A business plan is simply a written document that describes the future path of a business. A good business plan explains the business concept, summarises the objectives of the business, identifies the resources (both in terms of money and people) that will be needed by the business, describes how those resources will be obtained, and tells the reader why the business will succeed.
One of the most crucial steps in setting up a business is the planning stage. A business that has not carefully laid out its plans at the initial stages of development runs the risk of business failure and loss of investment. With competition in business being so tough and challenging, it is very important that you secure the foundations of your new business by proper planning.
Here are some of the major benefits and why it is important to develop a Business Plan. It is to address the frustrations of starting a new business.Help to secure financing from banks and other business development agencies. It helps you to outline your business idea, provides you with a measure to evaluate your results, helps to uncover potential weaknesses, helps to identify overlooked opportunities, helps to anticipate and adapt to change, test commitment of team members, help to understand your competition, and helps to understand your financial position.
The process of preparing a business plan will force you to think about your business, research some options, recognize opportunities and risks, and test some of your assumptions. Helps to identify the cash needs of your business, tells employees, investors and others about your plans and strategies Providing a benchmark against which to compare the progress and performance of your business.
The business plan consists of two main steps. The first step involves conducting market research to determine what consumers want and the second stage concentrates on developing a product or service based on that information.