What is the Purpose
of a Business Plan?

What is the purpose of a Business Plan?

Often the purpose of a business plan is to help you to raise
start up funds for your business.

But there are many other reasons and benefits for writing a business plan.

You might have a great idea. But if you don't make enough sales to cover your expenses you will never be able to make a living from your business.

Completing a business plan will show you whether your business idea is going to be viable.

A well researched business plan lets you:

• determine your objectives
• reveal potential markets
• spot weaknessess in your strategies
• take advantage of opportunities
• increase your chances of finance approval
• focus on your goals, and
• crystallize the vision that you have for your business

Elements of a Business Plan

Business Plan Layout

• the Executive Summary
• the Business Structure and Legal Requirements
• your Marketing Plan
• your Operations Plan
• your Financial Plan
• your Action Plan
• Appendices - any supporting documents

See here for a more detailed description of the components of
a business plan.


The Executive Summary should be written last. It is a summary of the entire document. The Executive Summary highlights the key points of your business plan. It should contain a summary of each of the major components of the plan.

The Executive Summary highlights the main points and summarizes your business idea. It is also where you list the opportunity itself and your competitive advantage. It should form a compelling argument stating why there is an opportunity and how you will penetrate that market.

It is in your business' best interest to finalize a business plan. Yes, it is time consuming and some amount of research will be necessary. But the rewards are worth the effort involved.

If you're an established business
a plan can reveal untapped opportunities. You will be able to identify areas of improvement which will improve your cash flow situation and improve your bottom line.

If you're thinking about starting business
a plan will show you if your idea is viable. It is much better to know if your business has a chance of succeeding BEFORE you commit yourself legally and financially.

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