Why Everyone Needs a Business Plan

The truth is that many successful businesses were started without business plans. In fact, the phenomenally successful Martha Stewart told us at Entrepreneur that she never wrote a plan for any of her businesses.
Now, while that may be fine for the likes of Martha, it’s generally not
a good idea. If you’re going to start a business, the smartest approach is to write a business plan. Now don’t worry—the process is not as onerous as you might think. After reading Road Map to Success, you’ll know precisely what you need to do to
write a winning business plan.
So what exactly is a business plan? It’s simply a written description of your business’s future—a document that tells what you plan to do and how you plan to do it. Business plans can help perform a number of tasks for those who write and read them. Perhaps the most important use of a business plan is for you, the entrepreneur, to document your vision and your strategies. Think of your business plan as a playbook of sorts, where you lay out your
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plays for the upcoming year. But it is a living document, one that needs to be consulted—and updated—often.
All entrepreneurs should write a business plan, but if you are trying to raise investment capital, a written plan that conveys your vision to potential investors is a must. Business plans may also be used to attract key employees, prospect for new business and deal with suppliers and vendors.
Having said that, there are some generally accepted conventions about what a full-grown business plan should include and how it should be presented. Your plan should cover all the important matters that contribute to making a business a success. These generally include:
n Your basic business concept
n Your strategy and how you plan to implement it
n Your products and services and their competitive advantages
n The markets you’ll pursue
n The background of your management team and key employees
n Your financial situation, including your sales projections, expenses and financing needs
Your business plan needs to be written in plain English—the plainer the better. You’ll also need to include a lot of numbers for budgets and other financial reports. Tables, graphs, drawings
and photographs are also not uncommon.
A business plan is a place to stick to facts instead of feelings, projections instead of hopes, and realistic expectations of profit instead of passion. Keep this in mind while writing your plan and you’ll have a better chance of injecting it with perhaps the most important component of all: credibility.