The importance of a business plan
If you think you can start a business without creating some kind of business plan then you are probably going to fail. This is because every day of running an business is going to involve some kind of project management, and having a roadmap make things much easier along the way.
Your business plan basically serves two purposes:
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It is an explanatory document that is used to interest others in financing or partnering in your business.
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It provides an outline of how and when you will achieve your ambitions.
A business plan defines your business, identifies your goals, and serves as your firm’s resume. The basic three basic financial components of a well-structured business plan are:
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A balance sheet that describes both current and projected profits
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An income statement
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A cash flow analysis
A well thought out business plan can be your friend in the future, assisting you with making good business decisions, especially when it comes to allocating your resources.
Remember that others will be reading your business plan so it should provides specific and organized information about your company and how you will repay borrowed money. It is a crucial part of any loan application. Additionally, you can present it to potential investors, partners and suppliers to inform them about your operations and goals and to obtain credit from suppliers
Despite the critical importance of a business plan, many entrepreneurs procrastinate writing one. You need to make the time - it is a huge mistake to think that you can build the foundations of your business with out a blueprint. This article about business plans and board meetings offers an insider’s perspective on business plan writing.
The Small Business Administration also has great examples and templates you can follow if you don’t know where to start.
Tags: business plan, Small Business Administration, Start-up