Why should every business have a business plan? Simple: The business plan provides a direction for you and guides your decisions. Without it, you’ll struggle to start and run a successful business. Many people think that a business plan is a piece of document that they put together when first starting out and then forget about it. This isn’t the case. The truth is that a business plan changes over time with the development in the business, and any entity can have multiple business plans depending on its objectives.
When you are starting your business, a business plan will help you raise capital. Once you have developed your company and are planning to sell it, the business plan may include strategies for the transfer of ownership. If you are still not convinced, here are some reasons to create a business plan when you are starting a new business.
Allows You to Test How Feasible Your Business Idea is
Before you start a new business, you must test whether your idea is feasible or not, and a business plan allows you to do just that. When you are writing a business plan, you’ll be able to understand whether your idea is untenable or not. If you find that it won’t prove to be successful, you won’t waste your time and think about another idea. Many business owners are so convinced about their business idea that they don’t carry out the proper research work through a business plan. This is a big mistake that can prove to be very costly in the future. The more you research and find out about your industry, competition, and prospective customer, the greater your likelihood of success will be.
Helps Avoid Major Mistakes
Imagine you worked on an idea for a year and later realized that it was doomed to fail from the beginning. Many founders eventually find that they didn’t set aside enough money to reach their goals, didn’t have a viable strategy to make money, or hired the wrong people. Developing a business plan can help ensure that you are going down the right path.
Helps You Make Important Decisions
When you are writing a business plan, you will find some sections that cannot be completed if you’re on the fence about a certain point. Business plans allow you to eliminate doubt because you are required to write the right information. Making hard decisions is usually one of the most difficult and useful parts of creating a business plan. For example, if you’ve decided on what services you’ll be offering and at what price, you will struggle to complete the services section of the business plan.
Helps You Secure Funding
Most new startups require funding to get their business off the ground. If you don’t have a business plan, it will be extremely difficult for you to acquire funding from banks or angel investors. Established firms also need money for upgrading their equipment, among other things. Having a business plan will give you a better chance of acquiring funds to keep your company operational.
Gives You Direction
A business plan is used as a tool for outlining action items and future activities. It is a living document that outlines where you are and where you intend to be while giving you the directions required to get there.
When you are starting out, there is so much that you don’t know – about your competition, your customers, and even operations. As an entrepreneur, you signed for this uncertainty, but there is a lot that you can do to minimize your risk. Creating a business plan is the ideal way to find out about your weak spots – the gaps, flaws, and assumptions you have made – and work through them to reduce your risk.
May Give You New Ideas
While you are writing a business plan, you may discover new ideas, fresh perspectives, and different approaches. It is a dynamic and flexible tool that will help you think creatively and find solutions to some of your hardest business challenges.
May Help You Control Your Emotions
When you are starting out, you might be passionate about your idea and lose sight of reality. Or, you will be overwhelmed by fear, doubt, and exhaustion. A business plan won’t let your emotions get the best of you, and you’ll look at everything objectively. This way, you will be more likely to succeed in your venture.
May Help You Attract Talent
A well-written business plan is also good for attracting talent. You can hand a plan to a prospect who wants to understand your business, and that plan will give them a detailed overview. Their reaction will tell you how quickly they can think through the key issues of your business. Plus, the written record of everything including your goals and deliverables will send a message that you understand what you are doing and can deliver the results
Helps You Monitor Progress
In your business plan, you will state major operational and marketing milestones. When you are the founder, you must hold yourself accountable for those results. So your plan would allow you to monitor your progress. For example, if a product was to be developed by June 1, and it gets done on June 30, you can ask yourself why. What caused the delays? Why didn’t the team deliver? You can find out what went wrong and ask your team to do better next time.
In a nutshell, writing a business plan is a no-brainer for every business. The plan can serve as a fund-raising tool and can be used for recruiting, operating the business, and finding flaws in your ideas. So, if you are starting a new business, create a business plan and follow it through to achieve your objectives.
Are you interested in putting together a business plan but have no idea where to start? Let us help you! Contact BryteBridge today to speak with a business consultant today. 877-857-9002, or firstname.lastname@example.org