A business plan simply put is a set of goals and a little background information on the business. There is a little more to it than that but that is just the basics. It is a map of the directions you want your business to take and why. This map includes but is not limited to these main points; finances, human resources, supply chain, operations and marketing. Writing a business plan will be attractive to lenders, clients and investors.
There are several reasons why you should have a business plan. It’s not only beneficial to your business but keeps things on the right track for you.
If after start-up of a company things are going well you will need to expand. Either through relocation or renovations this is a cost you should prepare for in advance. Anticipate that you will need that extra space and add this fixed cost into your finances.
New employees can help your business grow but this is also a risk and an added cost. You should have in your business plan when to hire and how many you can financially handle. Also included in hiring is also firing or people who decide to move on to another job.
When you apply for a new loan, whether to start a business or extend your business, the lender wants to see a business plan. If the plan is not written well with all main points being covered, you may not get your money.