Q&A - What are the benefits of business planning to a start-up?

The main reasons why a start-up should produce a business plan are:

• Provides a focus on the business idea - is it really a good one, and why?
• Producing a document helps clarify thoughts and identify gaps in information
• The plan provides a logical structure to thinking about the business
• It encourages the entrepreneur to focus on what the business is really about and how customers and finance-providers can be convinced
• It helps test the financial viability of the idea - can the business achieve the required level of profitability
• The plan provides something which can be used to measure actual performance
• A business plan is essential to raising finance from outside providers - particular investors and banks