What is a business plan?
Simply put, a Business plan is a description of your future business. It documents what your business is, who is going to use it (eg who will buy your product) and how you are going to make this happen.
Why make a business plan?
It may seem like a big task - to document every detail of your business. You may feel you know everything in your head, and don’t feel the need to write down every aspect of your new business, especially if you are not seeking investment. The survey results below may convince you otherwise:
Two students from the University of Oregon, partnered with Palo Alto Software to ask people about their businesses, including questions about their goals, years in existence, business planning, finance etc. Almost 3,000 people responded.
This chart from Tim Berry's blog on business planning shows the results of their research. Those who finished their business plans were about twice as likely to successfully grow their business, get investment, or secure a loan than those who didn’t.
Not only will writing a business plan help you to achieve your long term goals but doing so will also help you:
- Develop a roadmap for your future business. It will make you think clearly about what you are going to do and when you are going to do it.
- Examine your target market and how to fit into it and above all stand out.
- Remain committed to financial expenses and long term goals.
- Discover whether your business is financially practical and what the return on investment will be.
- Reveal any gaps you may not have thought about.
So now that you are convinced that writing a business plan is the best thing you can do for your new business, read our guides to find out about the different sections in a business plan and how to write them: