Business Plan

A business plan serves two main purposes. It helps founders think through their idea carefully before committing time and money. And it helps persuade others, such as banks, investors or partners, to support the business.

A typical business plan includes a summary of the business; a description of the product or service; an analysis of the market and competitors; a marketing and sales plan; an explanation of how the business will operate; information about the management team; and financial forecasts, including expected sales, costs, profits, cash flow and funding needs.

For example, someone opening a bakery might use a business plan to estimate start-up costs of 80,000, forecast monthly sales and costs, show when the bakery expects to break even and explain why a bank loan of 50,000 would be repaid.

A business plan is not fixed. As the business develops and conditions change, the plan should be reviewed and updated. Its value often lies as much in the thinking and research behind it as in the document itself.