Business plan: its importance and its components

by Augustus Callen

Are you planning to open a new business? Are you confused on how to do it properly? Do you have trouble formulating your business plan? If this is the case, you are one of these neophyte entrepreneurs who have experienced difficulties in formulating said document.

The opening of a new business is not so easy because it involves many hard processes and work. In addition to looking for the funds needed to finance your operation and hire credible employees to help you manage your business, you should also formulate your own business strategies.

It is important for businesses because it serves as a compass that helps executives and stakeholders in all actions and decisions they are pursuing. It serves as a reference that guides shareholders, executives and workers.

Some businessmen and entrepreneurs do not fail to discern the importance of the document. To learn more about importance, read this article.


To collect funds. If you wish to obtain a loan from banks or financial institutions, it is one of the conditions for obtaining a high amount. They want to know how you can pay them, how profitable business is and how do you attract customers. The majority of them are reluctant to put their money in a business without seeing a convincing and effective business plan.

Benchmarking. It serves as a map that directs stakeholders and executives in a common direction. He guides them about the right path and provides measures when they get away. It guarantees that all employees, executives and shareholders are on the same way on what they intend to reach. Through it, they can assess progress and make projections based on the current performance of society.
Components you need to take into account:

It should include concise information on the business business, the industry where it intends to penetrate and business trends. You may need to conduct research and feasibility studies to get the desired need information.

Declaration of mission. You must detail the objectives of the proposed companies and services and services. You must also plan your target market.

Provide detailed information about its stakeholders, owners, business advisers, managers and investors. Some companies even attach curriculum vitae of these people.

You must provide a brief information about the company’s operations. Describe the daily operations of the company, suppliers, suppliers, purchase of raw materials, payment terms with creditors and your customers.

You should also attach your start-up cost and cash flow. Most often, these amounts are presented in a large book type or spreadsheet.

Provide concise information about your product and your services. Describe its attributes and what makes it unique to other products and services found on the market.

Rival / competitor companies. Give a brief description of your competitors, their weakness and strength and their ways of competition.

Marketing strategy and plan. Describe your tactics to attract customers, strengthen sales and build customer loyalty.

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