In respect of a small business, people ask that if they are sole decision maker and financier of their business, why it is necessary to make a business plan? The answer is very simple, when your business plan is in your mind; things are not clear as they could be after writing them in a presentable shape. I will say that as a baby learn by listening, reading and writing, in the same manner a new business man needs to write down their ideas and goals to elaborate them in a meaningful shape and avoid the losses after spending the half of their capital.

Critical Components of a Business Plan

There is no fix shape for a business plan. It is flexible according to the needs and goals of a particular business. As a general layout, following components of a business plan may be advised.

• Summary
• Business description or introduction
• Business environment analysis
• Industry and market background
• Competitive analysis
• Market analysis
• Marketing Plan
• Operations plan
• Management summary
• Financial plan

Finance: All components of a business plan are equally important, but for all businesses, financial plan is the most important and critical. Like we make our monthly budget for our home and calculate for the range of income and expenditures, it becomes more critical in business environment. A business should have sufficient capital and a wise plan to spend them.

Marketing: Marketing plan is also important as the financial plan. It is same as you opened a shop and people do not aware of it, so who will come to buy the goods? If you are planning for an online or offline business, the effective marketing plan make it successful and fruitful. Market analysis shows the focus points for your business and implementation give the success to your business.

Open Business Plan: A business plan could be an open business plan or confidential. When your business invites financier publically, you will need an open business plan. You will need to describe the inside out of your business clearly to attract the financiers and share holders. In other cases all business plans are confidential.

Business Plan Should be Dynamic: A business plan should be dynamic and changeable. It means that you are to be able to make changes in the future. You may need to make changes for many reasons. For example changes in particular business industry, market or government regulations or changes in the cost and revenue analysis.

Originally posted 2010-01-06 12:37:54. Republished by Old Post Promoter