What is a Business Plan?

A Business Plan is just that - a plan for all aspects of your business, laid out in order to help ensure the success of the business. Within it, your business can be fully seen, including its purpose, mission, strengths, weaknesses, potential, strategies, and structure.

A business plan is the primary way for others to get to know your business idea. However, much more than this, a business plan is the primary and best way for you, the entrepreneur, to get to know your business. The reason for this is that one of the best ways to see if your business idea is feasible is to test the idea - Will it be able to generate revenue in the midst of a set number of competitors? Will it be able to draw the target market in your area? Will sales month to month be enough to cover monthly expenses? The research that goes into preparing a business plan is the means by which you get to know the strengths and weaknesses of your idea. The process of completing a business plan also allows opportunities not previously recognized to become evident.

Business plan preparation is a process in which the journey is much more valuable than the end result. For this reason, covering most of this journey on your own, rather than outsourcing all aspects of the business plan, is almost always the best path to take. Throughout the process you should be able to look at your business from at least three perspectives:

The Entrepreneurial Perspective - This is simply your view of the business, including your opinions and insight into the viability of the business idea, how it will run, how long it will take for the business to turn profitable, and so on.

The Lender/Investor Perspective - If you will be soliciting loans, grants, outside investments into the business, and even gifts from family members and friends, you will want to consider what information will be most important to them in deciding whether or not to make an investment in your business.

The Partnership Perspective - If you will also be presenting your plan to others in order to solicit their help or partnership in the business, you will want to include information that is useful to them and convey your plan in a way that also addresses any concerns or questions that they may have.

Each of the above perspectives will be highlighted throughout this section in order to help you produce a more well-rounded business plan.