A Business Plan is a Must for a Small Business

A Home Business Article Contributed by Elizabeth Fox-Wise

It is Amazing How Many People Open a Small Business Without a Formal Business Plan

While you might have a general idea in your head for your business plan, it is absolutely necessary for you to get your small business plan written down. You might be amazed at the numbers of small businesses being operated without a business plan.

Your Business Plan can be thought of as a resume for your small business. It should precisely define your business and outline your small business long term and short term goals and objectives. Because it provides specific and organized information about your small business, as well as moneys you will need to borrow and how you will repay them, it is a crucial part of a small business loan application. If you intend to apply for a small business loan, they will require you provide a business plan.

Writing a Small Business Plan

Before you begin writing your small business plan ask yourself some basic questions:

What service or product does your small business provide? What need does it fill?

Who is your potential customer market? Why will they purchase from your small business?

How will your small business reach its customer market?

How much capital does the small business require? Where will you get it?

The body of your business plan can be broken into four sections:

Description of your small business

Marketing

Finances

Management

An addenda to your business plan should include any supporting documents and financial projects as well as an executive summary.

Your business plan should always include a cover sheet and statement of purpose followed by a table of contents that outlines everything contained in the business plan. The addenda comes at the end of the business plan.

If you are not familiar with how to write a business plan for your small business you should seek help from a mentor.

Using Your Small Business Plan

Now that you have a good business plan for your small business, it is time to put it to use.

Your business plan is a tool to enhance communication, planning, and management of your small business.

For communication, it is your Small Business Resume. It is used to secure financing, attract employees, build relationships with suppliers, and more. A comprehensive business plan will show whether or not your small business has the potential to succeed. It will also show you have anticipated problems and solutions before they develop.

For planning, your business plan is your reference for growing your small business. It should help you to anticipate some hurdles you might encounter and hopefully avoid them.

And for management, your business plan helps you to track, monitor and evaluate your small business' progress. You can see how the actual growth of the small business compares to your business plan projections for growth and know if you small business is going off track before it is too late to recover.

For many reasons, it is imperative that your write a good business plan before starting and running a small business.