Business Financing: The Business Plan

Tuesday, September 7th, 2010 at 11:36 PM

What is the business plan and what value it possess for the potential investor?

The Business plan is a document, the program of actions of management, the scheme and analytical calculation of realization of business activities and actions of firm which contains data on firm, the goods, their production, marketing, market outlets and the organization of effective operations.

The enterprise Business plan is the basic management tool of firm which determines efficiency of activity of the enterprise in concrete area and a concrete segment of the market. Development of the business plan of the enterprise it is also effective planning of business that allows to manage the enterprise competently and effectively.

What for to write the business plan, the purposes of drawing up of the business plan:

To survive in the conditions of a rigid market competition, the enterprise should be as much as possible skillful and react to all changes which occur both in the market and in the enterprise quickly. It is possible only when such conditions are satisfied:

the investor and enterprise administration are capable to estimate correctly and adequately the present financial position of the enterprise, an actual place of firm in the market and are also capable to trace and analyze tendencies of changes of market situations and the real reasons of these changes;
firm management accurately realizes strategic and tactical targets and also tasks to which achievement the enterprise should move;

the management and firm management correctly use business planning for strategy development of enterprise, skillfully determine the strategic and current purposes of firm, strictly supervise accomplishment by all structural divisions of each step of the business plan for achievement of the priority purposes;

the investor, the management and enterprise management understand an essence of processes which occur in the market, in firm and in an external environment.

The enterprise Business plan is constituted both for external and for the internal purposes. More often, it is known to do like this in the world of business, firms begin business plan drawing up in two cases: for the investment attraction and when it is necessary to obtain the credit in bank.

The enterprise or investment project Business plan is constituted not only for the external purposes. The Business plan for the external purposes is a justification of requirement of firm in attraction of borrowed funds or investments, it is demonstration to all interested persons who have resources and possibilities, business potential, it is presentation of the project and attention directing from investors and bank to the investment project, their belief in sufficient efficiency of such project and also in an appropriate skill level of management of the enterprise.

Each investor wants to estimate advantage of the investment project and to estimate a ratio of investment risks and the received profit on the project. The most simple and acceptable method to estimate the investment project is to study and analyze the investment project business plan.

It is very crucial that government, despite this recession is not leaving to help small businesses. And small business grants can be a real helper today.

But, surely, you should remember that today the fight for small business grants as well as for other types of grants has become harsher. This is logical – more businesses need them. So before you start your fight for the small business grants, please check out this blog for more info about grant industry.