Get Wiser in 10 Minutes
A business plan is as vital as a blue print to a builder. You would not want to build a house without a decent set of blueprints. Can you imagine the vital parts of the home that could be missed if there were no blueprints? It makes no sense. Just like it makes no sense to build a business without a solid business plan in place.
A business plan is not set in concrete like a blueprint for a home may be. A business plan can grow and evolve as needed. Think of it as a sort of roadmap with possible short cuts and different paths than the original outline. Even though the business plan may change the need to have one is place is great.
The next best thing to actually jumping in and having experience with a business is through the business plan. By having the plan in place you will scan ahead and work out solutions to potential issues that may come up in the future. If you are writing up the business plan and suddenly feel it is unattainable, or just doesn’t jive well, you haven’t lost anything. It is only on paper. You can scratch it off and start over with a different angle or find a different type of business. Writing the business plan is the preliminary view to what may come up ahead.
A business plan will set the business up for success. Because a solid business plan includes the financial end as well as the operational end, it will be easy to see how that will fit together with the projected budget and profit expectations. A business needs supplies, inventory, and marketing and the plan will outline all of these areas. It fits together like a puzzle, and by writing it out on paper potential issues with any of the above can be sorted.
If the business needs startup capital then a loan must be obtained. Most financial institutions will not lend to a potential business unless they have a solid business plan in place. A business plan will help to secure funding which may be vital to new businesses. Sometimes an established business may need to switch gears, so a good solid new business plan is needed in order to gain additional funding and loans on behalf of the business.
A good business plan helps to manage the business later, as the business grows. The plan should include room for growth. The plan helps to make a change in business goals too if needed. The business plan should be reviewed often, adjusting the goals as growth occurs or when changes need to be made.
Lastly, having a solid business plan in place will attract investors, should the business ever need them. Investors often step in and help to bring a business to a new level of growth and development. An investor will want to see the business plan before making a decision about investing a business.