Why do I need a business plan?

Why do I need a business plan?

You need a business plan to help you avoid big mistakes. The last thing you want to do is work on your start-up for a year, only to realize you were doomed to fail from the start. Many founders learn the hard way that they didn’t set aside enough capital to reach their goals, took on partners with the wrong skills and resources, or don’t have a viable way to make money. Developing and sharing a business plan can help ensure that you’re sprinting down the right path.

You need a business plan to help make sure everyone’s on the same page. Chances are you are not building a company by yourself. Ideally, you’ll have partners so you can launch faster, smarter, and with less need to pay employees or suppliers. Even if you don’t have partners, you’ll have family, friends, and advisers involved. A business plan helps get everyone involved in your start-up heading in the same direction.

You need a business plan to help you develop a strategy. As a start-up, execution is everything. That means you have to set priorities, establish goals, and measure performance.  You also need to identify the key questions to answer like: what do customers really want? Will customers buy our product/services and how much will they pay? How can we attract customers in a way that’s cost effective and scalable?  These are all things you’ll address during the business planning process.

You need a business plan in order to raise capital. If you raise or borrow money, even from friends and family, you’ll need to communicate your vision in a clear, compelling way. A good business plan will help you do just that. In the end, you need something that will demonstrate your start-up’s ability to grow or pay back the loans you accepted.

A business plan is not set in stone. It is simply a guide to get you to a successful launch, and as you grow, so will it.

 

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