Business planning is the process of developing a business plan in order to study the effectiveness of an investment. Business planning is the most important enterprise management tool that predicts its effectiveness.
The need for business planning arises when starting a new business, choosing new types of activity, obtaining loans, attracting investments, determining the degree of reality of achieving the desired results, etc.
The main form of business planning is drawing up a business plan. In a market economy, it is a working tool for new and existing firms of any size and any organizational and legal form. A well-written business plan illuminates the prospects for the development of the organization and answers the main question - is it worth investing in this project? It also helps to solve the following main tasks:
- to define areas of activity and promising sales markets;
- estimate all necessary costs;
- to identify the adequacy of personnel and the motivation of their work for the implementation of the set goals;
- analyze the financial position of the company;
- calculate all possible risks and anticipate difficulties.
Depending on the level, there are three types of business planning:
- strategic (a set of long-term solutions);
- tactical (mid-term planning, which is aimed at the implementation of strategic plans);
- operational (short-term, aimed at the implementation of tactical plans - the volume of production and sales, personnel, quality control, inventories, etc.).
There are several main methods of business planning: balance, forecast, target program, regulatory, economic and mathematical and economic analysis. The choice of the planning form depends on the stage of the company's development. If the firm is mature, then its business plans are large, at the initial stage of the organization's development business plans are small and unclear. Also, the choice of the form of planning is influenced by the qualifications of personnel, the characteristics of the firm's activities and other factors.
A business plan should be concise, specific, accessible in presentation and understanding, convincing to arouse interest in a partner or lender, and not be overloaded with technical details. In addition, it must meet certain drafting standards.
Sources of information used in business planning can be very different - market research, business press, information provided by the firm, databases, information from industry associations, international organizations, equipment manufacturers.
To draw up a business plan, in accordance with the international methodology, the following indicators are required:
- investment costs;
- sales and production program;
- the number of employees;
- current costs;
- the structure of total costs;
- the need for working capital;
- sources of financing.
Business planning is usually carried out jointly with the investor, since the fate of the project and its development depend on its goals. In the course of work, a feasibility study is also being developed. This procedure helps to assess the possibility of implementing an idea and draw it up on paper using calculations. With the help of business planning, you can avoid many mistakes and unnecessary costs, save time and effort.
