20 Reasons Why You Should Be Writing A Business Plan
Writing a business plan is vital to your company’s success because it clearly lays out everything there is to know about your business.
By having a comprehensive business plan you can predict your future profits and show investors that you’re serious.
A complete business plan will include these 8 components:
- Executive Summary
- Company Analysis
- Industry Analysis
- Customer Analysis
- Competitive Analysis
- Marketing Plan
- Operations Plan
- Management Team
Here are the top 20 reasons why writing a business plan is so imperative.
Writing a business plan shows investors, partners, and even yourself that you’re serious and committed to building the company.
2. Establish Your Goals
Your business plan should lay out every milestone that’s imperative to the success of your business. It’s important to realize when you’re coming up on one of the major goals that’ll bring your company to the next level.
3. Scale Up Your Competition
By writing a business plan you’ll be able to better understand your competition and the competitive advantages they may have over you.
4. Get To Know Your Customer
Make sure your business plan includes an in-depth analysis of your customer so you understand why they buy when they do; this is essential to having a successful business.
5. Find and Analyze Hidden Assumptions
Through the process of writing a business plan you’ll be able to find any unstated assumptions you have. By discovering them you’ll be able to test them and see if they have any validity.
6. Assess Your Probability of Success
By creating a detailed business plan you’ll be able to analyze your target market and the competition in order to determine how much success you should anticipate.
7. Determine Your Revenue Model
It’s imperative to show potential investors how your business will make money. By documenting it in your business plan you’ll be able to determine and evaluate any challenges that may come up.
8. Define Your Financials
Your business plan should have a detailed financial plan so you’ll be able to determine if you need to raise additional capital and if so what you will use it for.
9. Entice Potential Investors
When you approach someone to invest in your company I can guarantee they will ask to see your business plan. This will give a potential investor all the answers they need about your company like the financial projections and your exit strategy.
10. Assess the Opportunity
By taking the time to write the business plan and put pen to paper on everything it will take to become successful you’ll be able to assess whether this is the right opportunity for you or not.
11. Know the Marketplace
You’ll need to research your target market in order to complete your business plan which will ensure you are aware of trends and threats in your industry. Researching these variables will aid you in having a complete understanding of your marketplace.
12. Appeal to Potential Employees
A finished business plan will motivate employees because it will affirm their confidence in the company and your plan. This will help you to attract and keep top quality team members who care about the mission.
13. Create a Roadmap
Writing a business plan will lay out your long term goals which will keep you on track when you’re in doubt of what decision to make. This will keep you from changing your short term strategies and veering off course.
14. Appeal to Potential Partners
A potential partner will be more likely to want to work with you if you have a comprehensive business plan they can read in order to learn about your company and where you’re headed long term.
15. Define Your Brand
You’ll be able to accurately describe your business and brand to customers, investors, and partners if you have an all-inclusive business plan that helps you to define your company in the marketplace.
16. Gauge Your Success
Since your business plan has all your milestones clearly marked you’ll be able to use it to compare your actual real life results and therefore help you gauge how much success you’ve had so far.
17. Adjust To a Changing Market
When the economy is down you shouldn’t expect to reach the goals you set in your business plan when it was up. The changing conditions of the marketplace will help you to come up with new ideas and projections for your company’s future.
18. Develop a Marketing Plan
A detailed marketing plan is vital to your company’s growth. You’ll need your business plan to clearly lay out your plans for reaching your customers, how to retain them once you’ve reeled them in, and how much you’ll spend doing all of it.
19. Predict Your Staffing Needs
When your business plan clearly lays out your expectations for growth it will be much easier for you to determine at what stage you’ll need more employees. This will keep you from becoming shorthanded when you’re growing rapidly.
20. Discover New Opportunities
You’ll probably have a different view of your company when you’re done with your business plan compared to when you started. Through the process of writing a business plan you’ll come up with new ideas that will help your long term success.
Now that you realize why writing a business plan is so important it’s time to start writing yours. For help with this seemingly daunting task check out our 8 steps to a winning business plan.