It can also help to convince customers, suppliers and potential employees to support you.
Without one, it's tough to maintain a vision of the future and what the next steps for your business should be.
Think of it as a litmus test to prove that every step taken is part of a larger calculated effort.
If your business has already been operating for a few years, demonstrate stability through your finances.
But if your business is newer and not yet profitable, be clear and realistic with your projections.
The length and detail of your plan will vary with the audience of the plan and how mature your business is. This now gets into the tangible details of your business. Be sure to describe your product and how it is differentiated from similar ones.
You'll use a business plan to sell your business to investors, qualify your business with for a loan with lenders, and more. Any good business will have done comprehensive analyses of the market that its entering. What are your competitors doing well and not so well? How will your business operate on a day-to-day basis? How will it be priced, and how does that play in the market compared to competitors? You could have the best product in the world but it won't matter if no one knows about it.
Download a free business plan template on The Prince’s Trust website.
You can also download a free cash flow forecast template or a business plan template on the Start Up Loans website to help you manage your finances. Get detailed information about how to write a business plan on the Start Up Donut website.
Include income statements, balance sheets and cash flow statements for multiple years if possible.
When showing your financial outlook, project your vision out over at least five years.