Putting together a business plan is the first step to deciding whether your business idea is feasible. It helps you determine whether you can live off your earnings.

Businesses with a documented business plan are much more likely to survive and thrive.

Why have a business plan?

A business plan helps you add up the personal and living expenses you need to cover. It identifies what it will take to reach your financial and personal goals. It lets you determine whether your business is going to be profitable or sustainable.

Your business plan helps you identify the amount of money your business needs to make to satisfy these vital objectives:

• income that maintains your personal expenses and current lifestyle
• a percentage return on the capital you've invested
• additional returns based on the risks you're taking
• an additional amount that's enough to enable you to invest in the future growth and development of your business.

Planning to meet these objectives builds a business that can provide the financial and personal rewards you want.

The business plan is a must!

Almost everything to do with your business depends on your business plan, including:

• management of your operation and finances
• credit from suppliers
• funding from external sources
• promotion and marketing of your business.

The business plan benefits

Your business plan will help you identify:

• your customers
• your markets
• your pricing strategy
• the competitive factors affecting your business.

By creating a business plan, you can:

• define your competitive advantage
• discover new opportunities
• expose any deficiencies in your business.

Finally, a business plan will help you:

• increase your profits
• generate interest from potential investors
• allocate resources most effectively.