Business Plan

Business plan is a document which reveals the financial details, marketing opportunities and strategy, management skills, and business abilities. 

The reasons why a business plan is necessary are as follows.

• It is a guide and roadmap to starting a business. 

• It is a tool that provides the necessary research and planning studies before establishing a business. 

• It is required to obtain support from a bank or other financial organization. 

• It helps understand your own business. 

• It is a good management and control tool. 



The content of a business plan consists of the following.

• The entrepreneur’s characteristics and goals. 

• The primary characteristics, legal structure, and partners of the business to be established. 

• The features of the target market. 

• Sales and marketing efforts to reach customers. 

• The necessary administrative processes and organization to run the business. 

• The estimated production and sales plans for the business. 

• The processes to be used to produce products or services. 

• The technical systems of the enterprise to be established. 

• The financial movements of the business. 

• The profitability of the business.

A business plan is a tool that can be used for the following three primary purposes: communication, planning, and management.

The benefits of a business plan include the following.

• In business plans, goals and objectives are expressed quantitatively, making it easier to compare actual results with forecasts. 

• The business plan measures the performance of the departments or managers of the business. 

• The business plan helps to reveal the skills and abilities of the entrepreneur. 

• It helps to combine the time and e ort required to ensure that the entrepreneur critically and impartially evaluates his business. 

• The business plan can improve the business’s performance by identifying its weaknesses and strengths, new or potential problem areas.
• The business plan coordinates the planning processes of the various departments or units of the business and ensures consistency.
• The analysis of the business plan’s economic, financial, and competitive structure helps the entrepreneur’s assumptions to be carefully reviewed.
• The business plan develops operational strategies and expected results for external evaluators.
• The business plan provides funders and investors with information on market potential and explains how to maintain market share.

Business plans are reports that cover all aspects of the business with elements such as marketing, production, management, and financing. A detailed business plan generally consists of the following eight sections: executive summary, company description, product or service, market, marketing plan, operations, organization and management, financial projections.

An executive summary is the most important part because it is a snapshot of the business plan. It should include the type of work to be done, financial needs, and some estimates. 
The key elements that should be included in the executive summary are the business concept, financial features, financial requirements, the current status of the business, and critical advances.

The company description section should include answers to the following questions:

• What type of business are you planning to start? 

• What are the goals of the business you intend to establish? 

• What products or services will you offer? 

• How is the industry structure for the goods and services to be produced? 

• What is the growth and profitability potential of your business? Why will your business be successful? 

• What are the differences that distinguish your business from others?  

• What are the factors that will make your business fail?  


The product or service section should include answers to the following questions:

• What is your product or service, and how does it work?
• How does it benefit customers?
• What makes this product or service unique?
• Is it in the idea stage, or do you have a prototype?
• How much will you charge for the products or services you are offering?
• How will you sell it?
• Will you manufacture products yourself or outsource production? 

The market section should include answers to the following questions:

• Who have you identified as your ideal client or customer? 

• How does it benefit customers? 

• Why will customers want to do business with you? 

• What factors influence the need for your product or service? 

• Did the need exist before, or are you trying to create it? 

• Have the number of people in your target market been increasing or decreasing over the last several years? 

• Who have you spoken to about the viability of your product? 


The marketing plan section should include answers to the following questions:

• What is the current size of the market?
• Who are your potential customers?
• What is the market share you expect initially?
• Who are your competitors?
• How will you increase or protect your sales?
• What will be the price of your products or services?
• Will your market share change if prices change?
• Do you have a competitive pricing policy?
• What will your advertising and promotion strategy be?

The operation section should include answers to the following questions:

• Where will your business be located? 

• What are the factors that a ect your choice of establishment location?
• Who will be your suppliers? 

• What are the transportation possibilities? 

• How will you run the business? 

• How will you keep track of inventory? 

• What are your estimated production costs? 


The organization and management section should include answers to the following questions:

• Who will run the business?
• What are the personal characteristics of the managers?
• What are the estimated wages to be paid to employees?
• How will the duties and responsibilities of each position be shared?
• How many employees do you need? What will their mission be?
• What kind of consultants or experts do you need?

The financial projections section should include answers to the following questions:

• What is the primary revenue source of the business?
• How long has the business been operating?
• What are the operating results and profitability?
• What are the predictions for the future?
• How much funding is the business seeking, and what will it use for?

Business plan establishes a reliable benchmark for measuring the entire enterprise’s performance or its units or managers. In addition, the business plan and its development process are tools to train and motivate its employees. It is also useful to provide information to external stakeholders and obtain funds from external sources. Therefore, evaluating the business plan is of great importance for both the business and external stakeholders.

Experts evaluating the business plan expect to see the following in the executive summary section.

• Purpose of preparing the business plan, 

• Adequate knowledge of the business idea, 

• Educational background and experience of the entrepreneur, 

• Information about the products or services to be offered, 

• Short, medium, and long term goals of the business, 

• the way the company will follow to achieve its goals, and 

• the vision and mission of the business. 


Experts evaluating the business plan expect to see the following in the company description section.

• The processes the business goes through from its establishment to its operation, 

• Personal characteristics and goals of the entrepreneur, 

• Future goals, 

• Place of establishment, partnership, and legal structure of the business, and 

• Required permits and licenses. 


Experts evaluating the business plan expect to see the following in the product or service section.

• Benefits for customers, 

• Unique product or service, 

• Idea stage or prototype, and 

• Outsourcing type. 


Experts evaluating the business plan expect to see the following in the market section.

• Information on the sector and sub-sector in which the enterprise will operate, 

• General characteristics of the sector in which the business will operate, its current situation, and expectations for the future, 

• The position of the sector in which the business will operate in the country’s economy and the size of the market in terms of sub-sectors, 

• The structure of competition in the sector, 

• Competitors and market shares in the industry, and 

• The size of the demand against the goods or services to be offered. 


Experts evaluating the business plan expect to see the following in the marketing plan section.

• Market size, market share, and size of the target customer group, 

• Distribution channels to be used to deliver goods or services to customers,

• The promotional ways (promotion, marketing, advertising, sales) chosen to reach the target customers and the patterns of their implementation,
• Sales forecasts in line with demand forecasts,
• Pricing policy, and
• Analysis of strengths and weaknesses and solutions for weaknesses.

Experts evaluating the business plan expect to see the following in the financial projections section.

• The funding requirement for the establishment phase of the business, 

• Loan repayment, 

• Balance sheets and income statements for the last three years for companies that are not newly established, 

• Compliance of cash flows with income and expenses, 

• Compliance of operating expenses with all activities included in the business plan, and 

• Return on investment, profitability ratio, net present value, and comparison with alternative investment instruments.