business plan


Owning a business is a life-long dream for thousands, and perhaps even millions, of people. However, owning your own business requires a lot of responsibility. And in a lot of cases, you’re not only a business owner but the founder as well. This means that you also have the responsibility of starting up your new business right from scratch. Creating a new business involves a lot of stages and processed as well as a lot of decision making, especially if you are the sole owner of that business. And some of your earliest decisions involve your business plan.


business plan

A business plan is a very important document for business owners and entrepreneurs. It is a document that should fundamentally serve the function of defining the identity of the proposed company, as well as the nature and types of its proposed goods and services. Basically, a good business plan serves the purpose of saying the following from the standpoint of the business owner and the proposed company/business:

  • This is who we are.
  • This is what we do/will be doing.
  • This is our estimated capacity of production for a specified time.
  • This is our estimated cost/expenses for a specified time.
  • This is who we need to be/ where we are going.
  • This is how long it is going to take us to get to where we are going (usually in years).
  • This is an estimation of how long we will be needing- both now in the future, up to a stated period of time e.g. three years – in order to get to where we need to be. And;
  • This is the type and amount of progress that we should have made within a specified period of time (or time interval).
  • This is the estimated amount of returns that we will/should be expecting on our investments after a specified period of time.

Therefore, it is very easy to see that a business plan is a main part of a strategic approach to business planning. It is very important because it helps the business owner figure out what to do and when to do them when it comes to making all the decisions involved in starting a new business; thereby helping the business owner in all their endeavors to transform their new business from a simple spark of inspiration to an established enterprise.


There are many benefits involved in having a business plan. These advantages are boundless and numerous and they occur over a very wide range. They also have a notable impact on the establishment of any new business. The consequences of having a good business plan are mostly beneficial for both the business and the business owner. Some of them include the following:

business plan
  • A good business plan helps in making good decisions.

A good business plan typically helps the business owner in making good and sound decisions for the business, particularly during the planning process. This is because the process of planning a business involves a lot of decision-making amidst various alternatives. And a solid business plan helps to navigate this process, first by aiding the business owner to define exactly what they want their business to be and then, by helping them to outline everything (including all the available choices and decisions that have to be made) so has to help them being their dreams to life. Basically, in this regard, a good business plan serves as a highly defined and somewhat elaborate to-do list for the business owner, and since it helps to present relevant decision making process was into strategized bullet points, proper decisions would be made.

  • A good business plan helps in funding a business.

One of the most important – and most popular – roles played by a business plan is that it serves as a good tool for raising capital or funds for a business. The thing about a good business plan is that it speaks for itself. And even when you have shared your big, new idea with investors verbally, they will still want to see you business plan in many cases. This is because a good business plan goes beyond explaining your good idea and listing how and why it should work; a good business plan provides evidence of all these things using facts and figures (or at least, accurate estimates of facts and figures that should occur over a specified time). Since most investors only care about one thing –i.e. profits and returns on their investments – the presentation of a good business might just be the best part of your pitch, from their point of view; because a good busy plan will cover those things (or at least, projected estimations of those things within a specified period of time).

  • A good business plan will help to define weakness in your business idea

Every business idea has its own challenges and/or flaws. These flaws could present themselves in the general concept of the idea, the perception of the industry, market or competition, and even the amount of estimated expenses involved in creating the business. And the process of creating a good business plan unmasks these flaws to the business owner, particularly when market analysis is involved. Also, by revealing these flaws and weaknesses inherent in the business idea the business owner can consequently figure out how to solve the problems; thereby resulting in the creation of a very good business plan. Additionally, the unveiling of some of these flaws in the business idea can contribute new insight to the original business idea, as they may even present opportunities for new avenues and decision making paths in the creation of a business. All of these take away some of the risk of trial and error which many new business owners face in the process of establishing their businesses. This will translate to a higher ability to conserve business capital and other resources, as these assets would not be wasted during some avoidable trial and error processes, since many mistakes would be averted.

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