Reading #3--What is a business plan?
“A man to carry on a successful business must have imagination. He must see things as in a
vision, a dream of the whole thing.” Charles Schwab (1870 - 1916)
What is a Business Plan?
If you have ever built something from a kit, you often have a master plan or design to follow.
When starting a new business venture, the business plan represents that master plan. It is the
document that summarizes the business concept and the strategy to successfully implement
that concept. It starts by defining what the business is; states the objectives for that business
and then explains the strategies the company intends to use to achieve those objectives. It also
specifies the financing the company anticipates will be needed to achieve its revenue goals.
A business plan is also the document that will be presented to financing sources [banks or
venture capital firms] to support capital financing. It should clearly show that the business idea
is investment worthy by demonstrating the current market demand for the concept; the
resources needed to successfully launch and run the business, and the likely returns to the
investors. In this aspect, the business plan represents something of a sales document. It
should persuade investors that the business represents a good investment opportunity.
Does Every Business Have One?
Writing a business plan is an excellent planning tool for either a new or existing businesses. It
allows the owners or managers to review exactly what they want to accomplish and the
strategies and resources needed to achieve success. Writing a business plan makes the
owner[s] and/or manager[s] thoroughly think through the business in which they are about to
invest a great deal of time, money and effort. For a new company or an entrepreneur, a
business plan may constitute a feasibility study, helping to crystallize whether or not the
concept can succeed. It also forces companies to focus on specifically who they are and how
they want to operate. It provides the framework and guide that everyone in the company can
go back and consult when choice