A business plan is a document that plays a key role in both the starting and running of a business. It sets out a business’s overarching vision, looking at the thinking behind the concept and ahead at the plans for achieving its objectives. Business plans can range in length, but typically cover key details including your research, financial models, and marketing plans.
It is not a legal requirement to have a business plan, although it is strongly advised. It is an evolving document and so can change over time, with some people updating their business plan more frequently during startup stages.
Business plans are useful for forecasting potential challenges and planning sustainable growth. Managing your business through a clear plan is also an excellent demonstration of commitment and security for potential investors, who want to see a reliable and thought-through proposition.
A business plan should aim to be specific so that owners do not run into cash flow problems or find the business stagnating. It is advised that a business plan covers everything about the business: its target market, its brand, its products. It should also cover financial aspects such as expenditure, pricing, staff recruitment and where the funding will be sourced.
More than this, a business plan is an opportunity to showcase your business and why you think it will be successful. It is also an opportunity to showcase what you bring to the table, perhaps detailing previous experience which highlights your insights and capabilities.
Business plans can be private or can be shared with employees, investors, accountants or even family members. This can be a way to share your vision or a way to pick up on any discrepancies or errors you might’ve made.