A well-written business plan is an important tool because it gives your company as well as your employees, the ability to lay out goals and track progress as the company begins to grow.
Business planning should be the first thing done when starting a new business. Business plans are also important for attracting investors so they can determine if your business is on the right path and worth putting money into.
Here are six reasons having a business plan is important for your company:
It will help you set achievable goals and milestones
Every good business plan outlines SMART goals and milestones. SMART goals are: Specific, Measurable, Achievable, Relevant and Time-based.
If you create a business plan but skip attaching any goals or milestones to it, it’s a lot less useful. If you set goals and milestones for your company and your team that aren’t aligned with the strategy you articulated in your business plan, you’re going to have a hard time aligning your team around the same priorities.
Use your business plan to set high-level milestones. Then use those milestones to create meaningful goals, and guide your sales and marketing strategies.
To prove the viability of the business
Many businesses are created out of passion, and while passion can be a great motivator, it’s not a great proof point.
Planning out exactly how you’re going to turn that vision into a successful business is perhaps the most important step between concept and reality. Business plans can help you confirm that your grand idea makes sound business sense.
A critical component of your business plan is the market research section. Market research can offer deep insight into your customers, your competitors, and your chosen industry. Not only can it enlighten entrepreneurs who are starting up a new business, but it can also better inform existing businesses on activities like marketing, advertising, and releasing new products or services.
To better understand the broader landscape
Writing a business plan can go a long way in helping you better understand your competition and the market you’re operating in more broadly, illuminate consumer trends and preferences, potential disruptions and other insights that aren’t always plainly visible.
To secure financing
Did you know you’re 2.5x more likely to get funded if you have a business plan? If you’re planning on pitching to venture capitalists, borrowing from a bank, or are considering selling your company in the future, you’re likely going to need a business plan. After all, anyone that’s interested in putting money into your company is going to want to know it’s in good hands and that it’s viable in the long run. Business plans are the most effective ways of proving that and are typically a requirement for anyone seeking outside financing.
To help you with critical decision
The primary importance of a business plan is that they help you make better decisions. Entrepreneurship is often an endless exercise in decision making and crisis management. Sitting down and considering all the ramifications of any given decision is a luxury that small businesses can’t always afford.
Building a business plan allows you to determine the answer to some of the most critical business decisions ahead of time
To reduce risk
Entrepreneurship is a risky business, but that risk becomes significantly more manageable once tested against a well-crafted business plan. Drawing up revenue and expense projections, devising logistics and operational plans, and understanding the market and competitive landscape can all help reduce the risk factor from an inherently precarious way to make a living.
Having a business plan allows you to leave less up to chance, make better decisions, and enjoy the clearest possible view of the future of your company.
At Espact we develop well written business plan for existing businesses, startup business, companies etc to help your business and company get the necessary funding and also generate more profit to your business.
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