A business plan is a roadmap and strong strategic tool for small business owners and entrepreneurs. A well-written business plan provides greater clarity on all aspects of your business and helps achieve short-term and long-term objectives. It helps you set clear goals and how you will achieve those goals to grow your business.
You may be worried due to the questions arising in your mind related to the business plan. No worries. In this article, I'll explain what a business plan is, why it is important, and who should write the business plan? Is it worth the investment of time?
Let's dive in and explore it!
What is a Business Plan?
A business plan is a written document that outlines your business goals, objectives, business strategy, and information about your products & services. Moreover, it includes the details of sales, marketing strategy & analysis, finances, and product development. Whether you're a small business owner or want to expand your existing business, a good business plan is essential to growing your business.
Your business plan is the roadmap for how you'll build the company for your dreams. In addition, it is beneficial for startup businesses as they use it to attract investors. Most importantly, small businesses that formulate a business plan before starting a business grow 30% faster than those that don't.
Business Plan Outline
All the great business plans have some common and key elements. Below is the outline to create a robust business plan.
Products & Services
Market Analysis & Competition
Sales and Marketing Strategy
To summarize the importance of the business plan, here are the top six reasons you need a business plan for your small business. Keep reading to learn everything you need to know.
1. A business plan helps your business to grow 30% faster
A business plan is all about predicting your business's future. It can turn ideas into reality. Writing and reviewing the plan regularly will help you track your progress towards your goals. Furthermore, you will be able to identify your problems and challenges. You will prepare and make changes to overcome them ahead of time with a strong business plan.
One of the big reasons the startups fail during their first four years is no planning. Studies proved that businesses who implement a business plan and review it regularly grow 30 % faster. Beyond growth, it provides a valuation for businesses, and they perform better.
2. You will make sound decisions with confident
The primary importance of having a plan is to aid you in making better decisions with confidence. Business involves huge decision-making like when to hire new employees when to make a big purchase, where to locate, what to sell- the list goes on. As a business owner, creating a robust business plan allows you to focus on business ideas and strategies.
You'll think about the significant components of your business, including financial matters, management issues, technology, and marketing strategy. In this way, you'll figure out answers & solutions to these tough questions in advance, and you will be able to make significant spending & critical decisions quickly.
3. Business planning is proven to help you establish achievable goals & milestones
Proper planning helps the business establish short, mid, or long-term goals & milestones. Every well-thought business plan outlines smart objectives and milestones. Therefore, any business plan without goals or plan with goals that are not aligned with your strategy will cause difficulty for you. If you want long-term profitability, use your business plan to set high-level goals that are important for the success of your business. Also, it'll keep you responsible for your long-term vision and business strategy.
4. Having a Business plan reduces your risks
When you're just starting a business, many things are unfamiliar to you about your market competition, operations, revenue & expense. But creating a well-crafted business plan is a great way to uncover your flaws and opportunity to avoid future pitfalls.
When you create a plan & review it regularly, you're aware of many things, you make the best decisions, and it minimizes the risk factor. In addition, you can predict problems as you learn what works and what doesn't, so you can overcome those problems and enjoy the most transparent view of the future of your business.
5. It will help you secure financing & attract investors
Suppose you're asking an adventure capitalist for funding, planning to seek a loan from a bank, or approaching investors and considering selling your business. In that case, you'll need a good business plan because it gives them details of your business, including critical financial statements and the validity of your business.
After all, anyone interested in putting their money into your company wants to know that they're putting money in good hands. New businesses often require funding to operate a business. Therefore, your business plan is essential to show them your business models & financials and encourage them to invest.
6. You're more likely to understand your customers & competition better
Writing a business plan can go a long way in assisting you to understand your customers and competition. You'd have a strong understanding of everything happening daily. When you know your customers more broadly, you'll offer better products & services to them. Also, you can reach them via marketing, advertising & promotions.
On the other hand, it allows you to analyze the competition and understand the competitive advantages of your business. By identifying competition, you can reach your targeted audience where your competitors are not reaching.
Who Should Write a Business Plan?
The best person to write the business plan is You. If you're not involved in its development, you won't know what it contains. And if you don't know what it has, how can you implement the business plan and create a successful business? So, as a business owner or entrepreneur, it is your primary responsibility to write it, but it doesn't mean you cannot get help.
Meanwhile, it's common and wise to have someone's help. Therefore, you can hire a consultant or experts to assist you in preparing the plan. It's great to get help from an expert in your industry or someone familiar with writing business plans, and it'll help point out deficiencies and correct them. But, you need to be directly involved in it and be responsible for the content of the plan. In a nutshell, if you want an effective planning document, I feel strongly that you must take ownership of your business plan for it with someone who can little assist you in this process.
Ready, Set, Plan!
Now, you know why a great business plan is important for your business. It's time to move forward confidently. Writing a business plan is not as complicated as you think, but you'll have to invest time and effort. Create your own business plan and implement it to create a viable business. Also, keep remembering that it will grow and evolve with your business, so it's a significant part of your journey. Be ready and set a plan.
Have you ever made a business plan for your new venture? Let me know your experience in the comments section below.