Why should I bother with a business plan?

There are a whole host of reasons to justify the preparation of business plans, not just simply for business start-up enterprises, but as a model of good practice for established organisations; and any one of these reasons in its own right, should make the planning process a worthwhile exercise, if it is done properly. However, the important thing to remember is that just producing a good business plan alone will not result in a sound, profitable, or prosperous business. The business plan is just that a plan and like any other plan, the only way to see if it really works is to monitor its progress at regular intervals, so that you can respond to any potential problems which may arise, and change or modify your business strategy as necessary. So, let us take a look at some of the reasons why people take the trouble to produce business plans:

First, the process of producing a business plan, acts as a very efficient method of focussing the ideas of potential entrepreneurs, in terms of defining their objectives, assessing their own abilities to organise and run the business. It also acts as a means of testing the viability of the business proposal before actually committing its proposers to any substantial expenditure or investment. Typically, this type of plan would be prepared before the start-up or acquisition of the business, and certainly before any substantial financial commitments or investments are made.

Second,...