What is a Business Plan?
A business plan precisely defines your business, identifies your goals and serves as your firm's resume. It describes the products and services you will sell, the customers to whom you will sell them, the production, management, and marketing activities needed to produce your offerings, and the projected profit or loss that will result from your efforts.
Purpose of Business Plans
Developing and maintaining a successful business requires planning. A written business plan can be an invaluable tool that the entrepreneur can use to identify and exploit opportunities. It is also helpful in anticipating problems and developing strategies for avoiding or minimizing those problems.
Your business plan is a reflection of you and your ability to organize, to think, to manage and to communicate. In the eyes of a banker or venture capitalist - one who may invest his money in your new enterprise - it demonstrates on paper your potential ability to compete in a specific industry.
The form and content of a business plan will vary with each business and with the intended use. The main purpose of the business plan is not to impress outsiders, but to force the business owner to think through certain aspects of starting a business.
Basis for Financing
Your business plan will provide the basis for your finance proposal which is the document submitted to the financial community in order to get your finances to start or expand your business.
Good intentions are only a part of the formula; the rest is knowing:
What to plan
When to plan
How to plan
Your business plan, while important in obtaining financing, is also equally important in helping you align internal goals with market demand and turn your idea into a flourishing business.
Five Reasons to Create a Business Plan
Forces you to look at your business in its entirety
The plan becomes a tool to manage your business
Demonstrates to others your goals and objectives
Provides a basis for your financing proposal
Creates a yardstick by which you may measure and evaluate changes
Best Practices: Business Plans
Write the plan yourself – It may seem like hard work, but putting in the time and effort will pay off in the end.
Use the plan you have written – Don’t let it sit on a shelf and collect dust. Use it and update frequently as your ideas and business evolves.
FAQ - Business Plan
Check out the FAQ section on Business Plans.