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A business plan is a written document that describes in detail an organization's or a company's current status and plans for several years in the future. It will explain in detail what is happening today with the business, the expected needs, the vision, the defined markets, and the projected results of the business.

A business plan spells out a company's action plan for a specific time frame. It should clearly explain the what, why, when, who and how of the company or organization.

A business plan includes detailed analysis of the risks that the company plans to take to increase the over all profit margin.

Why should I prepare a business plan?
*to define your business purpose.
*to help you to identify your customer and who you are targeting.
*to keep you focused and keep you from wandering off the plan.
*to use it as a selling tool when dealing with lenders, banks, and investors.
*to see your weakness and make changes at any time.
*to set goals.
*to have a business road map that you can go to for reference at any time.

There are many formats you can use to create your business plan. There are many books, kits, websites, and software that will direct you step by step in what to do and write. Here are the basic topics that should be covered in your business plan.

1. Create A Vision Statement
This statement explains the business goals and purpose.

2. Your Team
Each person involved in the business will create a resume focusing on experience and education that will help with the new business being created. This type of biography should be done on everyone on your management team.

3. Your Business Profile
This is where you explain exactly how you plan to go about running your business, what market you are planning to serve, and what product or service are you offering in exchange for a fee.

4. Economic Assessment
This is where you provide demographic studies, traffic flow studies, area assessment, and customer analysis.

5. Cash Flow Assessment
This section is where you provide detailed information about the money you have put into the business to start it, the money used for supplies and equipment, the money paid out to employees and your advisory team (lawyer, bookkeeper, accountant). You will also include a report comparing the cash going out vs the cash coming in.

Also, your business plan will include your marketing plan, your expansion plan, and a detailed explanation of what you plan to do if something goes wrong, and how you plan to handle problems with management, finances, and poor bookkeeping.

The business plan part is the first step in starting a business. This is the part many people fail to take serious because they want to make money, now. Making money is very important, but being successful is more important. You need to be able to answer the - what, where, why, when, who and how - before you can move on to the money making part. With the help of books, kits, software, and information you can find on your computer by typing in, "how to prepare a business plan" in any search engine, you are on your way to creating a successful, prosperous, money producing business.

Learn more about this author, Debra Steele.
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