Many people are afraid of the idea of preparing a business plan because they think it is a complicated set of unnecessary documents which exist only to make their life more difficult. Business plans are necessary because they help an entrepreneur to see his business. Instead of talking in abstract terms about the customer base and the profit potential, a business plan helps to see the business deals in concrete terms. A business plan also forces an entrepreneur to think through every aspect of his business in advance. These plans also make other people interested in someone’s business. A business plan shows people that the creator of it is professional and he understands what it takes to start and manage a business. If external funding, loan or investment is needed business plan is all the more necessary.
A business plan should cover five main sections which are listed below.
- Executive summary: This section technically appears first, but entrepreneurs write it last as it is the summary of an entire business plan. Many readers do not go beyond the executive summary, so this should contain the gist of all sections and such readers should get an overall idea about the particular business just by going through this section. Therefore, an entrepreneur must make sure that this section is comprehensive and well-written. An entrepreneur must read the entire business plan before writing the executive summary. The information which will stand out to a reader must be included in the summary.