicating your business ideas to stakeholders.
The importance of a business plan is outlined below –
- To help raise money for a company
- To help identify any potential weakness of a company
- To help a company make a sound decision
- To communicate a company’s business ideas with stakeholders
- To attract money investors into the company
- To show how organized a company is
How To Write Business Plan For Your Business
Writing about a company’s business plan actually will cover every single thing about a company, so, below are what you should write about a company and can be tagged as a business plan –
- The executive summary
- Company description
- Market analysis
- Marketing and sales
- Service or product line
- Organization and management
- Financial projections
- Funding request
- Appendixes such as credit histories, permits, legal documents, licenses, and product pictures.
- See a step-by-step guide just for you.
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Frequently Asked Questions
Do Business Plans Fail?
Yes, business plans fail if a company does not stick to its plans or adjust as the occasion demands.
Can I Have More Than One Business Plan?
Yes, you can have more than one business plan for a single company, provided each plan does not affect the other.
So, now that you are well informed about a business plan, what are you still waiting for regarding writing a business plan for your brand? You can start by writing down your vision, mission, and aims, and go ahead with writing down your marketing strategy, then stick to everything you have as a plan as you execute them into your brand.