What Is a Business Plan and Its Main Objective?
When you decide to start your own business, it is necessary to understand how you will organize it. And that is the moment when you ask yourself “Do I need a business plan?” To give an answer, we need to understand fully what this definition means.
Business Plan Definition
A business plan is a written document used to describe a proposed venture or idea. It typically includes the current state of a business, future vision for the business, target market analysis and challenges, sales and marketing strategies, and funding requirements to reach stated goals (“Business Plan,” 2009).
Simply saying it is an accurate planning for future business activities. Believe it or not, having a brilliant idea is not enough. It must be put into figures, tables, graphs, structured lists and numbers.
Main Objectives of Business Plan
Next question that appears is: “What are the main objectives of a business plan? Why do we need it?” The answer is quite simple. To persuade. First of all, the entrepreneur himself. He needs to understand whether his idea is good or bad, whether business is profitable or not. After that, he can persuade others.
As Mike McKeever points out in his book How to Write a Business Plan (2007) “A business plan will help the business find financial backers. It is important to show that giving an aid, investors will get financial satisfaction in the end. Also, there are a lot of officials, clerks that need to be persuaded. For instance, will you be able to pay taxes regularly; will your café fulfill all hygiene and fire safety requirements; does the town need café at all.”
All in all, based on these gruff and simple examples, we can define the main task of the business plan: convince yourself at first and then the rest that your business is right, important, profitable, and deserves attention, approval and funding.
“Business Plan.” Encyclopedia of Management.(2009). Business Plan. Retrieved January 19, 2016, from http://www.encyclopedia.com/topic/Business_Plan.aspx
McKeever, Mike P. (2007). How to Write a Business Plan. Berkeley, CA: Nolo.