Business-plan is a document describing definite business-idea and possible ways of its realization. The main function of this document is in valuing the degree of real realization of this idea, and if it is real, what profit the project promises and what risks it entail.
The importance of all-embracing and considered business-plan cannot be re-appreciated. Many things depend on it: external financing, investments from the side of suppliers, managing operations and finances, business developing and marketing and when all is said and done realization firm’ mission.
Though, in spite of critical importance of a business-plan, many businessmen delay making up written document. This can be explained by the absence of knowledge from what to begin and that is why they find different excuses of their inactivity – for example, the shortage of time or rapid market developing, and as a result of it any business-plan will have become obsolete by the moment of its writing and confirming. While, business-plan is one of the corner-stones of modern business world and the work over it cannot be avoid.
Very often it can be heard that the main aim on making up a business-plan is to attract financing in one or another form. Nevertheless, the significance of business=plan is limited with the necessity to convince investors that the enterprise has a business-idea, which is worthy of investing. It has the great meaning for managing personal of the firm, because it exactly determines the aims of the enterprise and also the terms and ways for their achieving.
There are four pain reasons for making up a business-plan:
1. The possibility to foresee and eliminate problems before their appearance. During the work over the business-plan forecast reports are made up, actual indicators are compared with planned ones, market tendencies are analyzed, and this allows to foresee some snags, which can expect the firm in future;
2. Opportunity for attracting investments, necessary for business-idea realization. No one investor or creditor will quit with his money, if convincing proofs of the fact his investments will be repaid with the high degree of probability are not presented in written form.
3. Business-plan is a standard document of modern business world, the “face” of an enterprise, which is paid attention to in the first turn.
4. Opportunity for using the business-plan as an instrument of control and managing in the internal activities of the firm.