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Do I need a business plan?

Business planning is vital to help you manage your business more effectively. By committing your thoughts to a plan, you can understand your business better and also chart specific courses of action that need to be taken to improve your business. A plan can also detail alternative future scenarios, set specific objectives and goals, and list the resources required to achieve these goals. In short, it can help ensure that you are prepared for all sorts of eventualities.

It’s a tool for understanding how your business is put together. You can use it to monitor progress, hold yourself accountable and control the business’s fate. And of course, it’s a sales and recruiting tool for courting key employees or future investors. Before writing a business plan, it is important to consider two important factors-

  • Who will the reader be? For example, If you are interested in raising capital, it is very likely that investors will be your target audience. If you are interested in partnerships or joint ventures, your potential business partners will be your audience.
  • What do you want their response to be? Depending on your target audience, focus on the key message you want them to receive in order to get the response you want.

You’ll use the plan for so much more-for managing yourself, for operating the business and for recruiting. Before deciding to skip your planning phase, consider all the implications and what they mean for your future success.

1. To raise money for your business

Potential investors or lenders want a written business plan before they give you money. A mere description of your business concept is not enough. Instead, ensure you have a thorough business and financial plan that demonstrates the likelihood of success and how much you will need for your business to take off.

2. To make sound decisions

As an entrepreneur, having a business plan helps you to define and focus on your business ideas and business strategies. You not only concentrate on financial matters, but also on management issues, human resource planning, technology and creating value for your customer.

3. To help you identify potential weaknesses

Having a business plan helps you to identify potential pitfalls in your idea. You can also share the plan with others who can give you their opinions and advice. Identify experts and professionals who are at a position to give you invaluable advice, and share your plan with them.

4. To communicate your ideas with stakeholders

A business plan is a communication tool that you can use to secure investment capital from financial institutions or lenders. It can also be used to convince people to work for your enterprise, to secure credit from suppliers, and to attract potential customers.

Creating a business plan involves a lot of thought. You need to consider what you want to do, and use that as a starting point. It doesn’t need to be complicated. At its core, your plan should identify where you are now, where you want your business to go, and how you will get there.

Business planning is an essential activity, regardless of the stage of business you’re at. The very process of producing a business plan enables management to give due consideration to the various factors that mesh together to create the opportunity they are seeking to explore, as well as the resources required and the key drivers needed for success.

 

“BY FAILING TO PREPARE, YOU ARE PREPARING TO FAIL”

– BENJAMIN FRANKLIN

 

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