You sit at lunch with a friend, and, suddenly, a brilliant business idea strikes you. You want to talk about it or jot it down on a napkin or on your phone. You do this because it could be the beginning of something life-changing. And, we all know that things can be forgotten or lost if we don’t write them down or secure them. Creating a business plan, before you start, keeps your ideas safe and so much more.
Though we won’t get into every detail of why you need a business plan, I’ve given you some notable points below. I say, don’t leave any stone unturned with your new business plan. This kind of preparation will take you into success and fulfillment faster and more efficiently than “winging it”. So, here we go…5 important reasons you want to create a business plan!
Reasons You Want to Create a Business Plan #1: It Records Your Dreams, Intentions, and Goals
The truth is, if you jump right into a business, even a small one, you can quickly lose sight of your first goals and dreams if they are not in written plan form. I don’t know about you, but I forget things all the time. And, when I go back and read the goals and plans I wrote down, I am amazed at how much information I left behind.
We need guidance along a path that may have some treacherous terrain. That guidance doesn’t necessarily need to come from anyone else but you. After all, it’s your brainchild and dream to start and operate this successful business. Referring to your original intentions can motivate, inspire, and adjust your course to reach the intended destination at any time.
Reasons You Want to Create a Business Plan #2: It Uncovers Weaknesses
One of the primary benefits of creating a business plan prior to start is to flesh out your ideas and predictions. This includes goals, financial forecast, and even who your customers are. This type of planning is wise because it uncovers weak areas and encourages innovation before you even start.
Take marketing as an example. After looking at your original objectives, you realize your original plan may not be worth the investment. You look for other ways to market your new business that allow you to reach ideal customers for less outgoing money.
Reasons You Want to Create a Business Plan #3: It Secures Funding
Part of the business startup process is securing funding or startup capital. Traditionally, bank loans are one of the go-to sources for entrepreneurs. For this, you will definitely need a well-written and researched business plan. However, bank lending has become more difficult over the past decade or so, leaving many excited businesswomen denied. That said, thankfully, there are other resources out there.
Your quality and concise business plan could get the attention of a private investor. Yes, they will want a cut of your business, but 10% to 15% isn’t much to give away for the seed money to ignite your business dream. Understand, investors don’t give away their money without reassurances, and your plan is the key to proving your business will perform for years to come.
Reasons You Want to Create a Business Plan #4: It Outlines Your Sales Process
At the beginning of a business, the main goal is to attract customers or clients. After all, that’s where the money comes from to pay back the bank, your investors, yourself or employees, and all the bills you will incur. Your business plan is the roadmap for this endeavor. It should outline each step and even predict the results. Though you could be way off with this process and forecast, it’s a place to start.
The reason to create a sales process in your business plan is so you know what to do and when to do it. It comes in handy when you hire employees or work with other outside vendors as well. If things don’t go as planned, this outline makes it easier to shift gears or change what’s not working.
Reasons You Want to Create a Business Plan #5: It Offers Perspective
Sometimes, when we have all these grand ideas, in the beginning, we don’t consider the costs to see them through. We can glamourize business ownership to the point we lose sight of reality. Truthfully, starting a business from scratch is tough and it takes a certain amount of grit and motivation. Unfortunately, this positive go-get-em attitude can quickly dwindle when you discover your life is turned upside down.
A business plan gives you a true perspective about what it will take to operate your business successfully. This includes the money, time, and effort you will need to put in on a daily basis. If you write this plan and then realize you are not willing to change your life that much, you have saved yourself some pain in the long run.