What is meant by Business Plan

 What is meant by Business Plan

 A particular formulation of the multi-year plan is the Business Plan. This document describes the business idea, examines its success factors in the long run period and allows you to evaluate it.

 It basically fulfills two types of functions. The first is that the Business Plan is a tool that allows the company to rationalize and clarify the business idea. Its drafting requires, in fact, the identification of the factors of success and shortcomings of the project allowing to focus the business idea in its details. Often this leads to adjustments of the original idea due the identification of more or less serious impediments; if the Business Plan highlighted the lack of conditions, internal and external to the company, for success of the project, it is abandoned, thus avoiding serious future losses. Instead, when the Business Plan highlights the feasibility of the business idea, the elements in it contents define the strategy to be followed in the next phase of implementation of the project.

 Secondly this document allows for third party evaluation the economic initiative, its potential, the risks associated with it. In practice, the Business Plan aims to involve others in the realization of the business idea. It is therefore useful as an information support in the context of mergers and acquisitions, in tenders and, above all, how documentation to be attached to funding applications. Banks and other institutions financial, before granting a credit line to obtain any loan, require the entrepreneur to submit documents such as the balance sheet of the latter financial year, open debt positions towards other third-party lenders to the company and any guarantees. However, the bank can rely on these documents but that they have a serious flaw: that of describing the past and not the future. The financial statements, as we know, are a document that is drawn up at the end of a given year, or after that the management facts have already been completed. From it the debt positions towards other lenders and from it it is possible to know if in the in the past years, the company has been able to return them within the terms prescribed by the contracts previously stipulated.

 From this information, however, the financial institution is unable to know whether actually the company that submitted the loan application will be in the conditions in near future to repay the financing. Instead, the analysis of a Business Plan, one once the feasibility of the business idea has been verified, it allows the bank to understand if the company will actually be able to respect the commitments made. The bank will then focus on analyzing the financial needs to see

 if the company actually needs financing and to what extent, then it will go to

 evaluate the cash flows produced to see if they are positive and sufficient to cover

 financial expenses due to the repayment of the loan.

 Consequently, the Business Plan must be drawn up clearly and must

 fully describe the business idea. For this reason the part

 introductory related to the plan description must be comprehensive and also be

 convincing, in order to involve the subject who will have to make his own

 investment1

 or financing. It must therefore be drawn up taking into account

 considering the fundamental economic, financial and financial aspect but also

 the descriptive one, which better allows readers to analyze the initiative

 entrepreneurial and then evaluate the actual possibility of realization.

 Generally the Business Plan consists of three parts. The first is aimed, in the case of new activities, at the description of the idea

 entrepreneurial or that of the advantages obtainable from the realization of a given

 project in the event that, on the other hand, the business activity already exists. In this part yes

 they analyze the characteristics of the products and services and their ability to be able

 satisfy the dreams of the market and therefore how the company will be able to obtain

 competitive advantages over other companies, the technologies used and the strengths

 and weakness of the company.

 In the second part, however, the feasibility study of the idea is carried out

 entrepreneurial in relation to the external environment, generally understood as a market,

 suppliers, customers, competitors, and internal, i.e. with reference to the company's resources

 (financial, technological and know-how) and its organization.

 Finally, the third part concerns the economic, financial and evaluation

 assets of the initiative. It is at this stage that the business plan comes into play,

 articulated in the parts that we have dealt with in the following chapter, namely the plan of

 business, investment, economic, financial flows, financing e

 patrimonial. It is therefore a question of exposing the business idea previously described

 in numbers.

 Upstream of any organization, be it for profit or not, there must be a

 strategic document able to act as a guide to follow the path it will lead

 the activity to achieve the goals it had set. This document is the

 Business Plan, which becomes in a broader sense not just a tool for

 calculate the economic feasibility of an "idea through forecasts

 entrepreneurial ", but the compass that points the way to success not only

 to the entrepreneur but to the entire company structure. any business be it small or

 large size needs a Business Plan that represents the output of a

 planning process that, starting from vision and mission, defines and plans

 objectives to be achieved, how to achieve them and with what means, thus bringing out the

 competitive advantage that differentiates it from competitors. starting from this concept

 initial, in this work, I will go beyond the numerical analysis of the multi-year plan as a document created for the sole purpose of collecting funding sources and controlling cash-

 forecast flows but I will deal with the Business Plan in its broadest sense that

 wants to consider the Business Plan as a document containing words, numbers,

 tables and graphics conceived and defined by management with the help of all areas

 company that analyzes the internal and external context of the company, defines the objectives,

 dictates the guidelines to be followed and the economic and financial trend is also forecast

 which should be verified by implementing the plan.

 The Business Plan is a modern dynamics simulation tool

 company, projected in the medium-long term, consisting of a series of documents in the

 which is represented, in qualitative and quantitative terms, the business idea (or,

 however, the basic idea of ​​any economic initiative).

 The Business Plan is usually conceived as the tool to be used for

 decisions about starting a new business. However, limit its function to this

 objective, which is also of great importance and of great interest, is extremely

 reductive. In fact, the Business Plan represents a support both in the "extraordinary phases"

 of the life of the company (birth, growth, aggregation) both in the "ordinary phase"

 of current management.

 The Business Plan represents the cornerstone of management accounting

 (management accounting), understood as a set of principles, techniques and tools

 employed by business organizations for:

  Understand the environment surrounding the company2

  Define vision and mission

  Quantification of objectives and analysis of deviations such as

 control procedure  Analyze the economic and financial feasibility of an investment, both

 whether it is an investment to expand a business or to set up one

 new

  Plan strategies and determine the operational plan

  Define an efficient, clear and coherent corporate organizational structure

 with goals.

 The economic crisis that is characterizing this period, the development of

 technologies and innovation of the means of communication and interaction between individuals

 operator and market and between different operators require planning the dynamics

 not only in the short term, but also in the medium-long term and with a degree

 greater flexibility and adaptability over time. the underlying goal is to

 rationalize and plan business choices and summarize them in a document

 complete, representative and effective reading. recipients of the Business Plan

 they are many, even if they can be summarized in the following macros

 categories:

  the entrepreneur, understood both as a single natural person and as

 team of shareholders;

  the management, ie the entrepreneur´s collaborators with responsibility

 management;

  potential future shareholders: the original shareholder structure could vary. THE

 subjects called to subscribe a share or an increase in the share capital or a

 confirm their intention to support corporate development, they want

 know the profitability estimates and the underlying risk of the invested capital;

  private lenders, such as banks, credit institutions,

 private equity and venture capital finance companies;

  public institutions for the disbursement of non-repayable grants or a

 subsidized rate.

 As already mentioned, considering the Business Plan in its broadest conception, that is

 the one that does not identify it as the plan created by a company in the start-up phase to demonstrate the economic feasibility of the business idea but as a plan

 composed of several documents integrated with each other which, depending on the purpose for which it is

 drawn up, they take on forms with different contents. in this extended Business Plan perspective, the

 plan has different purposes and there are different levels of business planning in which it goes to

 fit in; so if it initially serves only to evaluate the economic soundness of the idea

 entrepreneurial, subsequently it extends to the more complete evaluation of the project,

 including also the financial feasibility and finally the definition of the operational plan

 which guides the entrepreneur's current decisions