A business plan is a written proposal addressed to potential lenders or investors. Typically, it describes a new business and tells why it is deserving of financial support (Earl C.). The first step beyond coming up with an idea for a business is to try and organize the idea. When organizing the idea the first consideration is the business plan. The business plan is a written organized bound book about your possible business. Before even writing the plan there is a great deal of information that must be gathered. This information will tell the person writing the plan more about the business and also create a good base to writing an industry analysis which will also let that person know how well that particular business is doing in the world. .
The typical business plan has about ten steps to it. The first step is an executive summary, which is a quick overview of what the business is about. The second step to the plan is a business description that is a more detailed summary of the business that includes the mission statement, and goals. The next three steps are analysis. These analyses are the target, competition, and the target market analysis. Marketing strategy is next followed by business operations, management of the business, and the business financials. The appendix is last which includes small areas of starting the business like floor plans and letterhead designs. .
Business plans are primarily known for bankers, not for the entrepreneur or the one writing the plan. Even if the bankers and the investors didn't need the plan an entrepreneur would still gather the information. .
But, the need to write it all down and put it into an actual bound plan has many purposes. The first of course is to obtain financing for the business. Bankers and other financing require a business plan. Anyone lending you their money will need to have some idea of your plans for repayment. They are going to want to know everything you know and think about your business.