The Basic Plans Describing a Business
Basic business plans are a very important part of any business’ success because it provides both a plan for the future and organized documentation of what has occurred in the past. Contrary to what many people may think, a basic business plan is not something that is only important during a business’ initial developmental stages. Business plans actually contain crucial information about the business that is relevant and useful at all points during the business’s lifetime. A bad business plan can have many negative implications because it will reflect poorly on the business and its chance for success, while a good business plan will serve as evidence that the business is solid and accomplished.
The Elements of Basic Business Plans
Basic business plans essentially provide a coherent, specific, yet somewhat concise, definition of what the business is. The plan also contains a listing of the business’ goals, and therefore can be used in presentations about the business, essentially acting as a resume of the business, detailing what it has accomplished and what remains on the agenda for the future. Some of the key elements that should be included in any basic business plan are a current and pro forma balance sheet, income statement, and cash flow analysis.
Aside from being a specific description of the business, the business plan can have very functional purposes, as well. After looking over a business plan, better decisions can be made concerning allocation of resources, solutions can be created for dealing with unforeseen circumstances, and the business can be more efficiently in general. It is recommended that the business plan contain information about how the business plans to proceed with repayment of borrowed funds, so the business plan can also play a part in loan applications.
The basic business plan is a succinct statement of purpose for the business. It clearly describes the operation and its goals so that personnel, suppliers, and any other interested persons can be informed about the direction in which the business is heading and the projects on which the business is focusing.