As small business owners and entrepreneurs, there are many crucial steps toward starting your businesses and ventures. From accessing capital to branding and marketing, there is a lot that goes into launching a business and turning ideas into reality. One important step that should not be overlooked, is writing a business plan.
A business plan acts as a roadmap for your business and can be especially helpful when you are first starting out. Many new entrepreneurs may shy away from creating a business plan, thinking it is too difficult or unnecessary, but having one can make all the difference in your entrepreneurial journey.
Since December is National Write a Business Plan Month we are encouraging aspiring entrepreneurs to take that first step and start planning your dream business by writing a business plan.
5 reasons why you need a business plan
The U.S. Small Business Administration (SBA) provides various resources to small business owners including advice and services to help you write your business plan. Below are the SBA’s top 5 reasons for why you need a business plan.
- It will help you steer your business as you start and grow.
Think of a business plan as a GPS to get your business going. A good business plan guides you through each stage of starting and managing your business. You’ll use your business plan like a GPS for how to structure, run, and grow your new business. It’s a way to think through and detail all the key elements of how your business will run.
- It’s not as hard as you think.
A business plan is a written tool about your business that projects 3-5 years ahead and outlines the path your business intends to take to make money and grow revenue. Think of it as a living project for your business, and not as a one-time document. Break it down into mini-plans – one for sales and marketing, one for pricing, one for operations, and so on.
- It will help you to reach business milestones.
A well-thought-out business plan helps you to step back and think objectively about the key elements of your business and informs your decision making as you move forward. It is essential whether you need to secure a business loan or not. Keep in mind that the plan does not have to be like an encyclopedia and does not have to have all the answers.
- It can help you get funding.
Business plans can help you get funding or bring on new business partners. Having one in place will help investors feel confident that they will see a return on their investment. Your business plan is the tool you will use to persuade others that working with you (or investing in your business) is a smart decision.
- There’s no wrong way to write a business plan.
There is no right or wrong way to write a business plan. You can pick a plan format that works best for you. What’s important is that your business plan meets your needs. Most business plans fall into one of two common categories: traditional or lean startup.
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To help you get started, The SBA offers a Business Plan Tool that helps simplify the process. The tool consists of eight easy-to-follow steps to help create a well-prepared plan.