Why a Business Plan is Important

Many people overlook the importance of writing a business plan when they are just starting out. This is why you shouldn’t make the same mistakes.

Why Write a Business Plan?

If you had the opportunity to spend two weeks in Europe, wouldn’t you want some sort of map to help you figure out what you wanted to do, how long it would take you to do certain things – and therefore how much the trip’s going to cost?

Creating a business plan is like having a road map for your business. It makes you think through where you are, what things you want/can do, and how much it’s going to cost you to do all those things.

And if you’ve got a map, you’re much more likely to get to where you want to go. If you have a business plan, you’re much more likely to stay on track – or to realize it when you’re off track which is equally important.

Importance of a Business Plan

Business plans are often created to send to investors in hopes that they will invest in the business. But a business plan can also be used by management, strictly for internal use, to keep track of where the business is going (market opportunities), what it needs to do to get there (employee talent), and how much it’s going to cost to get there (financials).

Yes it takes time, effort and thought to create a business plan but it’s worth it and You don’t have to do it all at once.

Begin with an outline including the sections listed below. Start by jotting down your thoughts within each section. Come back to it later when you feel inspired or have some specific points you want to include about your market or financials or whatever.

But keep this in mind: your business plan is never done and it shouldn’t be. A business plan is constantly in progress, waiting for you to add, delete, modify or edit depending on changing market conditions and opportunities.

Below are the most important sections for your plan:

  • Executive Summary – This section is a concise overview of all that is included in your business plan. It needs to be short, about two pages, and well written. Even though the summary is the first section in any business plan, write it last. It will be much easier for you to encapsulate what your business is, how it’s different, who’s the competition, etc. after you’ve taken the time and thought necessary to write all the other sections.
  • Products and Services
    *  Thorough description of each product/service you offer, emphasizing benefits
    *  Analysis of your competition
  • Market Analysis
    *  Industry description; more information on competitors
    *  Sketch of targeted customer segments
  • Strategy and Implementation  – How you will reach your targeted customers: pricing, promotion, distribution
  • Management Team – Skills/talents of management team, consultants
  • Financial Plan and Projections 

This outline will help you get started. But the more time you spend working on your business plan (notice I did not say obsessing about your plan), the more you will learn about your business. The exercise makes you stop and think about your direction: Does it make sense, are there other options, who is your competition, what are they doing, etc. Your next steps will become clearer whether you do them tomorrow or next year.  Contact me if you’d like my thoughts on your specific business whether you want to launch it or want to make it grow.

Posted in Business Owners Tips
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