So, you've decided that you have what it takes to start your own business. Are you wondering what you should do first? Don't worry, you're not alone. Most soon-to-be business owners ask this exact question. The task that should find itself at the top of your to-do list is writing a business plan.
Why is writing a business plan so important? For starters, a business plan serves as a guide, outlining how you intend to move your business from concept to reality. It helps define your objectives and how you plan to achieve them. But, beyond the basic outline that it provides, a well thought out business plan contributes to the overall success of your business.
- A business plan forces you to consider every detail of your business venture.
As you work through the nitty gritty of your plan, you may come across issues that you had not considered or overlooked during the conceptualization stage. Dealing with a problem before it occurs saves time, money and future aggravation. While most missed details can be fixed, there is always the possibility that you might find some error so large that it would prove fatal to your venture. Wouldn't you like to know this before you invest any more time or money?
- A business plan serves as a resume when trying to secure outside funding.
Banks and investors need cold hard facts to aid in their decision process. Having a written business plan is absolutely necessary to secure funding and/or appeal to investors. No legitimate financial institution would consider granting a loan to a business that does not have a well thought-out plan nor would any wise investor accept a proposal that has no specifics to back it up. Make sure that you have done your research and that the numbers you have calculated for startup costs are accurate.
- A written business plan can serve as a management tool for your company.
Running a business is a huge undertaking. It's easy to lose focus at times and give too much attention to things that do not contribute to your desired ends. Having a clear business plan reminds you and your employees of your established goals and what you must do to achieve these goals. Your business plan will provide basic structure to the business and guide daily operations.
Underestimating the value of a business plan can be detrimental to the development of a thriving business. It is a useful tool that will keep you focused on your goals from the very beginning. It serves as a guide to assist you through the startup phase and continues to provide direction once your business has been established. Time spent writing a business plan is always time well spent.