Starting a business is tricky especially if you’re a first time entrepreneur. There are so many aspects that need to be discussed and planned in order for your business to be a successful venture. To ensure that your business stays steady and productive you need to first lay out a business plan. A business plan is a document of approx. 15-20 pages which entails each and every aspect of your business.
Information about your product, your business strategies, finances, long term goals, objectives, everything is included in this business plan. Wether to aim to start a website helping people study like Peachy Essay or an app, you definitely need to plan beforehand.
Think of the plan as a road map for you. It will help you with directions if you feel lost and you won’t have to circle back to square one if things get a bit difficult business wise. Studies have shown that owners with business plans showed 30% faster growth than those who didn’t. All the highly successful and fast-growing businesses out there have well thought out business plans.
Why is a Business Plan Important?
A business plan is important because it gives businesses a goal and you can track your progress as your business grows. You can stay on the path of achieving your objectives with determination and if ever you need a refresher, you can go through the plan to get back to your original goal. Business plans are also important from an investor’s point of view. If you have a clear and detailed plan written before, it will attract the right kind of sponsors and make it easy for them to decide wether your business is worth the money and time.
Business plans are divided into multiple sections like;
- Marketing strategies: Research about marketing your product and gather information to figure out factors that will affect your business.
- Cash flow: Keeping track of all the money that will go in and out of your business is imperative to maintain your budget.
- Analysis of your competitors: Knowing the strengths and weaknesses of your contemporaries will help in keeping updated about the strengths and weaknesses of your own business
- Plan for logistics: Make your production process as efficient as you can by planning out the logistics and operations of your business
- Division of customers: knowing your target audience will improve your business and your marketing strategies.
So Why Make a Business Plan?
You must be thinking that making a plan is a lot of hard work and you can just go without it. But study about successful entrepreneurs and you’ll find out that laying out a business plan is actually the first step to success. Many successful entrepreneurs have compared business plans to a map; if you go without one you are highly likely to get lost. It may sound like a boring and time-consuming task but it will eventually set your business up for success.
To make the task of writing a business plan easy for you, following are some points of why you need a business plan:
To avoid big blunders
To make your business grow, you need to learn some points regarding your marketing, competition, cash flow etc to keep track of your progress. Knowing your audience will help in keeping your marketing strategies relevant and analysing the strengths and weaknesses of your competitors will also make you more productive. The most important aspect if keeping track of the cash that flows in or out of your business. Half of the businesses fail because they run out of money or their team is not competent enough to handle the stress of a new business.
Making sure your business is practical
Majority of business are actually started as an act of passion and while passion is quite motivating, it is not enough to make a business successful and grow. Turning that midnight idea bulb into a thriving business venture will need hard work on your part. Writing out a business plan will help you turn that vision to reality by becoming practical. This is the most important step between the concept and reality of starting a business. The second most important part is researching about the market. Knowing the industry, competitors and audience before you start your business can help you figure out how to make your business successful. It will provide a clear path of what you need to do to be productive.
To set goals and objectives
When you have your goals and objectives well thought and written, you can achieve them in a better position. They will also help you with your long term strategies and gain some insight on whether your objectives and strategies are helping in your business or not and what your next step should be.
To attract investors
Having a written business plan can help you be funded 2x faster than if you don’t have a business plan. This is because any investor that is about to put his hard earned money in your business needs to know first if your business is worth it. It is basically a requirement if you’re looking for investors or even if you’re pitching for funds from banks or capitalists. Knowing the tiniest details and goals of your business before will help you stay true to your vision and help secure financial support easily.
To decrease risk
Starting any sort of venture for a first time entrepreneur is a daunting and intimidating task. This risk will become more and more when your business starts to grow and if you’re just winging it without a written plan of business it will be hard to keep your business aspect clean and clear. Having this plan will allow you to leave less to chance and fate and if you ever need directions or are stuck, going through the plan can help you move away from the problem and becoming a better entrepreneur. This way you can sit back and thoroughly enjoy and grow your company with better goals.