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CHAPTER 8: BUSINESS PLAN

WHAT IS THE BUSINESS PLAN?

The business plan is a written document prepared by the entrepreneur that describes all the relevant external and internal elements involved in starting a new venture. It is often an integration of functional plans such as marketing, finance, manufacturing, and human resources. It also addresses both short-term and long-term decision making for the first 3 years of operation. Thus, the business plan – or as it is sometimes referred to, the game plan or road map – answers the following questions:

* Where am I now? * Where am I going? * How will I get there?

Potential investors, suppliers, and even customers will request or require a business plan.

If we think of the business plan as a road map, we might better understand its significance. Let’s suppose you were trying to decide whether to drive from Kumasi in Ghana to Tripoli in Libya (mission or goal) in a car. There are a number of possible routes, each requiring different time frames and costs. Like the entrepreneur, the traveller must make some important decisions and gather information before preparing the plan.

The travel plan would consider external factors such as emergency car repair, weather conditions, road conditions, sights to see, available campgrounds, and so on. These factors are basically uncontrollable by the traveller but must be considered in the plan, just as the entrepreneur would consider external factors such as new regulations, competition, social changes, changes in consumer needs, or new technology.

On the other hand, the traveller does have some idea of how much money is available, how much time he or she has, and the choices of highways, roads, campgrounds, sights, and so forth. Similarly, the entrepreneur has some control over manufacturing, marketing, and