Why Having a Business Plan is Important Bplans

Why having a business plan is important by Bplans.com. Do you really need a business plan? Is it worth the investment of time and resources? Can't you just wing it and skip the whole planning process? Good questions! Here's everything you need to know. #1 It's essential if you're seeking a loan or investment. If you're asking a bank, angel investor, or venture capitalist for funding, you're going to need a business plan. It doesn't need to be 200 pages long, but you want your lender to be able to see that there's a market for the problem your business solves. You have a strong plan for meeting your sales goals, and that your key financial statements and forecasts are realistic. #2 Business planning is proven to help you grow 30% faster. The process of writing your plan and updating it regularly are the most important parts of that process. It gives you a better window into what you need to do to set milestones, track your progress, and achieve your goals and be successful. The key is being able to quickly respond to challenges and opportunities as they arise and as you learn more about your customers. #3 You'll make spending decisions with confidence. Your business planning process, especially reviewing your forecasts against your actual sales, can be really helpful when you're trying to figure out whether you can afford to make a major purchase or take on an ongoing expense like a new employee. #4 You're more likely to catch critical cash flow challenges early. The other side of those major spending decisions is understanding and monitoring your business's cash flow. Reviewing your cash flow statement regularly will help you catch trends before you're anywhere near a cash flow crisis. #5 Having a business plan minimizes your risk. When you're just starting out, there is so much you don't know about your customers, your competition, and even about operations. As a business owner, you signed up for some of that uncertainty when you started your business, but there's a lot you can do to reduce your risk. Creating and reviewing your business plan regularly is a great way to uncover your weak spots: the flaws, gaps, and assumptions you've made, and develop contingency plans. # 6 it's a solid foundation for strategic planning and prioritization. Your business plan is a great place to map how your sales and revenue goals fit with your expense budget. Drawing a clear connection between what you're investing in and the results you hope to achieve will help you make sure that you're setting yourself up for success. If everyone on your team knows how their piece of the work impacts the larger company, the more invested they'll be in meeting your goals, because they'll know their part of the work really matters #7 It will help you set achievable goals in milestones. Every good business plan outlines SMART goals and milestones. SMART goals are specific, measurable, achievable, relevant, and time-based. Use your business plan to set high-level milestones, then use those milestones to create meaningful goals and guide your sales and marketing strategies. #8 Your business plan is an asset if you ever want to sell down the road. You might decide that you want to sell your business, or position yourself for acquisition. Having a solid business plan is going to help you make the case for higher valuation. Your business is likely to be worth more to a buyer if it's easy for them to understand your business model, your target market, and your overall potential to grow and scale. Here's how to get started: Download our FREE business plan template, or find a free sample business plan in your industry to help you find what you'll need to include in your plan. Or check out LivePlan. LivePlan walks you step-by-step through the planning process, even the financials with intuitive fill-in-the-blank inputs, simple but powerful financial forecasting, and beautiful business plans that impress investors. You'll go from idea to complete business plan in no time. Good luck!