What Is And Why Business Plan?

Creating a business plan is an essential step for every prudent entrepreneur regardless of the size of the business. It can be described as a written outline that evaluates all aspects of the economic viability of a business venture including the description and analysis of the business prospects. In simple terms, it represents a strategy and actions needed to make the business a success. It drafts overall objectives and details the steps and resources required to reach targeted goals of the business.
Business plan contain certain elements which include:
1. Business Profile: It defines and describes intended business and exactly how one plans to go about it. In many cases people may not comprehend your business idea unless if you clearly describe it.  It is therefore important to narrate the idea and show the necessary steps to actualize it.
2. Environmental  Assessment: all businesses operate within a given environment. The environment may present opportunities and at the same time may also pose some challenges. This assessment helps provide a complete appraisal of the economic viability of the business considering certain factors such as regulatory, competitive, demographic, social and other related factors.
3.Cash Flow Assessment: It determines cash flow that will incorporate capital requirements.
4.Damage Control Plan: All businesses experience some elements of distress. Survival depends on how well a business is prepared to cope with them. Potential threats are anticipated and plans to overcome them are provided.
WHY BUSINESS PLAN?
1.    It defines the objectives of the business using appropriate information and analysis.
2.    It serves as a selling tool in dealing with important relationships such as lenders, investors and financiers for financing the business.
3.    It uncovers omissions and weaknesses in a planning process.
4.    It can be used to get opinions and invaluable advice from experts who could save the business from potentially disastrous mistakes.
5.    It aids the business to be on the right track and also determines the number of sales required with sustained profitability whilst managing cash flow to realize objectives over the longer term.