Why do I need a business plan?

Banks and other lenders often require a business plan before they will extend a loan.

Business plans are very useful even if you don’t need one to get financing.

The primary value of your business plan will be to create a written outline that evaluates all aspects of the economic viability of your business venture including a description and analysis of your business prospects. This can then be used to clearly and concisely explain to various stakeholders why they should be interested in your business.

Can I write my own business plan?

Of course. All you will need is clear writing skills, financial analysis skills, and the time to gather the necessary information. Many of our clients have the necessary skills but lack the time. Others have the time, but lack the necessary skills.

If you do write your own plan, have someone whose opinion you trust read the document. They should be able to fully understand your business solely from what they read in the plan. If they cannot explain it to someone else, there is a gap in your plan that should be addressed.

One thing to consider: If you have had writing a business plan on your to do list for more than a few months, you do not have the time or there is some other obstacle getting in your way. It is time to hire a professional.

What is a business plan?

In theory, it can be anything you want or need it to be. Some definitions found on the internet:

• A document that describes an organization's current status and plans for several years into the future.
• A comprehensive planning document which clearly describes the business developmental objective of an existing or proposed business applying for assistance or loans.
• An overview in words and numbers of the history of a business and its owners, the aims and objectives of a business, and proposals to achieve business goals.
• There are many types of business plans, including those used for the purpose of internal operations and raising capital. Business plans used for raising capital will provide a description of the company, business strategy and financial projections.

Making the plan work for you

You will need to determine what you need a business plan to do for you. If the plan is being prepared for a financial institution, they will have very clearly defined requirements of what it should include. Regardless of whether you are seeking financial backing, it is a good idea to have a business plan.

A business plan for an existing organization will base financial forecasts on past performance and will take into account the effects of the strategic plan, if there is one.