A business plan is a document that describes your business and makes detailed projections about its future. Much of what the plan deals with is the financial part of the business, though there is also going to be information about the owner of the company, the principal company employees, and also about employees that might be hired in the future.

While many people write a business plan in anticipation of getting a loan, or as a way to get financial support for their business from a venture capitalist, a business plan may be written purely for internal use. A business plan can be a way of assessing the current state of the company, of determining where the company will go in the future, and, if necessary, a blueprint for breaking the company apart.

By using a plan, the company can track itself. A plan can help the owners recognize problems before they become insurmountable.

The Physical Look of the Plan

A business plan is, in a sense, a work in progress. A new business makes projections, but until the company has been going for a certain length of time, it cannot know whether those projections are accurate. Once you have been in business for a while, you can use accurate numbers to make more accurate predictions. Thus, the copy of a business plan that stays in-house should be in a format that allows it to be changed easily. A three-ring binder is appropriate for this type of plan.

However, many companies use their business plan as a way to borrow or raise money. The copy you give to the bank loan officer should be nicely bound, with a professional-looking cover.

The plan itself needs to be long enough to give all the information that is needed, but at the same time, it should not be so long that the reader gets lost in its facts and figures. As a general rule, 30 or 40 pages is good enough.

You should make enough copies so that you can leave one with each bank officer or venture capitalist that you talk to. However, if for some reason you do not get the loan or the financing, be sure to get that copy back.