Commercial activity. The importance of a business plan in entrepreneurial activity (lecture notes)

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Commercial activity. The importance of a business plan in entrepreneurial activity (lecture notes)

Lecture notes, cheat sheets

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19. The value of a business plan in entrepreneurial activity

Business planning is necessary to achieve financial success, for the long-term and efficient operation of a firm or enterprise. A modern entrepreneur should be able to determine the prospects for the development of his enterprise, justify the feasibility of obtaining bank loans and attracting investments, and also be prepared for structural changes within production.

The program of action or plan for the implementation of entrepreneurial operations is called a business plan.

Business plan is a permanent document in which necessary changes and updates are made, depending on changes in the economic market, as well as on changes occurring within the company. Each company, regardless of its size, draws up a business plan, although a small company can attract specialists from consulting organizations to draw up a business plan. When drawing up a business plan, it is necessary to take into account the concept of the company’s development, its financial and economic aspects, its technical and technological capabilities. Having a business plan allows a businessman to justify the feasibility of carrying out a business operation, correctly calculate sales volumes, profits and income, determine the source of financing for the operation, and select a team to implement the plan.

The business plan is most actively used in the process of finding and attracting investors (shareholders, sponsors, creditors). Investors are usually offered a summary of the business plan, which is a difficult task to prepare. First, the entire plan is developed and the main measures for its implementation are determined. From this, the main important points are highlighted, which are included in the summary, which is provided to investors. According to this material, investors will draw conclusions about the effectiveness of the project.

When forming a business plan, a businessman will choose the product or service that represents the main purpose of the operation. After choosing the main product, the entrepreneur calculates the quantity of products that he has the opportunity to produce, and calculates the expected profit received after the sale of this product. In the process of forming a planned operation, a businessman comes to the decision of the main question: is it worth starting this business.

Authors: Egorova E.N., Loginova E.Yu.

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