LECTURE ESSENCE AND STRUCTURE OF BUSINESS PLAN

1.The concept of business – plan 2.Contents (parts) of business plan

1.The concept of business – plan

In world practice, business plan is developed based on the standard requirements: simplicity and clarity of the plan; adequacy, reliability and accuracy of information; validity and objectivity; achievable goals; completeness; prospects; optimal and flexibility, control.

Today, business plans, without losing its traditional purpose, developed by virtually all leading foreign companies on an ongoing basis.

Business plan is called the document containing the economic justification of enterprise development, release of new production or implementing other business ideas.

Main objectives of business plan:  determine the specific activities of the company, the markets, and the place of business in these markets;  formulate a long-term and short-term business objectives, strategy and tactics;  determine the composition and indicators of the goods and the cost of their development and implementation;

 determine whether the existing staff of the company and the conditions of their work motivation;  assess the financial position of the company and to assess whether the existing financial and material resources, the possibility of achieving the set goals;  foresee the difficulties that may arise and prevent the practical implementation of the business plan.

They are like the backbone of the entire system in-house planning. Business plans are developing plants and offices, manufacturing units and affiliates. Business plans are structural units are analyzed and summarized in the business plans of companies.

The increasing role of the business plan in the planning especially clearly manifested in the last decade. It was connected to the following reasons: 1.The increase of the external economic environment has required companies to its high flexibility in the management, the ability to continuously calculate a variety of options of management decisions in the complex, taking into account all factors.

2. The role of strategic marketing, the ability to find and evaluate possible new, promising areas of economic activity. But there is little to find a promising opportunity in the market, must also assess what it's worth. To do this, and need a business plan.

3. Expanded autonomy of production units. Under current conditions to see all the options of economic development can only be at the lower level, and to assess their attractiveness in terms of the corporation as a whole, to analyze with regard to the interests of owners of capital can be at the highest level. Separation of business systems integration solutions, if necessary on the part of the investment policy and has made a business plan as a popular tool for business planning.

Business plan - a plan of business development for the period in which the subject stated, the main objectives, strategies, and geographic areas of economic activity, which sets pricing, capacity and market structure, conditions of supply and procurement, transportation, insurance and processing of goods, factors influencing growth decline of income and expenditure for the group of goods and services that are the subject of enterprise activity.

Business plan always is probabilistic in nature, suggests the possibility of different variants of conduct of the enterprise. This is its fundamental difference from the feasibility study, in which there is a fairly tight linkage to a specific technology, there is a specific project documentation, etc. Business plan - this plan possible actions of the enterprise market.

2. Contents of business plan Standard business plan has a certain structure, the sequence of sections. The business plan includes the following content blocks:

Resume - introduction of the subject of a business plan, that is justification for appeal of a new business, commercial or investment project proposals for the destination of the business plan. From the beginning, the business plan is justified, what resources are or what help is needed a new business, and what impact this business will be able to provide.

The marketing plan shows the results of market research for new business, assesses the profile of the consumer's strengths and weaknesses of competitors, geography, and other market factors. It reflects the results of marketing research, which lies at the heart of the business plan.

The purpose of this section of the business plan - to show that the market has a sufficient number of consumers of the product, to prove that consumers prefer this particular product or brand name competitors, to show to what should be the main emphasis in the strategy of advertising.

Operational plans - plans that create and develop the production of goods and services that are the subject of a business plan. It describes the mechanism of startups, the sequence of steps to set up production facilities, organization of distribution channels, forms and advertising budget, supply chain, composition and size of the necessary labor force, etc.

The financial section of the business plan must include the three major documents (income and expense plan, plan cash flow and balance of payments), as well as preliminary observations - a kind of commentary on the financial terms of business (payment arrangements with suppliers and customers, loan repayment period and interest on them, methods for determining the cost of production, etc.).

One of the main instruments of the financial section - it's income and expense plan It shows financial feasibility of new business and being prepared, using the sales forecast and the corresponding production costs.

If the completed version of the business plan should begin with a summary, the process of its development is completed normally resume. The main thing here - the correct formulation of the objectives of the business plan, quantitative and qualitative, financial and nonfinancial, as well as their rationale for using an appropriate market research, the results of which could confirm the validity of the assessments made, the initial financial results before conducting any financial calculations.

Business plans are the basis of in-house planning. They are designed for departments, divisions, subsidiaries, of specific projects to develop new products or expansion of production and other activities of the enterprise.

KEY TERMS 1. BUSINESS PLAN 2. RESUME (PART OF THE BUSINESS PLAN) 3. THE ORGANIZATIONAL PLAN 4. FINANCIAL PLAN 5. PLAN OF COMPETITION 6. DEVELOPING A BUSINESS PLAN 7. OPERATIONAL PLAN 8. MARKETING PLAN 9. CONTENTS OF BUSINESS PLAN