Business Plans: Why you need one for your Business
Let us use a fictitious example of Erick to explain this concept.
Erick has a business idea and he is ready to start his business but he knows very little about the business. All he has is just a business idea for now. He hasn’t done his market analysis, the estimated cost of starting the business and he is oblivious of what market strategies to use, the industry…
In addition, Erick has not written down his business goals and how he aims to achieve them. We can see that Erick needs to do a feasibility study and to have a concise plan of his goals and how he aims to achieve them. One of the ways Erick can do this is by writing a business plan.
Entreprenuer.com defines a business plan is “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 sale and recruiting tool for courting key employees or future investors.”
A business plan has several purposes, one of which includes communicating your business goals in concise terms. Business plans are not limited to business ideas alone. Existing business owners can also write a business plan for their businesses.
Also, it is important to note that a business plan helps to know the profitability of a business and helps the business owner to know how he/she can market his/her business.
With a business plan, there are so many things you will be able to know about the business you want to start. Even while pitching your idea to investors in order to get funds, you need a business plan to show them what you intend to do and what your business is about.
A business plan is not restricted to only being written once, rather a business plan can be updated from time-to-time based on the needs of the business.
A business plan helps in:
- Determining the viability of the intended business.
- Raising the required funds from investors for the intended business.
- Defining the goals and objectives of the business.
- A better understanding of the business.
- Communicating your business idea in a better way to people.
- Clarity of business goals and objectives to the different people such as the stakeholders in your business.
- Estimating cost and expenditure.
- Analyzing existing competition in the market.
- Detailed market analysis.
- Clear cut budget, financial projections, and materials needed for your business.
Finally, If you can’t write a business plan yourself hire a professional to help you write one. Do not run a business without having a business plan.
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