A business plan is a map that will lead you to success.
If you are dreaming of starting your own business or quitting your job to become a freelance writer or consultant, congratulations! Have you got your business plan done? If not, there’s still time to get started on writing your business plan. And here are a ten good reasons you’ll need to write one sooner, rather than later.
A well-written business plan will help you:
1. See where you fit into today’s competitive market. Is your business idea too broad that the market is already saturated with people trying to do exactly what you want to do? Or is your business idea so narrow and specific that you won’t be able to find enough customers to make money?
2. Reduce financial risks. Writing a business plan helps you objectively evaluate whether or not your business idea is a viable one. You’ll be able to examine whether or not people want and need your product and service before you spend a lot of money launching your business.
3. Identify knowledge gaps. Writing a business plan challenges you to assess your current knowledge of your intended business. If you can’t answer certain keystone questions in your business plan, then you’ll see that you need to brush up on those areas or bring in an expert who can help you get certain jobs done. For example, if you discover that reading financial statements, nevermind preparing a budget, is a challenge for you, you can either choose to develop those skills yourself and write that into your business plan, or you can hire a bookkeeper or accountant to help you manage those parts of your business.
4. Stay on track. Having a business plan in hand when you launch your business will help keep you focused on what you originally set out to do. Without clear goals for your business written down, it can be tempting to continually change directions and try to chase money down by following short-lived trends and fads.
5. Build your self-confidence. One of the reasons people don’t talk about their creative dreams is the fear that others will try to knock their ideas down. Writing a business plan increases your self-confidence. When you have taken the time to carefully think through and map out what it is you want to achieve and how you want to get there, few people will be able to come up with a convincing argument that your business will fail. Unless that person knows more about your business than you do, you’ll have a solid defense system against all those Negative Nellies who try to tear down other people’s ideas. And if the person that is trying to bring you down because they do know more than you do about your particular business idea, then go ahead and ask them what they did to become successful. If they truly are successful business owners, then perhaps they can share their wisdom and experience with you!
6. Preserve precious resources. When you’re striking out on your own and starting your own business, money will be tight for the first few months, possibly even years, while you build your client base, establish a good reputation, and grow your business. A well-written business plan will help you track your start-up costs so that you can still afford daily living expense until your cash-flow picks up.
7. Talk about your business idea with pride and enthusiasm. Writing a business plan helps you organize all your creative ideas so that you can share them with others in a clear, easy-to-understand, and concise manner.
8. Be prepared for the various stages of your business’ growth. Writing a business plan will help you manage your business as it grows. If you have done your homework, you’ll know ahead of time when to expect seasonal upticks and slowdowns. That will help you plan the best time of the year to work on behind the scenes projects, such as upgrading your skills, working on your data, conducting research, and so on.
9. Save time and money. Writing a business plan will help you spot areas of your operations that can be streamlined to reduce waste and capitalize on your strengths and assets. Writing a business plan may take time, but over the long-term you’ll get back what you put into it.
10. Secure loans and grants to launch your new business. Writing a business plan isn’t just a good idea to help keep you focused and organized. In many cases, banks and financial institutions will want to see your business plan before they grant you a small business loan.
If you have never written a business plan before, don’t panic. There are plenty of tools and resources out there to help you get started. The books and videos featured below can help. You can also check out books at the library, take a night course on starting a new business or attend a seminar on how to write a business plan. You can also find help from some government agencies set up to support economic development and support. Check out the list of links in the sidebar.