A business plan grants you access to the essentials required to move your company from concept to creation. It can either make you or break you. Communicating your message in a succinct and clear manner will allow you to attract the executive team, funding, and overall support required to get your business started. Having a business plan helps:
Define the purpose of your business. Having a purpose provides you with a guide for operating your business. It describes the nature of your business, the products and services you provide or plan to offer; and your target market. With this information, you’ll be able to make better decisions and develop strategies that will bolster the success of your company.
Obtain the necessary funding to support your business. When you present your business plan to potential investors, you’ll have the opportunity to determine whether your business has the potential to be profitable. A detailed plan with facts, statistics, and figures will most likely win over investors than one with a vague purpose and sketchy details. A business plan can also come in handy when applying for a business loan. The majority of lending institutions request this information with your loan application.
Prepare you for the future. As your business grows, there will be significant changes taking place. Not only will you have to focus on the business’ expansion, but also how your business will be impacted by the market conditions and trends at that time. The plan also serves as a snapshot of your business during different phases. The initial draft may consist of your projections for the business over the first three to five years. Such projections may change after your first year based on your business’ performance. These adjustments would provide you with a platform for building your business. You can refer to certain sections of your plan to examine its past history, trends, and statistical changes. With this information, you’ll be able to pinpoint the underlying causes of the ups and downs in your company.
Establish the roles and responsibilities of directors or officers. Your business plan provides information about your company’s organizational structure. This information will help you to keep your business on track in terms of its goals, operational milestones, and sales targets.
Increase others interest in your business. Your business plan can convey your goals without you verbally expressing them. If you have a business meeting with persons who are interested in becoming a partner of your business or applying for an executive level position, your business plan will demonstrate the potential of your business and they’ll eventually become part of your team.
Determine the resources required by your company. Your plan will highlight your company’s financial standing. This will allow you to make purchasing decisions regarding any equipment or supplies required. The decision will be based on the long term use of the said items. If the item in question will be beneficial to the company in the future, purchasing may be the most feasible option rather than leasing.