Many people ask themselves “is writing a business plan really necessary?”
The simple answer is yes. Because it gives your business a blueprint for success.
If you were to build a house you wouldn’t build it without a plan. The same is true of starting a business.
However, a business isn’t static. You have to keep building it. Therefore, you need to consider a business plan something you revisit regularly and update based on current circumstances.
Your business plan will develop and change through time just as your business does.
When growing your business having an updated business plan can help you raise capital and get investors on board.
Here are 3 good reasons to write a business plan when starting a new business.
To Test The Feasibility Of The Business
Writing a business plan is the best way to test out whether your business idea is feasible.
Your business plan is your safety net and reveals if your business idea will or will not be profitable. It can save you a lot of time and money down the track.
Often, when doing a business plan a new business idea will be scraped when you analyze the market or the competition. These steps can help you identify the weakness in your current business model and make adjustments to make sure your new business plan is tenable.
Ensure Success
The more research you do the more you’re ensured success. Writing a business plan will ensure you pay attention to all of the small details such as market planning and budgeting for your new business You’ll encounter fewer unforeseen problems. Plus, you’ll define your target market and unique selling proposition early on and be able to layout pricing strategies that make sense for your business from the beginning.
Secure Investment
In order to secure investment from a bank or investors, you’ll need to have a business plan. A well-developed business plan gives investors a reason to think that their investment is worthwhile.
Even established businesses looking for financing need to develop a business plan to detail out the cash flow and sales forecasts for their business.
Download the Free Business Toolkit for free cash flow and sales forecast templates.