Business plan objective function consists in deciding what aim is purposed by elaboration. Then it should be formulated in writing form. The main purpose of business plan elaboration is economic activity planning for the next and further periods in accordance with market needs. Other aims can be different, as for example:
- size up chances to achieve definite results in a finished project;
- convince colleagues of a high possibility of achievement success;
- prove advisability of reorganization or creation of a new enterprise;
- attract attention and strengthen the interest of potential investors.
A business plan helps an entrepreneur to solve the following problems, concerned with firm functioning:
- to define concrete directions of activity, perspective market and the firm’s place on this market;
- to estimate costs of production and sale; compare with price and define potential profitability of a project;
- to display if the stuff is appropriate to achievement the aim;
- to analyze material and financial position of the firm;
- to count risks and provide for troubles.
The creator has to think over thoroughly the business plan's idea, its logical development, and the ideology of his business offer, project or program.
The author should imagine the audience, possible reaction and questions; answer those questions and oppose their speech in his mind. The one has to be a reporter and audience at the same time.
Depending on the aim of business plan, the author should prove its different parts. If the plan is intended for internal usage, the idea’s practicability has to be checked fairly. If the matter concerns potential investors, they are interested in:
- existed positive experience in business;
- market outlook of an enterprise;
- ownership and juridical form of business organization;
- management of stuff;
- organization of production, raw materials supplies;
- financing schedule;
- repayment schedule;
- commercial effectiveness of the project;
- possible risk;
- given guarantee.
Mentioned points are parts of a business plan. The parts may have different names, but each must contain exhaustive information about the project.
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