Importance of a Business Plan
A business plan is a document containing specific information about your company, your industry, and the future of both. Writing a business plan is time-consuming, but is vastly important, because one greatly increases your probability of success.
Business plans serve three purposes. The first is communication. If you wish to attract investors or secure a loan, your business plan will communicate to potential investors where you are going and how you plan to get there. In fact, it is quite difficult to obtain financing for your company without a business plan. A second function of a business plan is tracking, monitoring, and evaluating your progress over the short and long term. In fact, the business plan is a great tool with which to chart and gauge your growth. Keep in mind that your plan is not set in stone and will continually change and evolve over time. Finally, a business plan assists you in planning for the future. With proper research, you will be able to use your plan to project and avoid any pitfalls or obstacles that may arise.
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If you are opening or starting your own business, a business plan is a must. Financial institutions and private investors will not even consider funding your project without seeing a concrete plan. Banks will take some risk, but they need to see financial projections, and want to know that you are adequately prepared for the endeavor.
What to Include in Your Business Plan
While there is not one right way to create a business plan, most contain similar types of information. Start with a cover page and table of contents so the information inside is easier to locate. Next, you should include an executive summary. The executive summary is a one-to-two-page document that summarizes the business plan. It is included so people do not need to read the entire document if they so choose. While the executive summary is placed in the front of your plan, it is easier to write once you have completed all of the other sections. The other information generally included in a business plan includes a description of your business and the services you will provide, market analysis, information on owners and personnel, competition, financial information, and a marketing plan. The appendix should include tax returns from the past three years, a copy of the lease agreement, your resume, and any other legal documents. The most important factor for a successful business plan is that the information is clear, thorough, and accurate.
Helpful Resources for Creating Your Business Plan
Many books, articles, software, and Web sites have been devoted to the topic of creating a business plan. A simple Google search for “writing a business plan” will provide you with dozens of helpful resources, as will a search on Amazon.com. For free advice, try
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Where can I get help writing my plan in person?
If you need personal assistance, visit your local Small Business Association (SBA) or Chamber of Commerce. The SBA is usually staffed by retired executives and business owners who have many years of knowledge and experience to share. They offer free advice on developing and writing your business plan, as well as a great deal of other valuable information.
If you feel you need more help with your plan, you can log on to bplans.com. There you can find free advice or purchase software called Business Plan Pro from Palo Alto Software. The software will walk you through writing a business plan step by step. It checks your financial information for accuracy and your overall data for comprehensiveness. It also allows you to export the data to programs such as Microsoft Word, Excel, and PowerPoint. In addition, you'll receive free technical support.
