Business Plan
A business plan is a tool that is used to communicate a business idea or plan to internal and external customers. In essence, it’s an instrument that will let other people know about your ideas and how you will succeed with your plan. A basic business plan will have five different components.
The five components are:
- Strategic Plan
- VISION: Paints a clear picture of how your business will function in the future. It incorporates personal values for family, community, environment and income.
- MISSION: Roles your values, current situation and vision into a set of principles that describe your business.
- GOALS: In addition to dreams, everyone has goals. These drive why you choose to do what you do. Goals can either be business or family oriented.
- Operations Plan
- This describes the production management and the kind of resources you have to produce as well as where, what and how it is produced.
- Marketing Plan
- How you are going to sell what you produce? It helps identify costs, set price goals, examine production and price risks. The plan needs to be revised and evaluated every year to see if your selling strategy was successful.
- Personnel Plan
- Who will manage the business and provide labor? This part of the business plan should include job descriptions and compensation plans.
- Financial Plan
- The financial plan will demonstrate with numbers, current and projected, if your business will be financially successful. Essentially, a financial plan will validate that your other plans will be successful and you will be able to repay borrowed funds.