A business plan is a fundamental document for businesses. This applies to both new and existing businesses. It is typical for many people to think of business plans as significant or applicable to newly created start-up businesses; the truth is, a quality and comprehensive business plan will also be very important when it comes to obtaining equity or liability finance in order to facilitate the expansion, diversification and growth phase of existing businesses. Generally, a start-up business plan will be useful for a new business in terms of looking ahead and preparing for success. It essentially helps in terms of developing a strategy for your business. Furthermore, with existing businesses, it will help assess the past and strategically plan the future of the business. In essence, drawing up a business plan for an existing business can help all concerned parties see where they have come from and plan where they want to go.
A winning or effectively prepared startup business plan can help the owners, managers and other interested business stakeholders properly allocate precious resources, focus on the key issues facing the business entity, and properly prepare for future challenges and opportunities.
It is vital for a start-up company to have a quality and wining business plan in order to attract lenders, grant providers, business support groups, investors and potential business partners. There is a very high probability that no investor or potential finance provider will agree to invest in the business without having to first review and verify the information contained in the startup business plan or business plan for an existing business entity.
All business plans, both for startup businesses and those for existing entities, will need to include such components as a description of the company and what it does, the products it manufactures or the services it provides, the outlook for the market, company forecasts, a detailed financial analysis of the company, and resumes of its key personnel. These are discussed in detail in other sections of this website.
While the actual format used for a business plan will vary quite a bit, in practical, all good business plans will contain at least this basic information. There is no precise right or wrong way to do a business plan. What is important is to include all the important information that is required. Some business support agencies provide templates to be used for all business plan submissions. It is important to find out if these are provided by the agency or person you are submitting your business plan to.
In summary, a business plan serves the following purposes
- It is road map for your business
- It helps with the proper allocation of resources
- It helps address future challenges and opportunities
- It forms part of a key component for raising funds
- The business plan articulates specific goals and objectives
- It identifies opportunities that can be capitalised
- It guides the implementation of capacity building strategies
- It establishes performance guidelines and promotes efficiency