A business plan is not just a document; it is a white paper on your business. Every new business you one needs to start must begin with a business plan. If you look at most of the successful businesses today all had a very good business plan in place at the inception. One can say that business owners that develop and follow a business plan are more likely to succeed than business owners who do not have a business plan.
There are several reasons why Business Plan is important, some of them are:
Secure Financing for your business
So often it is observed that those people who have business ideas do not have enough capital to start their own business. They need to obtain financing from various financial institutions. Any financial institution would not lend money just because you have an idea; you need to present to them a business plan. A well-written business plan shows lenders and investors that you are serious about your business idea and have spent sufficient time in the planning process.
To plan for uncertain future
Planning is vital at any stage of the organization in any business. If you pen down your business plans you understand your business better and also specific courses of action can be taken to improve it. You can list down all the alternative solutions and ideas, in future these can be used in case of any eventuality.
Plan and Think about all aspect of Business
As mentioned earlier once you sit to draft a business plan, you start to think about each and every aspect of the business. This will help you think of business strategy, recognize limits and identify the problems that you might face.
Communicate Ideas of Others
When you sit to write your business plan you would have already thought what business you want to venture into. Once you begin to start to write toy will begin to believe that your business would succeed. Once you have entered your ideas and plan on paper it will also help you convince the readers. Once your ideas are communicated to the readers they will also gain confidence in your business plan and this can help you get quick financing and also winning the confidence of suppliers.
Tool for Managing the Business
Once the business is up and running you can use the plan to supplement your decision making and planning your future decisions. It can also be used to track whether your business is developing according to plan