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A business plan is a plan that sets out the future strategy and financial development of a business. This plan precisely defines what your business is, its goals, and is the equivalent to a personal resume. The plan usually covers a period of several years to show the progression of a business from startup to profitability.
The use a business plan is of paramount importance in obtaining a
business loan. Without having done the proper research to show that your business can reach profitability, almost all
avenues of business loans will turn you down for a loan. Since the plan provides specific information about your company, and presents this information in an organized manner, including information on how you intend to repay
debt, a good business plan is a crucial part of a loan application.
Furthermore, it also shows that you are serious about your business.