Meaning and definition of business plan
A business plan is a decision making tool which can be delineated as a formal statement of a set of business goals, the reasons for they being achievable, and the plans for achieving these goals. Moreover, a business plan may also consist of background information about the organization attempting to achieve the goals.
Also, business plans can also target alterations in perception and branding by the customer, tax-payer, client, or larger community. When the presented business is to presume a major change or when planning a fresh venture, a 3-5 year plan is required or investors will seek for their annual return in a period of 3-5 years’ time.
Content of a business plan
A business plan does not feature a specific content. To a certain extent, the content and format of any business plan is determined on the basis of goals and the audience. A business plan indicates all the aspects of business planning process that declares vision and strategy along with sub-plans to include finance, marketing, operations, human resources, and a legal plan, when needed. A business plan is, therefore, a summary of those disciplinary plans.
A business plan’s format depends on the presentation context. It is very common for businesses, specifically, start-ups to feature three or four formats for a single business plan. These are:
- An ‘elevator pitch’, is a three minute summary of the executive summary of the business plan. This is generally used as a conundrum to arouse the interest of potential funders, strategic partners, or customers.
- An oral presentation, an expectantly entertaining slide show and oral narrative projected to trigger discussion and concern prospective investors in reading the written presentation. The content of presentation is generally restricted to the supervisory summary and some key graphs indicating financial trends and main decision making benchmarks.
- A written presentation, an in depth, well written, and pleasingly formatted plan projected for external stakeholders.
- An internal operational plan, a comprehensive plan delineating details required by the management but might not interest external shareholders. These plans feature a rather higher degree of candor and informality as compared to the version aimed at external stakeholders and others as well.
- Debt ratios
- Liquidity ratios
- Profitability ratios
- Asset management ratios
- Cash Flow Indicator Ratios
- Market value ratios
- Financial analysis
- Business Terms
- Financial education
- International Financial Reporting Standards (EU)
- IFRS Interpretations (EU)
- Financial software
Most WantedFinancial Terms
- Most Important Financial Ratios
- Debt-to-Equity Ratio
- Financial Leverage
- Current Ratio
- Interest Coverage Ratio (ICR)
- Solvency Ratio
- Break-even Point
- Debt Service Coverage Ratio
- Receivable Turnover Ratio
- Return On Capital Employed (ROCE)
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