Global Decision Making: Components of a Business Plan
Every business needs a blue print that will articulate the route it intends to take to achieve its goals. A good example of this is a business plan, which is a document that shows the practicability of various business objectives and it is also used by potential clients and investors to determine how capable the business is to meet their needs (Pride, Hughes and Kapoor, 2008). For a business to interpret its vision to outsiders, it needs to demonstrate how applicable the business concepts are for success and profitability, which poses a great concern for majority of businesses in this era of globalization. However, one way to guarantee this is to use well-designed components that can be used both locally and internationally. This text looks at the most useful components of a business plan and recommends changes that should be made if it is used in a foreign country.
Applicable components of a business plan
There are 12 important components that should be included in a business plan. These are: (Pride, Hughes and Kapoor, 2008)
An introduction- This states the name and contact details of the business, the background of the company and informs the reader of what the business plans to accomplish.
An executive summary- This gives readers an overview of the entire business plan.
The benefits to the community- This section highlights how the community will benefit from the business. It explains jobs that will be created, how products or services will meet community goals and specifies how the business contributes to community development
The company and industry- This analyses the business industry as a whole and gives information about the business' performance, compared to the competition.
The management team- This section outlines the management of the business, their qualifications, and their level of experience.
Product life cycles, equipment and operation procedures are explained here.
The Labor force- This section lists the people who work at the company or business
The marketing plan- This gives the marketing and sales strategies that will ensure the business reaches its target market and establishes its market share by managing competition.
The Financial plan- It is important to explain the various modes of financing that are used by the business. This segment of a business plan outlines the sources of finance, the collaterals that may have been used, the credit history, and the ability of the business to meet the financial goals of investors
Exit strategies- This section enables entrepreneurs to look into the future of their businesses and develop strategies to meet unexpected events such as retirement, disasters or continuous losses.
Critical risks and assumptions- The business plan contains projections of sales and financial statements that enable investors to determine the business' financial position. Assumption are needed to explain the rationale on which the numbers are based and critical risks are also explained so that investors are fully aware of th risks involved in investing.
Appendix- All the documents and attachments that are used in the plan are organized in the appendix segment, which assures readers that the business plan is thorough and, hence, reliable.
Changes that would be required if the plan were to be used in a foreign country
If the business expands internationally, the business plan should enable management to evaluate their businesses in the foreign marketplaces. First, as opposed to a local business plan, the introduction and executive summary should target international investors and explain how…
