Business Plan: Definition, Components, and Benefits


Business plans are usually made to start or plan a business or venture. Then what is included in the business plan?

To start a business or business requires careful planning and preparation. Without planning, the business or business that you start up will lose direction because you run it without clear goals.

Definition of Business Plan

A business plan or business plan is a document detailing business details that an entrepreneur prepares before opening a new business. Business planning contains any applicable plans for future business orientation, allocating resources, and predicting opportunities, as quoted from the book Tourism Business Planning by Aniesa Samira Bafadal.

The following are the main components contained in a business plan document, as quoted in the book Making a Business Plan with Word 2007 by Jubilee Enterprise, namely:

1. Executive Summary (Company Summary)

This component aims to briefly present information about the company, starting from the target market, products, financial projections, and problems solved.

2. Company Description

This component aims to describe the company’s identity, vision and mission, and a brief history of the company that reflects the development of the business from its founding to the present.

3. Business Concept and Opportunity

This component describes the description of the product or service offered, the advantages of the product or service compared to other products or services that are already on the market, as well as existing business opportunities that are your reasons for producing or developing these products or services.

4. Analysis of Market Aspects

In this component, you must explain market conditions related to the level of supply and demand for goods or services, determine the target market, analyze competitors and competitive conditions.

5. Marketing Plan and Strategy

This one component explains what strategies will be carried out to reach customers and methods for promoting the products or services offered.

6. Organization and Management

This component describes in detail the organizational or management structure of the company starting from the founder, the board of directors, and the number of employees in the company.

7. Financial

In this component, entrepreneurs must present projections of the company’s financial statements, including income statements, cash flow, and balance sheets for the next few years with logical assumptions as a basis.

8. Operation and production

In this component, you are able to explain the facilities that support the product or service being offered.

Business Plan Benefits

A business plan is a document that has multiple benefits (dual function), namely benefits inside and outside the company. The following is the explanation, as quoted in the Technopreneurship book by Imam Tahyudin, including:

1. Outside the Company

a. Investors

A business plan is useful for determining whether a business is worth investing in or not

b. Stakeholders

Outside stakeholders are individuals or organizations from outside who are affected by the business. For example, local government, village heads, etc. In addition, a business plan is useful for determining whether a business is feasible or not.

2. Within the Company

a. Entrepreneur / Entrepreneur (Entrepreneur)

A business plan can help an entrepreneur to:

  • With a business plan, an entrepreneur has already visualized his business plan. Thus, it will be easy for an entrepreneur to decide whether his business plan is worth starting or not.
  • Manage business ideas so that you can start executing an idea in the right way
  • Explaining business ideas to financial institutions, such as banks in order to obtain loans for the business being run. This is very necessary if the business being run requires large capital.

The benefits of a business plan include:

1. Guiding the course of business activities

2. Securing business continuity

3. Develop managerial skills in the field of business

4. As a guideline for company leaders in running it

5. Knowing what will happen in the business

6. As a tool to communicate in business

7. Enlarge opportunities to achieve profits

8. As a guide in supervision

So hopefully it helps detikers make business plan for those who want to start a business…

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