Many entrepreneurs only think about the business plan later. It could be days, months or years of thinking and talking about it with others before they run with it after getting a check from the investor or bank. For these people, writing a detailed business plan about what they know is a momentous chore.
However, this can be an opportunity to double check the idea for other's examination, to widen the idea and gain insight into the industry and competitors. A business plan should allow the entrepreneur to find funders and grow and run the company into the future.
The business plan can act like your feasibility/viability study. It should give you an idea as to whether the plan is good, needs improvement or should be scrapped altogether.
The business plan looks into the industry, customers and competitors who make entrepreneurs look at the prospect even more closely. You will learn if the market is as big as you thought, whether you can create an advantage regardless of the strengths and weaknesses of the competitors, and how to sector the customer market to sell to certain groups due to their needs and values.
Your business plan should also show you the money needs of your company. The lack of funding is the number one reason small business fall short. You should know the start-up costs and the cash reserves that you need to start your business and set it apart. This is where you need a cash flow statement to learn how much money you need to get it up and running.
Creating a business plan lets you fill the holes in your strategy. The research mentioned should help in creating a better marketing strategy. The key is to use the best steps from other businesses. You have to study those steps because they will highlight the holes in the management team and you can fill them with the hiring plan and strategy. Writing the business plan makes you answer those hard questions that will come from the funders ahead of time.