A business plan has two core functions. The first is well known: it serves as a proposal to banks, leasers and investors when starting a business. The second purpose is to act as an operational document ? a preset guideline ? for when the business starts its operations. In both cases, a business plan is an essential and very useful document, and it is essential that you write one for your new business venture.

What is a business plan?

Essentially, a business plan is a document that explains and promotes a new or prospective business. Its goal is to explain what the business will achieve, why this product or service is needed and how the owner and stakeholders will operate the business.

It acts very much like a jobseeker?s CV; it highlights the benefits, advantages and necessity of the venture while outlining its future potential.

A business plan should be concise, should only include relevant information and should highlight the benefits of the new business.

The parts of a business plan

• Preliminary materials

  Your title page, executive summary and project introduction.

• Product or service

  Describe what your new business is planning to offer the market.

• Marketing and sales strategy

  Describe why the product is necessary and important, and how you plan to market it to the public.

• Organisational structure and personnel

  Describe the form your business will take (for example, partnership or Close Corporation) and outline which skills and people you will need.

• Legal requirements

  Outline the laws and regulations your business needs to comply with.

• Financial plan

  Lay out the business?s budget, costs and other financial matters like investment needs.

• Risk strategy

  Describe the biggest risks to your business and outline how you plan to mitigate or eliminate them.

Article continues on page two: a business plan as proposal and as an operational document...