A business plan can be a formal document you hand to some organization, investor or you keep for internal use.
It is also a strategy for how you will execute every part of your business. It does not necessary have to be written since you can have the strategy in your mind. What it is important is that you have a clear and viable plan of action before you start your business or you launch a new vertical/area.
The approach for creating a business plan can not be like doing some homework. Like an assignment that you have to prepare before starting a business.
When business plan are needed?
There is two major reasons why you should write a business plan. The first is when some organization or individual that you want to work with ask for it. The second one is for yourself, to help you organize your ideas.
Even if you do not always need a formal business plan to give to an investor, you should always go thought a rigorous planing process in order to create the strategy of the business.
The process of thinking and planing your business can help you to identify and fix some mistakes before you start. A high percentage of startups fail within the first five years because starting a business requires more than just a good idea, it requires planing and strategy.
In another hand, the process of writing a business plan can help you to develop strategies more easily that if you business plan is just in your mind. Also, it will be very positive when you want to communicate and align the strategy with others, for example with your partners.
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