A business plan is a cornerstone of starting a business as well as a significant tool for monitoring the progress and growth of your company. Below are 10 key reasons why you should have a business plan.
1. To Attract Investors. Before investors can decide whether or not to back your business financially, they will need to know as much as possible about how the business will operate and how their investment will be spent.
2. To See If Your Business Ideas Will Work. By writing a business plan and outlining each aspect of your business, you can determine if your idea is actually viable.
3. To Outline Each Area of the Business. A business plan will provide an overview of all aspects of the business. You will be able to detail the who, what, where, when, and why of your day-to-day business operations, costs, and projected profitability.
4. To Set Up Milestones. By forecasting where your business will be in six months, one year, or five years, you are not only letting potential investors know your plans but also setting up realistic milestones for yourself and your employees.
5. To Learn About the Market. Researching, analyzing, and writing about the market not only provides you with an overview of the business plan but gives you greater insight into the overall market.
6. To Secure Additional Funding or Loans. Your business plan can demonstrate that you have met goals and illustrate the company’s growth and need for additional funding.
7. To Determine Your Financial Needs. The process of writing your business plan will force you to analyze your financial picture.
8. To Attract Top-Level People. Your business plan will give talented people an overview of your business.
9. To Monitor Your Business. A business plan should serve as an ongoing business tool that you can use to monitor your progress.
10. To Devise Contingency Plans. While business plans often include some contingency plans, by virtue of having the document available, you can see how and where you can make such changes relatively quickly if, and when, necessary.