Financial experts and entrepreneurs will tell you that a business plan is to an enterprise what dated goals are to a successful life. In other words, an enterprise is more likely to be successful when all involved know the details of what they hope to achieve and their roles in realising them.

If this be the case, the next logical question will be…

What is a Business Plan?

A business plan is a written document that details how a company will achieve its goals. Few good companies last long without one. For a fact, business plans give direction to new companies, while established ones use them to determine new ventures.

What’s more? It helps those executing the plan measure their outcomes with their expectations, where they are doing well, where they are not doing well, and what adjustments need to be made either to the plan or to their operations based on real-time events.

A business plan should also paint a clear picture of the costs, benefits, and risks that come with each important decision. Also, how the actions will be carried out, and the risks tackled.

Elements of a Business Plan

While no two business plans are identical, most will include the following elements:

  • Summary of the products or services provided
  • Market Analysis
  • Marketing Strategy
  • Financial Planning
  • Budget, Projected Revenues, and Operating Costs
  • Process, Operations, and Risks
  • Projection of Expected Performance
  • Exit Strategy

Operating a business without a plan is like walking through a busy street in blindfold. It might work, but the benefits a plan provides are abundant. They include the chance to test a product or service, the opportunity to think through an idea before sinking too much money into it, seeing how well your idea is doing and how much still needs to be done.

So, even if it’s a really small venture that you are operating out of your bedroom, ensure to have a written plan. After all, the big businesses of today started small too; so why not start on the right footing?

This article was adapted from investopedia.com