BUSINESS PLANS need not be elaborate, but they do need to be complete.  A good business plan covers the major functions of an ongoing business concern and sets the basic objectives for each in the plan horizon.

A business plan should cover the following key areas of a business: Industry, Market, Competition, Marketing, Management, Operations, Human Resources and Finance.

The time horizon of the business plan is typically three to five years with the first two years in monthly or quarterly buckets with more specificity in the sales forecast and specific expense lines.  The level of detail in the plan can be quite varied depending upon the complexities and maturity of the business.

But, why do companies need a business plan?  What is to be gained by spending the time and effort to develop it?

1. Determine if the proposed business makes economic sense

2. Serve as blueprint for developing and running the business

3. Establish banking or lender relationships to secure CapEx and Working Capital

4. Entice potential investors to join the business