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A business plan is a written document that explains in detail how a business (usually a startup) defines its objectives and outlines its goals, and how the business plans to achieve those goals over the next three or more years. Primarily, your business plan should convince you that your idea makes sense before appealing to another, because your time, your money, and your effort are on the line. Therefore, a good business plan should be a blueprint for a successful business. A business plan gives you as a small business owner the best possible chance to succeed in business and reduces the probability that your small business will fail in the long- run. Whether you’re starting a small business or running an existing one, a business plan is important for your business.
Importance Of A Business Plan
Tests the feasibility of your business Idea: Some small business owners jump headlong into a business idea and then fail at some point, because they didn’t plan their businesses. Having a business plan helps you test if your idea is feasible, it also saves you a great deal of money, energy and time. Clarifies your small business goals and strategy: A complete and thoughtful business plan is a valuable tool to clarify your business model, because it contains a comprehensible report of your business mission, vision and the set of values that guide your business. It gives your small business direction and maps out strategies to achieve your goals. Enhances communication: With a clear business plan, you can communicate clearly your business idea, vision and small business essentials. It is insightful to potential investors, lenders, partners, employees, vendors and other stakeholders. Increases organization in your business: Writing a business plan makes you more organized and prepared for the future. In addition, it helps you make better operational decisions and have fewer unforeseen pitfalls and problems.Sign up to the Connect Nigeria daily newsletter
Makes seeking of loan and investment easy: Most financial organizations, investors or venture capitalists will request your business plan before a loan is issued to your business. They want to know that you have a good handle on your small business’s path. Your business plan should make it simple for potential partners and supporters of all kinds to understand your business model and financials. You need a solid business plan that clearly states the amount of capital you will need for startup/expansion and funding of operations. In addition, it must show how your cash flow will allow you to pay it back. Small business lenders and investors will only risk their money if they’re confident that you as a small business owner will be successful, and your business profitable. Gives you control over your business: A well-written business plan is a blueprint for a small business owner to stay on track and remain focused on executing action plans to reach set objectives, within defined timelines. Helps you make big decisions with confidence: As your business grows, you will be faced with making some critical decisions like when to hire new employees, when to expand to a new location, or whether you can afford a major purchase. These are major decisions, however, with a good business plan, you’re going to have better information to use to make your decisions.
It’s A Solid Foundation For Business Growth
Your business plan is a great place to map how your sales and revenue goals fit with your expense budget. It also helps you set business goals and achieve them as well. In addition, a business plan makes it easier to get everyone on your team on the same page. Every small and medium scale business owner should have a detailed and comprehensive business plan, because it is the key to attracting others to your business. Your business cannot grow if you don’t make sales and attract customers, however, these customers cannot be drawn to a business they do not know about, which is why it is vital you have a business plan. Featured Image Source: Inc. MagazineGot a suggestion? Contact us: editor@connectnigeria.com