Entrepreneurship Management Question 3 A business plan is a formal statement of a set of business goals, the reasons they are believed

attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals. Business plans are decision-making tools. There is no fixed content for a business plan. Rather, the content and format of the business plan is determined by the goals and audience. A business plan represents all aspects of business planning process declaring vision and strategy alongside sub-plans to cover marketing, finance, operations, human resources as well as a legal plan, when required. A business plan is a summary of those disciplinary plans. For example, a business plan for a non-profit might discuss the fit between the business plan and the organizations mission. Banks are quite concerned about defaults, so a business plan for a bank loan will build a convincing case for the organizations ability to repay the loan. Venture capitalists are primarily concerned about initial investment, feasibility, and exit valuation Preparing a business plan draws on a wide range of knowledge from many different business disciplines: finance, human resource management, intellectual property management, supply chain management, operations management, and marketing, among others.[6] It can be helpful to view the business plan as a collection of sub-plans, one for each of the main business disciplines.[7]
Business Planning Process
Every planning process goes through a series of stages. In essence the aim is to complete each of the following steps:

Analyse the external environment Analyse the internal environment Define the business and mission Set corporate objectives Formulate strategies Make tactical plans Build in procedures for monitoring and controlling

An overview of the traditional business planning process is illustrated below:

Effective business planning has to begin with an honest and realistic appraisal of the current position of the business. The formal term for this is situational analysis and there are several planning tools and methods which are helpful in putting the analysis together. The true purpose of situational analysis is to determine which opportunities to pursue:

PEST / PESTEL analysis: identify and analyse trends in the environment Competitor analysis: understand and, if possible, predict the behaviour of competitors Audit of internal resources SWOT analysis: build on strengths; resolve weaknesses; exploit opportunities; confront threats Having determined the current position, the next step is to determine the direction of the business by answering the question where are we going? The outputs from asking this question are:

Vision: the non-specific directional and motivational guidance for the entire business. What will the business be like in five years time? Mission statement: a statement of the businesss reason for being. The mission statement is concerned with the scope of the business and what distinguishes it from similar businesses

Objectives: SMART objectives set out what the business aims to achieve

Goals: specific statements of anticipated results