What is a business plan?
A business plan is a 15-20 page document that outlines how you will achieve your business objectives and includes information about your product, marketing strategies, and finances. You should create one when you’re starting a new business and keep updating it as your business grows.
Rather than putting yourself in a position where you may have to stop and ask for directions or even circle back and start over, small business owners often use business plans to help guide them. That’s because they help them see the bigger picture, plan ahead, make important decisions, and improve the overall likelihood of success.
Why is a business plan important?
A well-written business plan is an important tool because it gives entrepreneurs and small business owners, as well as their employees, the ability to lay out their goals and track their progress as their business begins to grow. Business planning should be the first thing done when starting a new business. Business plans are also important for attracting investors so they can determine if your business is on the right path and worth putting money into.
Business plans typically include detailed information that can help improve your business’s chances of success, like:
- A market analysis: gathering information about factors and conditions that affect your industry
- Competitive analysis: evaluating the strengths and weaknesses of your competitors
- Customer segmentation: divide your customers into different groups based on specific characteristics to improve your marketing
- Marketing: using your research to advertise your business
- Logistics and operations plans: planning and executing the most efficient production process
- Cash flow projection: being prepared for how much money is going into and out of your business
- An overall path to long-term growth
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