A start up, though small initially, is a complete business in itself and should follow all the required steps which any other business shall follow. A business plan is an integral part of every business whether big , small, an established old business or even a startup.
It is something that gives a foundation to judge for a corrective action to be taken if things are not going as was expected. Further it is used as an important tool by an entrepreneur in:
Resource allocation – Fuller utilisation of available time, energy and money is possible only with a sound strategy.
Funding – Increases the chances of getting good funding as a business plan gives future forecast of the business growth and makes it easier for an investor to calculate the risk involved.
Getting loan – A business plan gives a confidence to the banks and financial institutes over the business capability to pay its interest and repayments on time.
key employees and partners – Easily gets aware with the long term goals and strategies of the business to decide their terms accordingly and get surety of the bright future prospect.
However while designing a business plan it is quite essential to ensure that it should be thoughtful and truthful without any unachievable high projections.
A business plan should always be in writing, as a written plan highly increases the chances of it being followed. Fact that at initial stages an entrepreneur is too busy in getting the customers shall not be a plea for not writing down the business plan.
Also It should be as simple and clean as possible to make it easily communicable and understandable for business vendors, partners , key employees and investors to give a peek into the logical thinking and vision of an entrepreneur.