Reasons for Writing a Business Plan

by Christopher Hundley

Overview

Before taking off with the great idea for a business, write down your business plan.
Analysis

A proper business plan includes proper analysis of your industry, its trends, your local economy and all other salient factors that will affect the success of your business. Writing a proper business plan forces you to do the research, and often rethink and retool your assumptions.

Income Projections

The analysis of your business' industry will enable you to make realistic income projections. These projections will help you in your day-to-day financial planning, especially if you have substantial start-up costs.
Funding

At some point, you are likely to try to obtain funding for start-up capital or an expansion. Any potential funder will want to review your business plan to ensure they are making a solid investment in your business.
Documentation

A business plan is a living document, detailing your strategic vision. Your business plan might require fundamental revisions at some point because of market or other forces. But to assess where you intend to take your business, it is important to understand where you have been.
Partnerships

A written business plan is of particular importance in the formation of partnerships. The business plan spells out, in ways partnerships often do not, the responsibilities of the principals in relation to the overall business strategy. Without a written agreement as to the mission, strategic vision and positioning of the business, there are likely to be lots of arguments among the principals.