The Importance of a Business Plan

April 5, 2016


Creating a good business plan will not only serve to guide you through the various phases of the development of your business but can also serve as a management, planning and communication tool.  Careful time and consideration needs to be devoted to writing your business plan and there are fundamental components that should be present. 

  1. Executive Summary: Simply a one page explanation of what your business is, the industry you are competing in and work to set your apart from the competition. Include what is sold & who you sell to.  You will want to include a brief financial overview, and key points from the marketing, operational and financial planning sections of your business plan.  It’s easiest if you prepare this last and also think of it as your “elevator pitch”.

  2. Company Description: Legal establishment, history, start-up plans, etc. 

  3. Product or Service: Describe what you’re selling. Focus on customer benefits. 

  4. Market Analysis: You need to know your market, customer needs, where they are, how to reach them, etc. 

  5. Strategy and Implementation: Be specific. Include management responsibilities with dates and budget. 

  6. Management Team: Include backgrounds of key members of the team, personnel strategy, and details. 

  7. Financial Plan: Include profit and loss, cash flow, balance sheet, break-even analysis, assumptions, business ratios, etc. 

  8. Strategic Plan:  Project where you want your company to be in years to come; say the next two to five years.  Nothing too long term as it becomes quite impossible to project particularly in the e-commerce world. Include Strengths and weakness affecting your business, opportunities and threats impending. (SWOT – we’ll discuss this a bit later)

FREE Templates for Business Plans:

Management Tool
An effective business plan can be used to help you track and monitor the progress of the business.  You will be able to compare and contract projections and real accomplishments.  

Planning Tool
You will be able to review your business plan and use it as a guide through the various phases outlined in the growth of the business. 

Communication Tool
The well developed business plan will serve to support loan requests, attract venture capitalists and even if interested in recruiting strategic partners. The business plan serves as an effective way to convey all aspects of the business to interested parties. 

Reference and samples of business plans:


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