Why You Should Write a Business Plan When Starting a Business and What to Include

Attempting to start your own business can be an exciting and stressful endeavor at the same time and an essential piece to your success will be a well written business plan. A well written business plan will be what describes the business you are trying to start, explain your goals, and will be sort of a resume for your start-up. Why should you do this?

The main reason that you will want to write a business plan is money. Without a fine crafted business plan in hand you are not going to be in very good shape if you go to apply for a loan. Any time that a business, especially a new one, applies for a loan with a financial institution, it is a business plan that is asked for first.

When I was a stock broker I personally witnessed many would be entrepreneurs trying to secure financing for their start-ups without a business plan. I used to tell these people that their approach made about as much sense as going fishing without fishing pole. You can still attempt to catch fish in such a way, but you probably won't be too successful.

There are different ways in which a business plan can be laid out, but for the most part you will need to include seven sections. These sections will include the introduction, the executive summary, your organization plan, your marketing plan, all your financial documents, and any supporting documents.

Before you set out to put together your business plan you should ask yourself some questions about your start-up such as:

• What services will your business supply?

• Do the services you will supply fill a need?

• What is your target audience?

• How will you reach your target audience?

• How do you propose to fund your start-up?

Once you answer these questions you will have a better idea of what you will actually need to put into your business plan.

When you finally get to creating your business plan it is important that you include all the important financial information for your start-up which will include balance sheets (both current and pro-forma), cash flow analysis, and an income statement. Even though you may not have the real numbers on some of these items yet you still need to give projected numbers. These financial components are what most lending institutions will look at first and will scrutinize closely in order to help determine if they will lend you and funds or not.

While having a business plan is curtail for your success it is equally as curtail that your business plan be well written and contain all the pertinent information. If you do not feel confident in this undertaking you can always use business plan software or you can hire a business plan writer. Whatever you choose, just be sure you do not attempt to skip having one made, no matter how tempting it may be.

Source: Palo Alto Software, Business Plan Basics, Businessknowhow.com