Why do I need a business plan

Novice entrepreneurs are faced with a concept such as a business plan. They do not understand why a business plan is needed. Some businessmen neglect compiling it. But in vain, because it contains all the basic aspects of the future company, that is, this document is a kind of tool for organizing and conducting business activities.

A business plan is a document that will help you analyze the chosen idea for realism and reasonableness. This document can be read by both external and internal users. The first category includes investors, banks and other financial and credit organizations. The second group includes founders, managers and other employees of the company. For the purpose of investing, a novice entrepreneur must demonstrate in a business plan the possibility of making a profit, the payback period of a project, possible risks when investing, and other indicators. At the same time, the document can be used as a tool for managing the company. Some successful businessmen achieved high results due to the fact that they acted strictly in accordance with the drawn up business plan. This document should also contain calculations that will allow you to evaluate the realism of this type of activity. The entrepreneur indicates in the business plan the possible costs and revenues, that is, estimates the costs of acquiring equipment, manufacturing products or providing services (works). Based on these data, you can calculate the approximate amount of net profit and payback period of the project. The document should also include information on possible risks, problems and possible errors. The document also stipulates ways to solve the alleged problems. In order for the business plan to be a kind of tool for conducting business, it is necessary to determine indicators with which it will be possible to control the operation of the enterprise. That is, a certain business strategy should be spelled out in this document that helps to withstand competition. When compiling a business plan, the strengths and weaknesses of the idea are identified. For example, the strengths include the novelty of the product (service), the cheap cost of material and raw materials; weak factors include high production costs, lack of experience, etc. This document is being prepared with a prospect of at least three years. It is not necessary to calculate net profit, sales and other indicators for each month, it is enough to do it quarterly. When drawing up a business plan, the founder or several should be present, since it is he who models his activities and projects it into life. The document should not be “embellished" prospects, even if the plan is drawn up in order to obtain assistance from investors. Remember that in the future, due to your actions, you may experience problems. Since the economic situation in Russia can change dramatically, a business plan is not a guarantee that the activity will be successful. Therefore, with a sharp change in the economy, it is worth revising decisions and making some adjustments to the document. A business plan is better to be paired with a specialist. From the foregoing, the answer to the question "why do I need a business plan" can be as follows: this document is a kind of instruction for a novice entrepreneur, a plan is being developed for the proper organization and conduct of business. With it, you can build a certain strategy, plan the expansion of your business and the modernization of production.