One of the most common questions we get when we talk to entrepreneurs is, why do I need a business plan? It surprises us how many times we get asked this, as we see a business plan as a critical part of not only a business start up, but also its a critical tool for developing any businesses.
Having a realistic well developed business plan dramatically increases your chance of having a successful business start up, and starting a business without it is definitely not recommended. Navigating your business on a day to day, week to week timeline is difficult enough. much of the time you depend on your experience and your instincts to make decisions. A business plan brings a more holistic view to your business, from a strategic and financial perspective.
If you are seeking finance for your business start up, the source that you have approached, be it the bank or a private investor is going to ask for this document, and therefore it must be up to scratch. The benefits of having a business plan are as follows:
– A business plan puts a value on your new business.
– Your business plan will help you manage risk in your business.
– A business plan helps you manage the operational burden of the business.
– A business plan realizes your competitive position within the marketplace you will be active in.
– A business plan helps you define your target market and can compliment your marketing plan.
– A business plan will guide your potential investors to make a decision in your favor.
– This document will determine whether your business can survive in the market you want to trade in.
– The plan will put a figure on start up costs, and will ultimately determine whether you can go ahead with your business start up.