Are you ready to get down to business? I mean really, really ready? Do you have a business plan?
While writing a formal plan might not be at the very top of a small business owner’s already full to-do list, it could make the difference between succeeding and struggling. According to a study cited in the HBR (Harvard Business Review), entrepreneurs who wrote a plan were more likely to succeed than their non-planning counterparts.
What is a business plan?
Simply put, a business plan is a document that outlines the goals, objectives, and strategies of an organization. It is used to provide information about the company’s direction and how it will meet its goals.
There are many reasons why you should write a business plan. Below we cover the top 5 reasons why a business plan is important.
5 reasons why a business plan is needed
1. To start your business off right
A blueprint does a lot more than help you flesh out where you want to go; it pushes you to determine the best way to get there. Having a clear, carefully written business plan before you break proverbial (or literal) ground can help you stay organized, on task, on schedule, and even help you manage stress during the early days of building a business. By sizing up the competition, mulling over marketing plans, and buckling down on the business budget, you’re not just filling in the blanks, you’re writing yourself a blueprint to business success.
A solid business plan will help you define the benchmarks to measure your overall progress. Most new business owners want to “be successful,” but how do you measure success? A good business plan forces owners to define their goals and choose how they will track and measure their progress. Your goals should change as you grow and should be reviewed regularly. No goal is too big or too small! Your measurable goals might include:
Receiving 10 four- and five-star reviews online for customer service
Increasing your online store traffic by 30 percent by the end of the year
Now and then, even the most driven owner may feel unenthusiastic or exhausted by work. The occasional review of your business plan can reignite the spark you had in the beginning and remind yourself why you’re working so hard. In addition to seeing progress you’ve already made, a business plan can help keep your eyes on the prize, when they might be drifting away.
4. Helps in securing funding for your company
Your set-up may be small for now but if you plan to grow, a business plan can be an essential piece of the puzzle when it comes to securing small business financing. Investors, lenders, and grant makers all want to see your vision and how you’ve built your business before signing that cheque. Sharing a clear, viable plan with financials is a great way to get potential partners as pumped as you are.
No business owner has an infallible crystal ball for telling the future, but a business plan can be a great way to strategize for the future and plan for potential setbacks. Variables like the economy or changing customer tastes may put obstacles in your path, but thinking ahead of time about how you’ll deal with them can save you time and stress later.
While writing a formal plan might not be at the very top of a small business owner’s already full to-do list, it could make the difference between succeeding and struggling. According to a study cited in the HBR (Harvard Business Review), entrepreneurs who wrote a plan were more likely to succeed than their non-planning counterparts.
What is a business plan?
Simply put, a business plan is a document that outlines the goals, objectives, and strategies of an organization. It is used to provide information about the company’s direction and how it will meet its goals.
There are many reasons why you should write a business plan. Below we cover the top 5 reasons why a business plan is important.
5 reasons why a business plan is needed
1. To start your business off right
A blueprint does a lot more than help you flesh out where you want to go; it pushes you to determine the best way to get there. Having a clear, carefully written business plan before you break proverbial (or literal) ground can help you stay organized, on task, on schedule, and even help you manage stress during the early days of building a business. By sizing up the competition, mulling over marketing plans, and buckling down on the business budget, you’re not just filling in the blanks, you’re writing yourself a blueprint to business success.
Read more about creating an effective executive summary for your business plan
2. It provides measurable business goals
A solid business plan will help you define the benchmarks to measure your overall progress. Most new business owners want to “be successful,” but how do you measure success? A good business plan forces owners to define their goals and choose how they will track and measure their progress. Your goals should change as you grow and should be reviewed regularly. No goal is too big or too small! Your measurable goals might include:
3. It keeps you motivated as a business owner
Now and then, even the most driven owner may feel unenthusiastic or exhausted by work. The occasional review of your business plan can reignite the spark you had in the beginning and remind yourself why you’re working so hard. In addition to seeing progress you’ve already made, a business plan can help keep your eyes on the prize, when they might be drifting away.
4. Helps in securing funding for your company
Your set-up may be small for now but if you plan to grow, a business plan can be an essential piece of the puzzle when it comes to securing small business financing. Investors, lenders, and grant makers all want to see your vision and how you’ve built your business before signing that cheque. Sharing a clear, viable plan with financials is a great way to get potential partners as pumped as you are.
Read more about the difference between a grant and loan
5. Creates a contingency plan