7 Solid Reasons Why First-Time Entrepreneurs Must Have a Business Plan
Starting a business without a plan is the same thing as going on a journey without a sense of where you’re going.
For most entrepreneurs, a business plan is a piece of document that needs to exist only for the purpose of presenting the business idea to venture capitalists and investors. In fact, even just one page of future financial projections for your business means that you have in your hands valuable internal information that you can use to pitch your startup.
A business plan represents a well-written document that describes your business, its objectives, and strategies, as well as the market that you’re targeting and your financial forecast. Your business plan is the road map for growth from the early-stage idea to a big company.
Good planning before you actually plunge into the market will help you focus more on the business operations, will set the tone of the business and give you bigger chances for success.
So in this blog post, we want to give you 10 good reasons why you should have a business plan before the start of your venture, even if you don’t plan to pitch to investors and banks yet:
1. The Business Plan Can Map Your Growth
You started the process of being your own boss. And you want to know what you’re going to do and point your business in the right direction. Your business plan will serve you like a compass. It will keep you focused on your goals and execute them with excellence. As a first-time entrepreneur, just like a lone survivor in the wilderness, an outlined business plan will work just like a compass and map out your growth.
2. Market Insights
Insights into your target market are something that we already discussed on our blog and we will keep doing so until every new entrepreneur understands how vital this actually is.
Prior market research included in your business plan will show investors that you understood deeply your industry before you actually enter it, that you know your business will fit the market and give them the probability of success. Market insights are essential if you want to minimize the risk.
3. Business Plan Helps You Stay on Track
Good organization is necessary from the very beginning of the business planning process. Having a business plan helps you stay organized and keeps you on the right path to success. And the good organization is one of the keys that will help you successfully operate your business.
A business without a plan can easily shift in the wrong direction. As a result of that shift, you’ll lose revenue and by the time you get back on track, the competition with a thorough business plan is way ahead of you, even the ones that started years after you.
4. A Business Plan Helps You Determine the purpose
Even though the primary purpose of a business plan is to showcase your idea to investors and potential stakeholders how you plan to make a profit, it’s not the only thing that matters in a business.
A good business plan will also show the reason your employees will want to get up in the morning and come to the office. So as a first-time entrepreneur, take some time to determine the core values of your future company, and include them into your strategy for success.
5. Financial projections
Figuring out the financial statements is one of the main challenges when it comes to business planning. Financial projections are just a way to predict the growth of your business. It helps you in budget preparation and set the financial goals.
The whole purpose of including financial projections into your business plan is to predict what the business is capable of when it comes to revenue and profit, including assumptions made on potential costs, market size, pricing, marketing conditions, etc.
6. The Business plan keeps your Team aligned
Having a business plan is one of the best ways to make sure that everyone who’s onboard stays aligned with the current and future business plan. This is very important, especially for startups that are in their early stage because everyone needs to be on the same page in terms of working together and growing the business together in the process. Putting everything on paper first is the right way to start.
7. Self-Awareness
The business plan is a great way for first-time entrepreneurs to help them declare their vision and plan for their company. Having a business plan in your hands will force you to think and develop your strategy even further. Also, the business plan will serve you as a guideline to track your progress and hold yourself as a CEO more accountable about your future steps.
This article was originally published on BizzBee Blog.
