Individuals running small self-owned units with low revenues and lower profits are prone to ask What is a business plan? They did not grow, simply because they didnt have one, and never bothered to find out before. Evidently they dont care much where their business is headed.

Others wish to expand their business but have no idea how to go about it. Ask them what is their business plan and they shake their head, skeptical. Simply wishing will not lead to success. You need to chart down your goals and figure out the way to reach them. This is exactly what a business plan is all about. It guides the enterprise towards stated objectives through carefully chalked tracks and processes, taking into account future conditions and contingencies.

It is your company resume and includes, among others, the following: a current and pro forma balance sheet, a statement of income, and an analysis of cash flow. An enterprising business plan is crucial if you want serious consideration of that important loan application. The plan will contain specific and organized company information and loan repayment method and details. It will also describe the companys business model and guide your sales team and suppliers.

Your resources may be plentiful today, but only a business plan will help you allocate them wisely. Even with meager means, firms have managed to show record growth, due to careful planning. Good business decisions do not emerge from instant brainwaves; they stem from a predetermined strategy based on detailed financial projections, market forecasts and careful analysis of risks and uncertainties. The next time someone asks you what is your business plan, be prepared with answers. Tell them a business plan is what helps you stay afloat in bad times and lets you tower ahead of competition in good days. Planning generally pays.