Understanding the Term Business Plan
The word business usually refers to an entity or organization engaged in business, commercial, or organizational activities for profit. Businesses may be either for-profit or non-for-profit entities. Generally, larger businesses are driven by profit whereas small enterprises are normally driven by passion or social conscience. Business categories range from single proprietor, multi-national, and local entities to privately owned cooperatives. All business entities share a common aim of achieving profitability through efficient operation, balanced financial management, and minimal over-stocking.
To become a business owner, there are certain basic requisites that one should fulfill. The first is to have clear goals and the subsequent is to choose the appropriate business model or procedure to achieve those goals. A clear goal should be defined by a person, group, or institution so that everyone involved in the venture can agree on the overall direction. Next is to conduct market research to evaluate potential customers or clients. By the way, conducting market research will help avoid costly mistakes. Lastly, decide whether to hire a company to do most of the tasks or one person to perform them.
One must set realistic economic objectives to achieve in order to succeed in business activities. Some of the common ones are increasing profits, reducing costs, maximizing assets, expansion of market, and diversification of products. Setting realistic objectives will make it easier to achieve them given the current condition of the economy.
Merchandising businesses engage in the production, distribution, marketing, and selling of goods to consumers. Common goods that are distributed by merchandising businesses include branded and non-branded clothes, shoes, handbags, accessories, furniture, and electronic and electrical items. Merchandising businesses also specialize in the production of food products such as processed and prepared foods, bakery products, confectionery, snacks, and other beverages. Many merchandising businesses also engage in manufacturing. A typical manufacturers’ shop contains sewing machines, cutting machines, printers, and other related industrial equipment used in production process.
Sole proprietor means to operate only for the benefit of the owner. It is quite different from the partnership in which only the partnership owner benefits. A sole proprietorship usually has no employees or workers and operates solely through the owner. Examples of sole proprietor businesses are hotels, restaurants, shops, franchises, and stores.
In closing, it is important to note that business refers not only to those activities engaged in by humans alone but also to those activities performed by nature. Nature gives example of cooperative activities among living things. Business refers to those actions which produce profit or satisfaction of our needs. Therefore, business plans are necessary even if one does not intend to do business with anyone or owns no property. In any event, business plans contribute significantly toward the success or failure of a venture.