In my conversations with small business owners, I discovered that most don’t have a business plan. So, I wondered why are people neglecting this important task? Isn’t it a primary requirement when starting a business?

In this blog post, we’re going to discuss about business plan. Why is a business plan needed even if your business is just small or operating from home? And how to write a business plan following a simple outline.

What is a Business Plan?

According to Wikipedia

“A business plan is a formal written document containing business goals, the methods on how these business goals can be attained, and the time frame within which these goals need to be achieved.”

If you’re planning to start a home business, make a business plan first. It will allow you to see all the tasks you must accomplish before your business is operational.

It is important to plan, if you want to succeed in your home-based business. You may think your business is too small to have a business plan, but every business, no matter the size, can benefit from strategic planning.

One of my favorite quotes says…

“If you fail to plan, you plan to fail.”

If you don’t have a business plan to follow, how will you know you’re right where you should be?

Like in navigating waters, a business plan can be your map in doing business. You will know your current position, make changes with your actions, or maybe make changes in the plan itself.

With a good plan, you will be able to get where you want to go.

The Importance of a Business Plan

Having a business plan is so important as if your success depends on it.

See your business as a ship and your business plan as your map. And it’s not just an ordinary map, for it contain other important information about the ship as well.

Your business plan contains information such as funding, credit from suppliers, operation including promotion and marketing.

Outside investors, and sometimes lenders too, demand for your business plan before they give you money. A complete business plan shows whether your new venture has the potential to make a profit.

Presenting a business plan

But success with your business still depends on what you put into action and how you implement it. It’s just a tool to help you turn your dream into reality.

Theoretical may it seem, at least you have a guide. It’s your job to follow through with your guide or make adjustment accordingly. It can be you adjusting to the guide, or adjusting the guide.

How to Write A Simple Business Plan?

A business plan is a written document that outlines everything about your business. It orients other people about your business, and it guides you in your operation.

Before you start writing a business plan, consider these 5 questions:
  1. What is the need that you want your product or service to serve?
  2. Who are your potential customers?
  3. How will you reach your potential customers?
  4. What assistance will you need?
  5. How much money your business need to get off the ground?

Once you have done your research, you need to put them in writing.

It is important that you are specific with the time coverage of your business plan. The usual coverage is one year but there are lenders and investors who usually ask for a 5-year coverage.

Standard Business Plan Format

The first page you should create is the cover sheet containing the company’s name and the date the plan was written.

Organize your business plan in a way it has table of contents that lists major subject and headings, and the page where each topic beings.

Here are the common topics in a business plan:
  1. Summary Statement
  2. Company Analysis
  3. The Product or Service
  4. Industry Analysis
  5. Market Analysis and Strategy
  6. Management Analysis
  7. Ownership
  8. Expansion Goals
  9. Financ