Business plans part 1: what are they?
A business plan is a written document that describes a business, its objectives, its strategies, the market it is in and its financial forecasts. It has many functions, from securing external funding to measuring success within your business.
This first installment in our five-part business plan series will show you how to prepare a high-quality plan using a number of easy-to-follow steps.
The audience for your business plan
Many people think of a business plan as a document used to secure external funding. This is important because potential investors, including banks, may invest in your idea, work with you or lend you money as a result of the strength of your plan.
There are many other benefits to creating and managing a realistic business plan – even if you just use it in-house. It can:
- help you spot potential pitfalls before they happen
- structure the financial side of your business efficiently
- focus your development efforts; and
- work as a measure of your success.
The following people or institutions may request to see your business plan at some stage:
- external investors – whether this is a friend, a venture capitalist firm or a business angel
- grant providers
- anyone interested in buying your business
- potential partners
You should also bear in mind that a business plan is a living document that will need updating and changing as your business grows. Regardless of whether you intend to use your plan internally, or as a document for external people, it should still take an objective and honest look at your business. Failing to do this could mean that you and others have unrealistic expectations of what can be achieved and when.
Founder and editor of www.motherswhowork.co.uk, a mother of two wonderful children, wife, entrepreneur (check out www.geekschool.co.uk) and journalist.