Why Do I Want A Business Plan Anyway?
For the aspiring entrepreneur(s), a business plan allows him to set his business in black-and-white, to allow him to clearly articulate his goals, and ideas, and to test their viability.
Writing a business plan requires a considerable amount of time and effort, which could be well directed towards more productive uses like actually building the business. And according to researches that show small businesses successes has no correlation with whether a detailed business plan is written or not, then why write one?
Financing Your Business
Should your start-up require some loan of sort, having a well written business plan would secure you a better chance of obtaining your loan.
The plan should outline your profit forecast, and the expected/estimated rate of return from your venture. After all, no one is going to foolishly toss away good money because you asked them to.
A business plan then, is basically how you can convince your potential lenders (by means of research and ideas) to loan you the cash necessary to kick start your business.
Who Will Look At My Plan For Business?
Loaners, which are commonly banks
Government agencies, which require a plan before they help you by providing financial aid
They want to be convinced that the cash they loan you are able to benefit them. For investors, they may want to see return on the amount invested with you, and loaners are generally more concerned if you are able to return the loan that they have loaned you. Think of the business plan as a means of persuading them. A well written proposal is undoubtedly going to be more impressive and convincing than one without substantial research.
Is Your Idea Feasible?
There is always that “great idea which will never fail”. We would like to think that, and certainly, such enthusiasm is admirable. But have you done the basic market research? How many people are out there, wanting your goods or service? Do not make the silly assumption that people simply just want it because you created it. Back your assertion with evidence.
Finding out that there is no demand is certainly less damaging to your pocket than blindly rushing in with almost everything prepared, only to find out no one wants your goods or service.
Note that there is a distinct difference from a “detailed business plan” and a rough, working draft of it. You can do without a detailed plan and have with you a working draft, but you still need the general outline of how your business operates.
What are your goals? What do you need to achieve with your business for you to consider it a success? If you do not clearly define your goals, then you may find yourself lost in the middle. Which direction to take your business in? Are you satisfied?
Goals. They are important, if only to measure how close are you to attaining your purpose of setting out to build a business. Maybe you would like to have more income, or maybe you would like more time for your family. Write them down so you know how to sructure your business to met those objectives.
A business plan changes; sometimes you realised the goals are not realistic. Scale your business plan as your business changes.
If you are convinced on the importance of writing a business plan but do not know how to, then feel free to read on What To Write In My Business Plan?