Starting a business without a plan is the same thing as going on a journey without any sense of where you’re going. For most entrepreneurs, a business plan is a piece of document that needs to exist only for the purpose of presenting the business idea to venture capitalists and investors. In fact, even just one page of future financial projections for your business means that you have in your hands a valuable information that you can use to pitch your startup value. Business plan represents a well-written document that describes your business, its objectives, and strategies, as well as the market that you’re targeting and your financial forecast. Your business plan is the roadmap for growth from the early-stage idea to a big company. Good planning before you actually plunge into the market will help you focus more on the business operations, will set the tone of the business and give you bigger chances for success. So in this blog post we want to give you 7 good reasons why you must have a business plan before the start of your venture, even if you don’t plan to pitch to investors and banks yet:
1. The Business Plan Can Map Your Growth
You started the process of being your own boss. And you want to know what you’re going to do and point your business in the right direction. Your business plan will serve you as a compass. It will keep you focused on your goals and execute them with excellence. As a first-time entrepreneur, just like a lone survivor in the wilderness, an outlined business plan will work just like a compass and map out your growth.
Mapping your growth as a company with a business plan means game plan development. The best time for analysis, scoping competitors, identifying opportunities, comprehending your future capital, and developing a sturdy strategy is upfront. With this, you can organize your company and focus on refining your business model while convert leads into clients.
2. Entrepreneurs get Market Insights
Insights into your target market is something that we already discussed on our blog and we will keep doing so until every entrepreneur understands how vital the market data is. A prior market research that is included in your business plan will show investors that you’ve deeply understood your target industry before entering in it. This also shows that you know how your business will fit in the market and the probability of success. Market insights are essential if you want to minimize the risk of running and pitching your business to investors.
3. Business Plan Helps Entrepreneurs Stay on Track
Good organization is necessary from the very beginning of the business planning process. Having a business plan helps you stay organized and keeps you on the right path to success. And good organization is one of the keys that will help you to successfully operate your business. A company without a plan can easily shift into the wrong direction. As a result of that shift, you’ll lose revenue and by the time you get back on track, the competition with a thorough business plan is way ahead of you, even the ones that started years after you.
4. A Business Plan Helps You Determine the purpose
Even though the primary purpose of a business plan is to showcase your idea to investors and potential stakeholders how you plan to make a profit, it’s not the only thing that matters in a business. A good business plan will also show the reason your employees will want to get up in the morning and come to the office. So as a first-time entrepreneur, take some time to determine the core values of your future company, and include them into your strategy for success.
5. Financial projections
Figuring out the financial statements is one of the main challenges when it comes to business planning. Financial projections are just a way to predict the growth of your business. It helps you in budget preparation and set the financial goals. The whole purpose of including financial projections into your business plan is to predict what the business is capable of when it comes to revenue and profit, including assumptions made on potential costs, market size, pricing, marketing conditions etc.
6. The Business plan keeps your Team aligned
Having a business plan is one of the best ways to make sure that everyone who’s on board stays aligned with the current and future business plan. This is very important, especially for startups that are in their early stage because everyone needs to be on the same page in terms of working together and growing the business together in the process. Putting everything on paper first is the right way to start.
7. Business plan provides Self-Awareness to Entrepreneurs
The business plan is a great way for first-time entrepreneurs to help them declare their vision and plan for their company. Having the business plan in your hands will force you to think and develop your strategy even further. Also, the business plan will serve you as a guideline to track your progress and hold yourself as a CEO more accountable about your future steps.
Having a business plan is important because it will help you set realistic goals for your startup, it will serve as an excellent tool to secure investor funding and to establish the financial forecasts for your business and ROI (Return on Investment). To be considered as a strong candidate for receiving investment funds, you must prove that you thoroughly understand every aspect of your business and that you know how to create profit from it. As a first-time entrepreneur that has a great new idea, we advise you to not jump into business waters without a plan. There are important questions that need to be answered first before you even start the company. The BizzBee team of experts is here for you to help you answer all those questions and guide you through the process of successful business planning.