Business plan
What is it?
Each entrepreneur has it own mini-plan of actions, deeds and tasks "in his head": we all have agendas, "wish-lists", daily schedules, client contact plans, payment plans or vacation agendas, plans of workers in shifts and so on. However, the entrepreneurs (especially the small ones) quite rarely gather all the individual series of mini-actions and plans in order to establish a systematized and all-inclusive business plan. Each company aims at profitability for their owners, but by obtaining long-term stability, continuity and sustainability of business. Business plan is a systematic overview of all operating elements with budgetary planning of income and expenses - be it in times of ordinary operating, or in times of certain investment activities, changes in equipment, entering new markets, new employment and other changes.
Business plan and investment study are two different documents. We will compile the investment study in case of investing into some material or technological background of our business (assets), as well as when investing in working capital, education of labour or in any other investment related with our respective business. Therefore, the investment study analysis will, in fact, show certain part of the business plan of a company: the one which is concentrated on the effects of the investment cycle in scope. However, the business plan refers to all individual investment cycles and provide some more comprehensive outlook to overall business.
Why compile it?
Generally speaking, the entrepreneurs write down their plans quite rarely. And those few that do it, they do not plan to write down their plans in a form that provides an easy follow-up (updating), although daily operating surely imposes diverse changes to their businesses - in forms of new products, new clients, changes in suppliers, oppening new bank accounts, hiring (or firing) workers etc. Each and every change in the above operating factors may reflect to the overall business in both supporting and destabilizing manner, in case the thorough planning ignored. The business plan is used for planning and control, it is a specific "mind map" to our business. Therefore it should be a standard tool for management and control over a company. Because "if we wish to achieve something, we have to do it in four steps: plan by goals, prepare in detail, think positive and perform relentlessly." (S. Butler)
When do we compile it?
The most common opinion is that one should compile a business plan for his/her business only upon a request from the business bank or state institutions (at the entrepreneur's start-up). And once the entrepreneurs are "pushed" into business planning process, even though they engage some experts' assistance in compiling their business plans - again only a few will make some follow-up on the document and check how their business is developing and whether their plan was good at its roots. The "start-up" entrepreneurs sometimes ask for some help from the business-supporting infrastructure (entrepreneurship centres or some other experts) in compiling their business plans, but again and in most cases because they believe that "sooner or later somebody will request to check out on their respective business plan".
How to plan the plan?
When you plan to make the business plan - firstly consider the possibility that it will be read by "somebody else", who might be extremely important for you. Banks, financial instutitions and our "owners" (partners) are commonly very important to entrepreneurs. If you are compiling a business plan as a supporting document for bank loan, you should be aware of the fact that banks require the plan of a certain structure of contents. However, the goal of the business plan taken to the bank is to picture the overall "personal identity card" of a company (or entrepreneur), his operational capacities, technologies, markets and market potentials, suppliers, and the planned investments with its effects to the further operating of the company. Such business plan puts an accent on financial information and forecasts. Also, when compiled for the bank - it usually is concentrated to one investment cycle, and excludes any possible further investment cycles (which would be shown in the overall business plan of a company).
The financial projections of the business plan should describe the conditions under which the plan was forecasted. Bookkeepers should be more than efficient in drafting business plans, especially if they follow-up on the company's operating on a regular basis. However, the company books do not oftenly show each and every aspect of business which is run by the operational managers. There are many business advisors and SME consultants offering some assitance in business planning. You can also contact the VG Poduzetnički centar: until the end of 2008, we have compiled over 130 business plans and investment projects with the overall investment value around EUR 75 million.