What is a business plan?
A business plan is a written document that describes in detail how a business, usually a new one, is going to achieve its goals (a roadmap for your business).
The business plan does not have to be very long. While every business has huge benefits to gain from going through the business planning process, only a small subset needs the formal business plan document required for seeking investors or supporting a commercial loan.
Most need just a Lean Business Plan, for internal use, with just bullet point lists and important projections.
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These days, business plans are simpler, shorter, and easier to produce than ever before. A business plan is just a plan to figure out how your business is going to work, and how you’re going to make it succeed.
It is a very important strategic tool for entrepreneurs. A good business plan not only helps entrepreneurs to focus on the specific steps necessary for them to make business ideas succeed, but it also helps them to achieve both their short-term and long-term objectives.
What does a formal plan include?
While plans vary as much as businesses do…
- An executive summary.
- Company Description.
- Some information about your products and/or services.
- Your marketing plan.
- Strategy and Implementation.
- Organization and Management Team.
- Details of your company’s financial plan.
These are often called the “sections” or “chapters” of the business plan.
Who needs a business plan?
If you’re just planning on picking up some freelance work to supplement your income, you can skip the business plan.
If you’re serious about business, taking planning seriously is critical to your success.
A business plan is not only for starting a new business or applying for business loans. A business plan is also vital for running a business, strategic planning, whether or not it needs new loans or new investments. Even existing businesses should have business plans that they maintain and update as market conditions change and as new opportunities arise.
Every business has long-term and short-term goals, sales targets, and expense budgets…
It is as useful to a startup trying to raise funds as it is to a 10-year-old business that’s looking to grow.
The businesses that write business plans grow 30 percent faster than businesses that don’t plan. Taking the simple step forward to do any planning at all will certainly put your business at a significant advantage over businesses that just drive forward with no specific plans.