The Purpose Of A Business Plan
Business plans usually look forward in time for a period of one to three years to a "planning horizon," which moves forward periodically with reviews and updates.Business plans for different organizations will differ somewhat in content and structure, but most are designed to address two fundamental kinds of questions: Founders and owners typically develop an initial business plan before startup.For companies in private industry, the heart of the business plan is a business model and business strategywhich describe how and where the company expects to make and spend money.All other parts of the business plan stem from the model.Don't the other people in your business life need to know what's supposed to be happening? Help buyers understand what you have, what it's worth and why they want it.5.Valuation of the business for formal transactions related to divorce, inheritance, estate planning and tax issues.The plan tells the valuation expert what your business is doing, when, why and how much that will cost and how much it will produce.4. Use a plan to establish the right steps to starting a new business, including what you need to do, what resources will be required, and what you expect to happen.3.
Amidst that rush, the idea of writing a business plan—much less following a business plan template—often feels time-consuming and intimidating. It’s more than the old cliche, “A failure to plan is a plan to fail.” In fact, a wealth of data now exists on the difference a written business plan makes.
Even better—if you’re pressed for time—we’ve compiled the 10 steps and examples into a downloadable (PDF) template: But, first things first …
A business plan is a comprehensive roadmap for your small business’ growth and development.
You already know the obvious reasons, but there are so many other good reasons to create a business plan that many business owners don't know about.
So, just for a change, let's take a look at the less obvious reasons first and finish with the ones you probably already know about. This is another new obligation (a fixed cost) that increases your risk.