What is a business plan?

Businesses large and small can benefit from drafting business plans before beginning operations. A business plan is a description of a business’ projected future, and this document will spell out exactly what a business owner plans to do and how he or she will put that plan in motion.

Forbes says that entrepreneurs can benefit from business plans because the process of developing them will help business owners understand which type of business he or she would like to create and the type and amount of funding and other resources that will be needed to get the business functioning. Although business plans may be optional, one instance in which they are often required is when entrepreneurs are seeking funding. That’s because lenders often require business plans to weigh the risks and benefits of investing in a potential business.

Entrepreneurs can use templates to draft business plans and then fill in specific details. Here are some components to include in the plan.
• Executive summary: This is a synopsis of the entire plan with all of the essentials briefly discussed. Include the reasons why the business will be successful.

• Business description: In this section, entrepreneurs can provide a profile of the company. Information can include location, size, planned operations, and the target market.

• Industry analysis: Here business owners discuss the market in which the business will be competing, including how large the market is and whether or not there are any trends affecting this type of endeavor.

• Marketing, products and sales: In this portion of the plan, owners mention the products or services being offered. Strategies for branding, marketing and how the product/services will be sold also are included.

• Operations: The operations portion of the plan will detail the processes the business needs to address on a daily basis to be successful.

• The team: In the business plan, entrepreneurs should also identify the personnel who will be helping to run the company, including why these people are qualified for the job.