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A business plan is a formal statement of business goals and the plan for meeting those goals. It includes:
1. The purpose and need for the business and its place in the market,
2. The corporate structure;
3. Tools required for the company to succeed.
4. Financial basis to start the company and keep it running.
5. Future goals.
The business plan is an essential cornerstone for every business; no matter how small for several reasons. The development of the business plan forces the prospective business owner to take a close look at the market and will show them if their business is needed and whether is stands a chance of succeeding before they even start. it is a reality check. It flushes out problems that might not be initially anticipated. It is a tool to communicate to investors what they are investing in, risk factors and the chances of return on their investment. It also shows them you know what you are doing and take the use of their money seriously making them more likely to invest. Perhaps most important of all it keeps the business focused on its purpose. Too many times businesses grow into unrelated areas or too fast or become too broad which weakens their base and can result in failure. The business plan can be used as a tool to keep them on track. It is a working document that keeps a business grounded. Any shift in focus should happen on the business plan level first so that changes are well researched and risks anticipated before they are made within the company. The business plan is the cornerstone, common sense, voice of reason for all businesses and its importance should not be dismissed.
