6. Why Write a Business Plan

Why Write a Business Plan

A Business plan helps you evaluate the feasibility of a new business idea in an objective, critical, and unemotional way.
Marketing — Is there a market? How much can you sell?
Management — Does the management team have the skill?
Financial — Can the business make a profit?

It provides an operating plan to assist you in running the business and improves your probability of success. Identify opportunities and avoid mistakes. Develop production, administrative, and marketing plans Create budgets and projections to show financial outcomes. It communicates your idea to others, serves as a “selling tool,” and provides the basis for your financing proposal.

Determine the amount and type of financing needed. Forecast profitability and investor return on investment. Forecast cash flow, show liquidity and ability to repay debt.

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