A Business Plan helps you to determine if your business is likely to be viable, and focuses your efforts to improve your chances of success by identifying primarily, the strengths, weaknesses, and probable outcome of your business venture. It also provides a road map for your business: accommodating ways for you to make detours, change directions, and alter the pace that you set at the outset.
It’s a “living” document that grows with you. It can be adapted and amended as your goals and circumstances change.
Here are the top reasons why creating a Business Plan is the best thing a business owner can do:
- It assists in obtaining financing. Whether you are starting up a small business or are an established entrepreneur, banks and other financial institutions want to see that you know where you are, where you are going, and how you are going to get there. This is in addition to ensuring that your budget and cash-flow targets are realistic. The plan will tell you (and them) how much money you need, when you will need it, and how you are going to get it.
- It helps you clearly think through what type of business you are starting and allows you to consider every aspect of that business including identifying who your customers are, and how your products and services are uniquely suited to them.
- It raises the questions that you need to have answered in order to succeed in your business such as: how you will structure your operations, what skills you will need, how you will approach your marketing, and how you will manage your income, etc.
- It establishes a system of checks and balances so that you avoid mistakes.
- It sets up benchmarks or targets to keep your business under control.
- It helps you develop competitive spirit to make you keenly prepared and ready to operate.
- It makes you think through the entire business process so that you do not open the business blindly on day 1, or lack the vital information you need to maintain your business long-term.
- It forces you to analyze competition.
- In the end, it will give you a “GO” or “NO GO” answer about starting the business.