Developing a Business Plan

Purpose of the Business Plan

The business plan serves many purposes. The business plan presents a succinct overview of the what, how, when, and why of the business. First, it is used to communicate with investors. It provides investors with a concise overview of what the business is about and how investors can make money. In many ways, the business plan is a prototype of the business model. It is a scaled-down version that describes how the business will function. The business plan also serves as a platform for the business founders to communicate and it can be used as a blueprint for operating the business the first year. It also helps mentors and consultants to identify weaknesses, missed opportunities, strange assumptions, and overly optimistic projections. Finally, the business plan also serves as a tool for educating new employees on how the business works and how they will fit into the business activities.