The business plan is a guide that defines and helps you develop a plan of action on how you propose to do business. Putting your ideas and concepts on paper is invaluable because it forces you to explore every aspect of the business at once. It makes the business owner drill down into the goals of the business and how you will achieve them. It is your roadmap to where you are taking your business. Think about it, without carefully planning, it is like setting off on a journey to an unfamiliar destination without a roadmap – you may manage to make it to your destination eventually (but trust me), you will get lost along the way.
Why the business plan:
Clarifies the Business Purpose – Clarifying the purpose of your business allows you to comprehend what needs to be completed to move the business forward. You will be able to better understand your business and construct a course of action to manage the business more efficiently.
Managing Cash Flow – It is a known fact that businesses fail because they become insolvent. Insolvent is when a business is unable to pay their debt. Often time, this is not a result of the company being unprofitable but the mismanagement of their funding.
Future Vision – Businesses continue to develop and adapt over time, so it is important to factor future growth and direction into the business plan. In projecting future growth, you will want to research how changes in the market, growing or slowing trends and any new innovations will affect your business.
Business Financing – If you are seeking funding for your business the business plan will give the new business a better chance of attracting investors to provide the capital needed for getting started. A comprehensive business plan will convey whether the business has the probability of making a profit. Lenders will require access to your company’s Profit & Loss Statements and Income Statements (this will be discussed in future blogs).
The business plan is probably one of the toughest task you will do when starting your business but it is an essential part of the process. Do not bypass this step, you will not regret developing your plan.
You will be able to discuss and create buy-in of your business like a true professional.
Put the work in upfront and watch your business thrive! Good Luck!
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