Preparing a business plan before a business venture is taken up is vital for the success of any business. It is one of the key factors that can provide you the assurance that the business will progress on solid grounds and maximize your profits. Behind every successful business, there is a well-thought-out and detailed business plan, which indicates how your business will move through different phases and bring you to the place where you want it to reach.
Imagine you are running a business and you have a good accountant by your side. You decide upon a strategy and discuss with him the way you will conduct the business say in the next five years. Your accountant translates your ideas and strategy into financial figures based upon a certain set of business assumptions. The result is five years of projected financial statements including projected income statements, statements of financial position, cash flows, budgets and trading forecasts broken down by months.