by Ronald Claiborne

Created on: September 10, 2010

     A business plan is a document entrepreneurs write showing a bank the business need finance, communicates the vision to others, and send a strong message the entrepreneur is undertaking the important tasks to insure the success of the business (Liao & Gartner, 2007/2008).  Writing a business plan is a document endorsed by the Small Business Administration, SCORE, and Women’s Business Centers as the best way to improve the chances of launching a successful business (Liao & Gartner, 2007/2008).  According to Liao and Gartner (2007/2008) entrepreneurs who write business plans are six-times more likely to be successful in launching a business.

     Business plans are representative of the business framework and context that identify the strengths and weaknesses of the business, the resources needed to operate the business, and the personnel and other key resources needed to insure the success of the business (Liao & Gartner, 2007/2008).  Entrepreneurs who write business plans can identify problems the business may encounter by first running the business on paper.  According to Potocan and Mulej (2009) some entrepreneurs are derailed in their efforts because the business lacks human resources, capital, and crucial knowledge that can easily be detected when writing the business plan.  By having a plan (Liao & Gartner) the business is better positioned to attract investors, suppliers, customers, and employees that will improve the chances of the business being successful.

     A business plan is not a one-time fix-it-all proposition but a document that must be revisited often because it should change as the business grows to meet the ever changing dynamics of the business environment.  Some reasons that have been offered for not planning include: the unpredictability of the business environment and the use of meager resources to take action rather than spend the time on planning (Liao & Gartner, 2007/2008).  Operating a business without a business plan is possible in the short-run but will leave the entrepreneur poorly equipped to face the uncertainties of the business environment.  Having a business plan will help the entrepreneur to make some contingency plans for the uncertainties of operating a business.  Being an entrepreneur means the taking of risks but the entrepreneur can leverage the risks so he or she will be better equipped

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