What Is Business Planning?

Contributor

By George N Root III
eHow Contributing Writer

Article Rating: (1 Ratings)

Business planning is the process of organizing and presenting the ideas associated with a new business venture. This can include the starting of a new business or the continued expansion of an existing business.

Significance

When a business plan is developed, it serves as the blueprint for advertising, budgeting, marketing, organizational structure and the goals of the organization. Within the business plan are the responsibilities of the management teams, and the projected growth of the company or division.

Types

A business is either categorized as a not-for-profit business or a for-profit business. Both of these types of businesses are required to submit a business plan for funding from an outside source, or for continued growth of the organization.

Considerations

According to the Small Business Administration, a business plan should be customized for a particular company. Even though there are standard parts to a good business plan such as finances and management structure, each business plan should be tailored to that company.

Function

A business looking to borrow from a lender will usually need to submit a business plan in order to be considered. Without a significant business plan, organizations such as the Small Business Administration won't consider a loan application.

Potential

According to the Small Business Administration, a well-written business plan can help a business owner focus more on its core business and avoid problems that can decrease potential profit.