Why write a business plan? A business plan is a way of putting our project down on paper: the future of our business, based on the resources we have today.
We need to define the business idea we want to pursue and, basically, why we think it will succeed. In our business plan we should set out:
- The budget we need
- Our objectives
- The strategy we’ll use to meet those objectives
Some entrepreneurs abandon their business idea while drawing up the plan, because seeing it written down on paper makes them realize that the idea isn’t viable.
What is a business plan for?
- Above all, a business plan helps us assess objectively whether our future business will be viable and profitable.
- As a planning and evaluation tool. In it we set our objectives and minimize risks.
- As a financing tool. A good business plan lets us show banks, financial institutions and lenders that our business idea is worth investing in and that we’ll have no trouble repaying our debt.
- For tracking objectives. Once the business is up and running, we can check whether the results match the plan we made at the start. If we’re falling short of those objectives, we can look for a solution right away.
There’s no set format or structure to follow when drawing up a business plan. Always put enthusiasm and objectivity into it, and present it to lenders with even more enthusiasm.
The structure of a business plan
Further reading
- How to finance my business
- How can I start a business with no money?
- The businesses of the future
- 10 tips for taking your business idea forward
Featured image: Nenad Stojković, CC BY 2.0, via Wikimedia Commons.
