5 Reasons You Need A Business Plan
It seems like a lot of startup businesses open their doors without a business plan to provide guidance. Well, that is a huge mistake! A business plan is an absolutely essential part of every single business, especially small businesses. Business plans have been incorporated into all of the Fortune 500 businesses (Hint: Maybe they have something figured out that most others do not). A business plan does not take ages to put together. Normally, business plans can be put together in as little as two weeks, but generally require a month to complete. Of course, depending on how complicated your business model is, this may vary considerably.
Now, if you are considering bringing in investors to fund your startup, your business plan is going to need to be absolutely spelled out in extreme detail (Note: This will be very time consuming). So, if you think you will be opening up your own storefront without any outside investors, you will probably be able to squeak by with just the bare minimum. Big or small, below are some reasons why you need a business plan.
1. Avoiding Mistakes
As you draw up your business plan, you will begin to see your plan unfold right before your eyes. I am almost sure that you have heard the phrase “hindsight is twenty-twenty”. Well, this is pretty much your pre-hindsight. By laying everything out on the table, you are able to see potential pitfalls and act according, or avoid them altogether.
2. Focusing Your Emotions
After you have started your business, you are going to be swarmed with all types of emotions. You encounter excitement, worry, hesitation, doubt, fear, and many other types of emotions. Instead of letting them control you, you can go back and look at your small business plan and let it help guide you and/or calm you down.
3. Clear Line Of Sight
When you are in a marathon, then easiest part of a race is when you see the finish line. Well, with a business plan, you can always see the finish line. Having this will make it easier to focus on where you are and what you will need to do in order to finish as you intended in the first place. If you never have a finish line to focus on, you will probably miss the desired success you were seeking.
4. Strong Goals
In your business plan you set your goals, establish your priorities and outline milestones for performance measurement. You have to determine if there is a “demand” for your products and/or services. You also have to determine how much “demand” for your products and/or service there really is. A proper business plan has many strong goals; goals that will help you focus all of your efforts in an effective and timely manner.
If you need money, you will need investors; and, investors will need to see a fully fleshed out business plan showing them how their "investment" will be used and recouped. If you leave out important details, you may not receive any investor capital and will be forced to use all of your own money or give up completely on your business.