A business plan is a document that describes all the goals and objectives of a business project and what steps must be taken to ensure that these goals are achieved, thus reducing the risks and uncertainties for the entrepreneur, company or investors.
A Business Plan is presented as an essential tool for several reasons:
- It’s a validation process for an idea, through which the entrepreneur obtains elements to help to decide whether or not to start a new project.
- It’s a tool for mitigating risks. When drafting a business plan, the entrepreneur studies the feasibility of his/her business, creates preventive measures against possible threats and challenges, scrutinises in depth the market and potential customers, and avoids unnecessary effort, unproductive investments and pointless expenses.
- It’s an essential document for the negotiation and acquisition of resources.
- It’s a mechanism for the entrepreneur to think about himself and about his business: Is it worthwhile? It’s what I dreamed of? After the business plan has been elaborated, it indicates new paths, even if one of them is the complete abandonment of the project, the reformulation of the project or possibly the shaping of a new idea.
- It’s a means of communication between the entrepreneur and his team, as the information in the document (objectives, mission, values, goals, and strategies) will guide all the stakeholders to unite them.
- It’s a dynamic tool to support management. Where necessary, it shall be adjusted and revised according to the new business requirements.
There are 1001 ways to build a business plan. on its website IAPMEI Portuguese Institute of Support to Small and Medium Enterprises and Innovation provides a framewrok for creating a business plan. It can be used as a reference but you do not have to stick to it rigidly. You should adjust your idea to the structure suggested or even use another structure.
All the information needed to draw up a business plan is available in these files: