Clarification

• When you are considering starting a business, writing out a business plan can help you clarify the ideas in your mind. During this period, it can help you significantly to get the ideas out of your head and onto a piece of paper. It can be difficult to envision exactly what your business will look like until you write out some specifics. While you might have some basic ideas about what the business will do, writing them down often brings clarity to your vision.
  
  

Help With Financing

• If you plan on seeking out funding for your new business venture, a business plan will be a must. This is true regardless of whether you are getting a bank loan or if you want to attract private investors for your company. The bank or the investors will need to see something in writing before they will consider giving you the money you need for your business. It also helps your potential investors visualize what it is that you will be doing with your company.
  
  

Financial Planning

• One of the more essential parts of the business plan is the financial projections. This is the part of the plan where you estimate how much it will cost to engage in business. You also estimate exactly how much you will bring in as a business. This is important information for your investors or lenders, but it also helps you evaluate the potential of the business. If you are realistic with your projections, the business should still look attractive from an investment standpoint before moving forward.
  
  

Not Required

• Even though many businesses could benefit from using a business plan, you may not want to create one for your business. If you are funding the entire business with your own savings and do not require investors or lenders, the business plan may not be necessary. If you have a clear picture in your mind of what you want to accomplish with your business, the business plan step could be skipped. However, a business plan is an important roadmap for your business no matter the source of your funding. Even though it may not be required, a detailed business plan could still provide considerable value as a planning tool.