Business owners and prospective business owners keep wondering, why write a Business Plan? Is it necessary? Are there reasons for a business plan and is it important to the success of my business?
A business plan is the bedrock of any business and as such, should be done first. For example, a builder does not just start building, he follows a building process where each step of the process has to be completed before another start. Judiciously following the steps, will ensure that the building will withstand rain and wind.
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In the same vein, a business owner wants a business that will stand the test of time and it is one of the reasons for a business plan. A business plan no doubt takes time and you have to make some sacrifices. It is a road map for your business and when it is not in place, you are likely to lose track.
One of the reasons for a business plan is that it shows people that you are committed to the progress of your business. A Business plan is regarded as key to organizational success.
Below are some of the reasons for a business plan and why it will benefit you in the long run.
See Also: The purposes of writing a business plan
Reasons For A Business Plan
Understanding Of Your Market
Creating a business plan gives you a clear understanding of how to locate and attract customers. When you understand your market and your customers, you will know how best to serve them This also helps you to create a value proposition that your intending customers will consider as value. This understanding gives you an edge over the competition.
Helps In Decision Making
In writing a business plan, you have an understanding of the tasks that need to be performed and the decisions that need to be made. You also have an overview of the timelines for the completion of each task. This way you do not miss out on any important task and you can make a timely decision.
See Also: Step by step guide on creating a business plan in Nigeria.
Access To Financial Opportunities
One of the components of a business plan is the financial projections of the business. Bootstrapping does not come easy for many types of businesses, so they need to raise funds to fund their businesses. In raising funds from financial institutions or investors, they are more interested in how they will get their money back. When you have a well-tailored business plan with the financial projections as we outline in the business plan template, you have better chances of raising capital for your business.
Verbal commitments are not enough when dealing with investors, they want to see digits. Whether you are just starting a business or the business has been in operation, one of the reasons for a business plan is that you need to know how much you need, the expenses, cashflows and future projections.
Helps You Position Your Brand For New Opportunities
With a business plan, the business owner is focused on achieving the set goals for the business. There have been times when a business owner got mouth watery business partnerships simply because someone liked their business plan.
Easy Communication Of Roles
A well-written business plan states clearly all the activities that need to be performed in the company and how they can be performed. It means that even when the business owner is not there, the business can be executed by a management team.
See Also: A business plan sample that can be adapted to your business.
Predicting The Future
We cannot certainly determine the future but we can plan for the future. According to Malcom X “the future belongs to those who prepare for it today”. With a business plan, you know that when you follow a particular path, you are going to arrive at a particular destination.
Understanding Strengths And Weakness
A business plan opens you up to your strengths and weakness as a business. You can then build on your strength and play down your weakness. When you also pay attention, you can identify the strengths and weaknesses of your competitor. One other reason for a business plan is that you can also identify your opportunities and threats in the market you want to venture into.
To Test The Feasibility Of Your Idea
Ideas are a dime a dozen. The most difficult part is the implementation of your business ideas. When you seat and try to craft a business plan for your business, you will know whether the business idea is feasible or not. If it is feasible, then you can go ahead with its implementation, if not, then you know that you don’t need to waste your time on the idea.
Conclusively, there are so many reasons for a business plan, what we have above are just a few of them. A business plan should not be stocked away when prepared but should be reviewed from time to time. Constantly reviewing your business plan helps you know if you are on track. It also helps you know the sections of the business plan that needs updating.
As an entrepreneur, you need to take deliberate steps in starting your business. So you’ve got to write that business plan today and stop procrastinating.
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