Preparation of a well thought out business plan should be one of the primary goals of any and every business, existing or start-up. The formal business plan process sometimes seems intimidating, but is actually quite straightforward. A formal business plan serves four critical functions:
Helps management or an entrepreneur to clarify, focus, and research business or project development needs.
Provides a considered and logical framework within which a business can develop and pursue business strategies over time.
Serves as a basis for discussion with third parties such as shareholders, banks, investors, and other interested parties.
Offers a benchmark against which actual performance can be measured and reviewed.
Just as no two businesses are alike, so it is with business plans. A business plan is not homework assigned by a lender or a potential investor. There are no software programs or magic templates that will swiftly and effortlessly produce a strong, complete business plan. It is important to tailor a plan's contents to suit the particular company’s circumstances, needs, goals, and direction. Nonetheless, most plans follow a well tried and tested structure on preparing a plan that is universally applicable. A business plan should tell the following story:
Business history, or origin of a new business’s idea
Overview of what the business does, with a focus on how revenues are earned
How the business is managed, structured, how records are kept, etc.
Description of the market, how the product/service is marketed, and to whom
If financing is required, how much, why, and how will it be repaid…
