Using a Business Plan

You should be using a business plan as a tool with three basic purposes:

As a communication tool, it is used to attract investment capital, secure loans, convince workers to hire on, and assist in attracting strategic business partners. The development of a comprehensive plan shows whether or not a business has the potential to make a profit. It requires a realistic look at almost every phase of business and allows you to show that you have worked out all the problems and decided on potential alternatives before actually launching your business.

As a management tool, it helps you track, monitor, and evaluate your progress. Your plan is a living document that you will modify as you gain knowledge and experience. By using it to establish timelines and milestones, you can gage your progress and compare your projections to actual accomplishments.

As a planning tool, it will guide you through the various phases of your business. A thoughtful plan will help identify roadblocks and obstacles so that you can avoid them and establish alternatives.