What is a Business Plan?

A Business Plan is a description of your business idea. It maps out your company’s future. It gives an idea of the goods or services you’ll be providing, how you plan on actually creating something that people will want to buy, the manufacturing or the creative process, how you will sell it, and how you plan on making money while doing all this. It describes your company, your strategy, your objectives and your abilities. It also looks at the market for the products you intend to sell, and the competition in the marketplace. And most importantly, it gives the numbers involved - how you’ve fared as a company in the past, and how you expect to fare once you put your ideas in place.

Why do you need a Business Plan?
In the first place, it’s a way of taking your thoughts and ideas and crystallizing them into a definite plan. If you haven’t already done it for your own benefit, you should. What seems like a good business idea at a cocktail party may end up being just that. An idea. When you actually sit down to see if there’s a business in it, you may find that there simply isn’t a large enough market for the product you want to sell. Or that you can’t do it cheaper or better than the competition. Or worse, that you can’t make any money doing it.

You’ll also need a Business Plan if you intend to approach other people for money. Bankers and fund managers that may give you a loan or equity capital will certainly want to see how well you’ve thought out your ideas. They’ll want to know how you plan on running your company over the next few years, and whether you’re capable of doing it well. And they’ll want to know if they’ll get their money back at some point in the future. Without a good Business Plan, your idea has little chance of getting funded.

What should be in a Business Plan?
Everything. Whether it’s a bricks and mortar or a web based business, you need to put down all the details. What it is, how it’s made, how it’s sold, how much people will pay, how much money you need to spend, and how much money you think you’ll make. Do your homework before you start looking for funding. A well-researched Business Plan without too many holes in it has a better chance of getting you money.

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