Why a business plan is necessary?

A business plan provides a snapshot of all information relevant to the business you are starting and it is therefore regarded as a sound business practice.

What does a business plan do?

a) It gets your ideas out of your head and onto paper.

b) It reveals your financial needs :

• How much capital is needed?
• How much of this will be your own?
• How much do you need to borrow and from whom?
• How will you repay any loan?

If you are looking for a business loan from a bank or other financial institution, you should have a business plan with a cash flow projection (CFP).

The CFP will enable lenders to see that your business can sustain the repayments of the loan.

A business plan need not be a very complex document and you should try to do it yourself in order to understand and take ownership of it.

A simple business plan may be laid out as follows :

1. A cover or title page

2. Executive summary

3. Business overview

a. Business profile

b. The product or service

4. Management

a. Entrepreneurs

b. Management structure

c. Franchise information (where applicable)

5. The market

a. Industry analysis

b. Market analysis

6. Sales and marketing strategy

7. Financial statements and projections

8. Legal and regulatory environment

9. SWOT analysis and risk/reward assessment

10. Appendices and supporting documentation