December 24, 2021
Do you really need a Business Plan? Is it worth the investment of time and resources? Can’t you just wing it and skip the whole planning process?
Good questions. Here’s everything you need to know.
For people who have a Business or are just starting out, there's a lot of importance to a business plan. It is a road map, an outline, a document that explains what your business is, what the goals of the business are, and how exactly it will set about achieving those goals.
Here are 10 reasons why we believe you need a business plan:
- A formal business plan is necessary to show all stakeholders — employees, investors, partners and yourself — that you are committed to building the business. Creating your plan forces you to think through and select the strategies that will propel your growth.
- Clarity of business milestones - The business plan should clearly lay out the short-term & long-term milestones that are most important to the success of your business.
- It will help you steer your business as you start and grow. - Think of a business plan as a GPS to get your business going. A good business plan guides you through each stage of starting and managing your business. You’ll use your business plan like a GPS for how to structure, run, and grow your new business.
- Understand your customer. Where are they? How do I reach them? What proportion of the customers am I planning to sell? Why do they buy from Me? When would they buy? And understanding your customers will not only allow you to create better products and services for them but will allow you to more cost-effectively promotion plan with measurable MROI.
- Define your revenue model - How exactly will your business make money? Documenting the revenue model helps to address challenges and assumptions associated with the model.
- To determine your financial needs - One of the key purposes of a business plan is to help you determine exactly how much capital you need and what will you use it for. This process is essential for raising capital for business and for effectively employing the capital. It also enables you to plan ahead, particularly if you need to raise additional funding in the future.
- A robust business plan will help you to attract and retain top quality talent. A good business plan will inspire employees and management that the idea is sound and that the business is poised to achieve its strategic goals. So, getting them aligned and motivated will be key to your success.
- Pivot Your Business - During difficult economic conditions, if your current sales and operational models aren’t working, you could look at opportunities previously unaddressed and pivot your direction towards them.
- To uncover new opportunities - Through the process of brainstorming, you will likely see your business in a different light. As a result, you will often come up with new ideas for marketing your product/service and running your business. It’s coming up with these ideas and executing them which is often the difference between a business that fails or just survives and one that thrives.
- 10. To reduce the risk of pursuing the wrong opportunity- The process of creating the business plan helps to minimize opportunity costs. Writing the business plan helps you assess the attractiveness of this particular opportunity, versus other opportunities.
There is no right or wrong way to write a business plan. You can pick a plan format that works best for you. What’s important is that your business plan meets your needs.