Statistics says that one third of the new business will fail within their first year and of those remaining 95 percentages will not survive beyond five years. Poor planning is the major factor affecting this failure. A comprehensive business plan is the most important document we will have to produce when starting a business. A well planned carefully structured business plan is the key factor of the success of an entrepreneur.
The basic requirement is the clear understanding of what you hope to achieve and how will you do it. The reason for making a business plan varies according to the situations. The following are some examples.
- If we start a new business we have to assess every aspects of the business and explain how it will execute.
- For an already existing business we have to asses the strengths and weakness of it to decide whether we will be able to make it a success.
- For the need of extra finance for the development then we need a plan to convince those who are putting capital into our business that we can and will succeed.
- If we are applying for government grants for the start up, we need a plan to suitable for the terms and conditions as per their norms.
When preparing the plan we should always remember who the plan is for. Our business plan benefits various types of people who will be using our plan as a basis of making decision. The decision based on our plan will directly affect the success of the business, so utter care should be taken while preparing the plan.
The plan is to be prepared in a clear and logical format. This will enable the reader to understand our business and make decisions based on it to benefit our venture.