Market is an integral part of economy in almost any country: if there is no market – there is no development. It is assumed that market is a self-regulating mechanism, but at the same time there are a lot of market management tools. In general, these tools belong to the government, but entrepreneurs also have tools for the market management. And aq business plan is one of them.
Many people believe that a business plan is a document that helps you to get a loan or investment. In fact this is not true and such a simplified understanding of business planning doesn't show its advantages and possibilities to the full. Such confusion causes numerous errors in management decisions, and thus it results in undesirable financial results.
To describe the structure of a business plan briefly, we can distinguish three important sections:
- An idea/project description;
- A marketing plan;
- A financial plan for the project.
Each of these sections contains important information about the project.
An idea/project description is an introductory section, which includes both quantitative and qualitative characteristics of the project. This section is very important because it identifies distinctive features of the project. The section presents basic information that will be analysed and fully considered in the business plan. It is this section which forms an initial opinion on the project, the quality of its study.
A marketing plan is one of the most important sections of the business plan, too, as it contains information that allows to control the market. This section should contain full information about the structure of the market, its key players and each player's market share. In addition, it is necessary to segment the market in this section and, most importantly, to find their target audience, that is to define the market segment, which will cost less to enter and will give the best return. It is also obligatory to identify those sales tools that reflect the features of the chosen activity best.
Marketing plan information is a "map of the market and market instruments" for an entrepreneur. If you have this information there is no difficulty for you to define the right business strategy, and, in fact, this "map" is the very business planning tool, which allows you to control the market.
Financial plan is also a vital part of the business plan. It contains information about all costs during the period of project planning. In addition, this section involves the calculation of project performance indicators and is the final part of the project since it identifies expected return.
A high-quality business plan is the first step towards financial prosperity of the project, because a business plan is a source of information to rely on in the competition for market share.