I don’t recall who said Failing to Plan, is planning to Fail, but they hit the nail right on the proverbial head. In any new venture, be it planning a holiday road trip or starting your own business, you are not going to accomplish much unless you plan. Any road can take you somewhere, but how do you know if it is going to take you where you want to go?

So much is always said about The Dreaded Business Plan, but it is a crucial part of any business – be it a start up or an existing one. Even an existing business needs to review its Business Plan on a regular basis.

The Business Plan is a necessity. If the person who wants to start a small business can't put a business plan together, he or she is in trouble. Despite the critical importance of a business plan, many entrepreneurs drag their feet when it comes to preparing a written document. They argue that their marketplace changes too fast for a business plan to be useful or that they just don't have enough time. But just as a builder won't begin construction without a blueprint, eager business owners shouldn't rush into new ventures without a business plan. The business plan is a major exercise in demonstrating your managerial competence. The business plan identifies everything which must be done to ensure that your business is viable and will produce a profit. The importance of a comprehensive, thoughtful business plan cannot be overemphasized. A lot depends on it: funding, management of your operations and finances, credit from suppliers, promotion and marketing of your business, and achievement of your goals and objectives.

The basic components of any business plan should include: a current and pro forma balance sheet, an income statement, and a cash flow analysis. It helps you allocate resources properly, handle unforeseen complications, and make good business decisions. Because it provides specific and organized information about your company and how you will repay borrowed money, a good business plan is a crucial part of any loan application. Additionally, it informs sales personnel, suppliers, and others about your operations and goals.

Before you begin writing your business plan, consider six core questions:

• What service or product does your business provide and what needs does it fill?
• Who are the potential customers for your product or service and why will they purchase it from you?
• How will you reach your potential customers?
• Where will you get the financial resources to start your business?
• Will it be profitable?
• Do you have enough start up capital to sustain you until you start making a profit?

  When writing the Business Plan it should be divided into four sections - Description of the business, Marketing, Finances and Management Agenda, which should include an executive summary, supporting documents, and financial projections.

  Once you have considered the above and gone through each of the sections, you will realise that a Business Plan is a tool with three basic purposes: communication, management, and planning. As a communication tool, it is used to attract investment capital, secure loans, convince workers to hire on, and assist in attracting strategic business partners. The development of a comprehensive business plan shows whether or not a business has the potential to make a profit. It requires a realistic look at almost every phase of business and allows you to show that you have worked out all the problems and decided on potential alternatives before actually launching your business. As a management tool, the business plan helps you track, monitor and evaluate your progress. The business plan is a living document that you will modify as you gain knowledge and experience. By using your business plan to establish timelines and milestones, you can gauge your progress and compare your projections to actual accomplishments. As a planning tool, the business plan guides you through the various phases of your business. A thoughtful plan will help identify roadblocks and obstacles so that you can avoid them and establish alternatives. Many business owners share their business plans with their employees to foster a broader understanding of where the business is going. And hopefully, it is on the road to success!

  About the Author:

  Gwen Kloppers is a successful entrepreneur who has started her own home based business and operates several successful businesses. She now shares her experiences and her passion by helping other women to start and grow their own businesses.