A business plan is a written description of your business’s future, a document that tells what you plan to do and how you plan to do it.

Business plans are inherently strategic. You start here, today, with certain resources and abilities. You want to get to a there, a point in the future (usually three to five years out) at which time your business will have a different set of resources and abilities as well as greater profitability and increased assets. Your plan shows how you will get from here to there.

Here are step-by-step guides to writing a good business plan. But first, let’s look at the purpose of business plan.

See Also: Mistakes to Avoid When Creating a Business Plan

Importance of  business plan

A good business plan serves at least four useful purposes:

  • It helps you focus your ideas.
  • It creates a track for you to follow in the early stages of business growth.
  • It creates benchmarks against which you can measure progress.
  • It provides a document for attracting equity or debt financing.
    The business plan brings together the goals, plans, strategies, and resources of a business.

By developing a comprehensive plan prior to commencement of operations, it can minimize risk and may save you from significant financial and professional losses resulting from an unprofitable business.

Read: 3 Golden Steps to Building a Good Investment Plan

There are many different suggestions for organizing and presenting a good business plan. Organize and prepare your plan so that it meets your style and needs as well as the needs of those who will read it.

• Keep it simple and focused

• Make it easy to read

• Use understandable language, a layout that is pleasing to the eye, and charts or graphs to explain difficult concepts

• Be objective

• Review the plan with the critical eye of an outsider who doesn’t know your business and isn’t committed to the business

• Be honest

• Acknowledge your weaknesses as well as your strengths

• Review and revise the document regularly

• Consider your business plan a “living” document

• Schedule periodic revisions to keep it current

• Get your staff to participate in the development of the plan

• Not only will they have good ideas for improving it, they will work harder to support something that they helped to develop.

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