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Unit 7: Building the Business Plan

documents; rather, they embody a set of management decisions about necessary steps for the Notes
business to reach its objectives and perform in accordance with its capabilities.
“By its very definition, a business plan is a plan for the business, clarifying why it exists, who it
exists for, what products and services it provides these client groups, how it intends to develop
and deliver these products and services, and where it is headed,” Rebecca Jones wrote in
Information Outlook. “A business plan is a roadmap for the organization, showing the destination
it seeks, the path it will follow to get there, and the supplies and wherewithal required to
complete the journey.”

7.1 Concept and Scope of Business Plan

Planning is the first and the most crucial step for starting a business. A carefully charted and
meticulously designed business plan can convert a simple idea/innovation into a successful
business venture.
A business plan is a road map for starting and running a business. A well-crafted business plan
identifies opportunities, scans the external and internal environment to assess the feasibility of
business and allocates resources in the best possible way, which finally leads to the success of the
plan. It provides information to all concerned people like the venture capitalist and other
financial institutions, the investors, the employees. It provides information about the various
functional requirements (marketing, finance, operations and human resources) for running a
business.
A business plan is the blueprint of the step-by-step procedure that would be followed to convert
a business idea into a successful business venture. A business plan first of all identifies an
innovative idea, researches the external environment to list the opportunities and threats,
identifies internal strengths and weakness, assesses the feasibility of the idea and then allocates
resources (production/operation, finance, human resources) in the best possible manner to
make the plan successful.

The objectives of a business plan are to:
1. Give directions to the vision formulated by entrepreneur.
2. Objectively evaluate the prospects of business.
3. Monitor the progress after implementing the plan.
4. Persuade others to join the business.

5. Seek loans from financial institutions.
6. Visualize the concept in terms of market availability, organizational, operational and
financial feasibility.

7. Guide the entrepreneur in the actual implementation of the plan.
8. Identify the strengths and weakness of the plan.
9. Identify challenges in terms of opportunities and threats from the external markets.

10. Clarify ideas and identify gaps in management information about their business,
competitors and the market.
11. Identify the resources that would be required to implement the plan.

12. Document ownership arrangements, future prospects and projected growths of the business
venture.

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