A business plan involves a process in which an entity puts together a given set of resources (people, capital, materials) to achieve defined goals and objectives over a specific period of time. In addition to providing the direction necessary for success, a sound business plan should be flexible to take advantage of new opportunities or to allow adjustments when certain assumptions or conditions change. This plan should be reviewed and progress assessed (perhaps once every three or four months) to ensure that implementation is consistent with overall goals and objectives laid out in the business plan.
Developing a business plan is an important factor for success regardless of the size, type, or time of establishment of the business. Even though some export-import companies start a business plan after they have reached a certain stage, planning is needed at all stages of business development from inception to maturity (Hisrich, Peters, and Shepherd, 2009; Williams and Manzo, 1983). It is a roadmap to one’s targeted destination. By allowing for critical evaluation of different alternatives, a business plan forces entrepreneurs to set realistic goals, predict resource allocation, and project future earnings. Such a practice assists in avoiding costly mistakes and enhances the decision-making abilities of businesses (Hisrich et al., 2009; Silvester, 1995). A written business plan is the basis upon which other parties (e.g., bankers, potential partners) assess the overall business concern. It is used for obtaining bank financing, seeking investment funds, obtaining large contracts to supply governments or companies, or arranging strategic alliances to conduct joint marketing and other activities.
The structure of a typical business plan includes the following components (see Figure 4.1): executive summary, description of the industry and company, target market, present and future competition, marketing plan and sales strategy, management and organization, longterm development and exit plan, and the financial plan (Cohen, 1995; Hisrich et al., 2009). Some plans also include critical risks/problems and community benefits.
Source: Seyoum Belay (2014), Export-import theory, practices, and procedures, Routledge; 3rd edition.
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