Tax Tips: Why Do You Need a Business Plan?

From my experience the main reason you need a business plan is because many people decide to either:

not go into business OR

go into a different business OR

wait to go into business

after they write their business plan. Wouldn't you rather know this before you opened your doors than after?

So, what is a business plan anyway? A business plan is a written document that explain in detail all aspects of your business. A business plan usually includes:

Executive Summary - a summary of the entire plan

Mission, Vision A& Description - why the business will exist, the expected or intended future of the business, the business goals & objectives, philosophy, target marget, etc.

Products & Services - what your business plans to offer

Marketing Plan - how to best market the business, barriers to entry and how to overcome them, features & benefits of your products & services, how much of each product & service you believe you can sell in a year

Operational Plan - explains the day to day operations of a business

Management and Organization - who will be in charge and how the business will survive it's managers/owners

Personal Financial Statement - the financial resources of the owners - a balance sheet or list of all assets and liabilities of each individual owner of the business.

Start-up Costs and Capitalization - List of expenses you will incur before your business begins (like consulting costs, attorney fees, utility deposits, furniture & fixtures, rent, etc.), the amount of cash the owners or investors intend on putting into the business, loans and lines of credit the business intends on obtaining, etc.

Forecasted Profit and Loss - A detailed 12-month forecast of your anticipated income and expenses. It's also helpful to have a forecasted cash flow statement and breakeven analysis.

Yes, it's a lot of work to create a good business plan, but you'll be glad you did it. In addition, there's a lot of resources out there to help you, such as: