A business plan is an operating tool that forces you to take an objective view of your business and provides the means to identify areas of strengths and weaknesses. It pinpoints needs you might otherwise overlook, spots problems before they arise, and points out what must be done to make a profit and increase your business. A business plan can help you avoid entering into a venture that may fail. If the plan shows the business to be marginal, the hours spent writing a plan will save you the high cost of a business failure. A business plan will help because it:
- Clearly states both the short- and long-range objectives of the business.
- Provides the direction or plan for achieving these objectives.
- Provides financial forecasts based on your estimates of the future and your business experience.
- Provides budget guidelines, including projected cash flow analysis and income statements.
- Gives a break-even analysis of your business.
- Helps determine the amount and kinds of financing best suited for your business.
- Gives banks, investors and suppliers useful information they need to make fast and accurate decisions about your business.
- Forces you to think through every aspect of your business and recognize opportunities for growth and profit.Provides financial information so that the past can be compared to the present and future.
Remember, a business plan is a dynamic tool. After it is prepared it must be used often. It is flexible and should be altered as conditions change. Most important is that the owner(s)/manager(s) prepare the report.
If you have trouble writing a business plan, contact our partner, the Small Business Development Center, at the Workforce Connection Business Services Center via email at firstname.lastname@example.org or by phone at (877) 954-4473. You may also learn more about business planning and other business functions under our Training and Tools sections