Why you need a business plan – and four ways it will help you
Need a business plan? Find out why you need to create one, and four ways it can help you with a more successful launch.
If you’re thinking of starting a business, there’s one thing you absolutely need, and that is a plan. As Benjamin Franklin once said, “If you fail to plan, you are planning to fail.” And that is never more true than when launching a business.
A business plan will help to ensure you have considered all the essential parts of creating a business, and have strategies to implement them. It helps you to set clear goals and consider what you will need to do to start making progress towards them.
Why create a business plan?
We’ve briefly touched on why business plans are important. Here are three key reasons why you should create one when starting out:
- To generate an effective concept for growth
- To identify future financial requirements
- To appeal to clients
How to start writing your business plan
In theory you don’t need any specific tools to create a business plan. If you have sheet of paper and pen, or a laptop you can start writing your business plan now. But you will need to know what sections your business plan needs to cover.
You can always search for articles that walk you through the process, buy most entrepreneurs use some kind of tool to write their business plan to save time and stress. You can even use a business plan maker professional if you want to make the process as smooth as possible.
When starting your business plan you’ll need two important pieces of information:
- A clear idea of your ideal customer or audience
- What you want them to do
Four ways a business plan will help you
There are many ways a business plan will help you to launch a more successful business. Here are four of the most important.
1) Working out your finances
Most entrepreneurs find this the hardest part of a plan to fill in – but it’s also one of the most essential. As much as we don’t like to think about money or work our how much we make make or what our expenses may be, without considering your financial forecast there’s a very real risk you’ll launch a business that will never be financially viable.
2) Making smarter decisions
When launching a business, it’s vital that you make wise decisions – and a wise decision is an informed one. Guessing or relying on luck is a pretty poor business strategy, and not one we recommend! The research, forecasting and goal setting you’ll do when creating your business plan will mean that any decisions you make will be based on solid knowledge, and are more likely to be smart ones as a result.
3) Identifying weaknesses
When launching a business we tend to be blindly optimistic. We assume that our idea is unique or brilliant and that people will flock to it once we launch. But this very rarely happens. Instead you need a clear plan. A business plan won’t just help you make that plan, but it will show you where any weaknesses in your thinking are and allow you to correct them.
4) Getting the funding you need
And finally, if you need funding to launch or grow your business then a business plan isn’t just a nice to have – it’s essential. No investor or lender will consider parting with money without a well through out, properly drafted business plan. So if you want someone to give you cash for your business, you need to start planning!