10 Reasons You Need A Business Plan. One of the most vital things you can do for your business is to have a plan. Even the smallest business can benefit from writing up a business plan. The following points can help you understand more on the importance of a business plan.
1. Create A New Business
Use a plan to establish the right steps to starting a new business, including what you need to do, what resources will be required, and what you expect to happen.
2. Grow Your Existing Business
A business plan can help establish strategy and allocate resources according to strategic priority. If you want to grow your to grow your business a business plan is your best friend.
3. To Raise Capital
Potential investors or lenders want a written business plan before they give you money. A mere description of your business concept is not enough. Instead, ensure you have a thorough business and financial plan that demonstrates the likelihood of success and how much you will need for your business to take off.
4. Clarify Direction
The primary purpose of a business plan is to define what the business is or what it intends to be over time. Clarifying the purpose and direction of your business allows you to understand what needs to be done for forward movement.
5. Manage Your Business
A business plan conveys the organizational structure of your business, including titles of directors or officers and their individual duties. It also acts as a management tool that can be referred to regularly to ensure the business is on course with meeting goals, sales targets or operational milestones.
6. To Make Sound Decisions
As an entrepreneur, having a business plan helps you to define and focus on your business ideas and business strategies. You not only concentrate on financial matters, but also on management issues, human resource planning, technology and creating value for your customer.
7. To Identify Potential Weaknesses
Having a business plan helps you to identify potential pitfalls in your idea. You can also share the plan with others who can give you their opinions and advice. Identify experts and professionals who are at a position to give you invaluable advice, and share your plan with them.
8. To Attract Stakeholders
A business plan is a communication tool that you can use to secure investment capital from financial institutions or lenders. It can also be used to convince people to work for your enterprise, to secure credit from suppliers, and to attract potential customers.
9. Hire New People
This is another new obligation (a fixed cost) that increases your risk. How will new people help your business grow and prosper? What exactly are they supposed to be doing? The rationale for hiring should be in your business plan.
10. Future Vision
Businesses evolve and adapt over time. A business plan can be an effective way to plan for changes in the market, growing or slowing trends, and new innovations or directions to take as the company grows. Although clarifying direction in the business plan lets you know where you’re starting, future vision allows you to have goals to reach for.