Business plan: definition, types and content
A business plan is an important written document that describes and outlines the future of your company. The plan should explain the business strategy and your key goals to get you from where you are now to where you want to be in the future. A business plan will help answer questions such as:
- How to make a business more profitable, get more resources or increase assets?
- What are the plans for the development of your target market?
- Where do you see your business in one, three or five years?
- Who needs it and when
The three most important goals of a business plan are: creating an effective growth strategy, identifying future financial needs, attracting investors and lenders. A well-thought-out business plan will help you take a step back and think objectively about the key elements of a business in any area, and help you make decisions as you move forward.
There are several classifications of business plans, let's look at the main types depending on the goals, format and volume.
Types of business plans depending on the audience
As the name suggests, the internal business plan is exclusively for the employees of the company. They can be specific to certain departments such as marketing, HR, manufacturing and focus primarily on the company's goals, as well as the people and processes aimed at achieving them.
Designed for investors, banks and partners. They usually contain detailed information about the background of the company, finances and the general activities of the organization.
Types of business plans depending on the volume
Another classification is built depending on the size and depth of the information they contain:
A standard business plan is a voluminous document, with all aspects of the company's activities and development. Most external plans fall into this category as they often need to be detailed in order to be presented to people outside the company. The standard plan is usually presented to banks and any potential investors as it gives a complete picture of the company, future financial projections and helps to obtain financing. Compiling it can be a tedious task as it requires a lot of time and effort.
This is an abbreviated version of the standard business plan. It includes the main points of the standard document and summaries of all sections. This is a compact document with a strong focus on achieving milestones and tracking finances. Compiling such a document is easier, faster and is considered more efficient than a standard plan. It is flexible and can easily be reviewed as many times as needed, allowing for adjustments to milestones.
The main elements he focuses on are business development strategies, methods of achievement, key metrics and financial performance.
Gradation by purpose and format
- Business plans on one page
A one-page can be described as an outline of an economical one. It is also called a business presentation or executive summary. It is sometimes used as a brief overview of your business for suppliers, partners, employees, and as a resume for banks and investors. It contains information about the target market, offers, demand pattern, main planning steps and forecast of main sales.
- Startup business plans
It can be defined as an abbreviated plan with elements of the standard plan included to find investors. The main purpose of a startup plan is to indicate the steps needed to start a business. Later, it should also serve as a blueprint to help evaluate the investment. The launch plan should include information about the company, its products and services, a detailed marketing analysis of the industry, market patterns, competition, SWOT analysis, management biography, their responsibilities and roles, full financial details and their analysis, and payback projections and funding aspects.
- Strategic business plans
Contains detailed information about strategies and how to implement them to achieve the goals and objectives of the company. This is an internal plan that will focus entirely on strategies with little to no regard for finances. An effective strategic plan will begin with a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis to help you better understand the factors that play an important role in your business decision-making process.
- Operating business plans
An operations plan is a type of lean plan that focuses on the implementation process, milestones, project deadlines, management responsibilities, departments, and employees. It also focuses on the funding needed to reach milestones. This type is also called an annual plan because businesses often use it to plan and set milestones and implement them for the coming year.
- Business Growth Plans
Compiled when a company seeks to enter a new market. In essence, this is a startup plan, but for a new segment of your business. It can be seen as an expansion model as it is focused on long-term business goals.
Business plan structure
Different types of business plans can have different structures. So, for example, consider the structure of a traditional business plan, taking into account the requirements of the UNIDO international standard:
- Relevance of the project
- Market analysis
- Marketing plan
- Organizational plan
- Production plan
- Financial plan
- risk Analysis