According to Wikipedia, a business plan is a formal written document containing business goals, the methods on how these goals can be attained, and the time frame within which these goals need to be achieved. It also describes the nature of the business, background information on the organization, the organization’s financial projections, and the strategies it intends to implement to achieve the stated targets. In its entirety, this document serves as a road map that provides direction to the business so it can plan for its future and avoid obstacles on the road.

However, most entrepreneurs do not invest in writing a business plan and often believe that it is only required for bank financing purpose. This is a mistake as while business plan do not predict the success of any business venture, it helps in reducing business failure as great planning helps in projecting what resource materials would be needed and then working consciously to identify and providing them.

A business plan serves as a bridge between the present and the future as it shows you how you will get there. In preparing it, it will help determine if an ideal is feasible, help find the missing pieces in the quest for starting the business by ensuring that the goals, sales plan, marketing, staffing and financing needs are what can easily be worked upon in order to avoid wasting resources such as effort, time and money. As you map out the plan further, you may discover unforeseen challenges that could be tinkered with and if the ideas are still not reasonable, then it is time to refine the idea or drop it entirely.

A good business plan would also show that all fundamentals of the business has been covered and people can invest in it.

Here are a few tips that can help you write your business plan:

Make it Clear and Concise:Avoid using too many technical words and jargons that others do not understand. Make it simple, straight forward and concise enough to be understood so that the object and goals of your business is clear.

Clear Communication: The vision, goals and purpose must be included. It should also include the resource requirement, marketing and sales plan, finance and funding and competition as well as state the industry you want to operate in. 

Be Realistic: Ideas are two pennies worthif they cannot be converted to profitable business ideas and once you begin to put them down, you will discover some may not be feasible and viable due to stiff competition, high penetrative cost, level of capital involved or even the absence of a viable market.

A good business plan should have all the elements of these tips so that once written, it would be convincing enough to show that the business is feasible.

Why do you need a Business Plan?

• Financing Purpose: You may not have sufficient capital to either start or scale up your business so other people may want to invest in it when they see such promising or viable business idea. These people could be in the form of venture capitalist, angel investors or even friends. Same people may even want to go a step further by making it a partnership venture.

You may also use it to get funds or grants from banks or other multilateral organizations.

• Talent Sourcing: Sometimes when you need to recruit candidates, especially for businesses that are just starting out, you can show potential employees your vision for the business so they can identify with where you are going and also see if their goals aligns with your vision.
• As a Gauge: It can be a tool to identify gaps, challenges or even opportunities that were not part of your projections but which became more glaring as you map out the plans thus you could amend or revise the ideas before concertizing it or expending money on a wasteful venture.