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The importance of a business plan
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Business plans are like road maps: it’s possible to travel without one, but that will only increase the odds of getting lost along the way.
Owners with a business plan see growth 30% faster than those without one, and 71% of the fast-growing companies have business plans . Before we get into the thick of it, let’s define and go over what a business plan actually is.
What is a business plan?
A business plan is a 15-20 page document that outlines how you will achieve your business objectives and includes information about your product, marketing strategies, and finances. You should create one when you’re starting a new business and keep updating it as your business grows.
Rather than putting yourself in a position where you may have to stop and ask for directions or even circle back and start over, small business owners often use business plans to help guide them. That’s because they help them see the bigger picture, plan ahead, make important decisions, and improve the overall likelihood of success.
Why is a business plan important?
A well-written business plan is an important tool because it gives entrepreneurs and small business owners, as well as their employees, the ability to lay out their goals and track their progress as their business begins to grow. Business planning should be the first thing done when starting a new business. Business plans are also important for attracting investors so they can determine if your business is on the right path and worth putting money into.
Business plans typically include detailed information that can help improve your business’s chances of success, like:
- A market analysis : gathering information about factors and conditions that affect your industry
- Competitive analysis : evaluating the strengths and weaknesses of your competitors
- Customer segmentation : divide your customers into different groups based on specific characteristics to improve your marketing
- Marketing: using your research to advertise your business
- Logistics and operations plans : planning and executing the most efficient production process
- Cash flow projection : being prepared for how much money is going into and out of your business
- An overall path to long-term growth
What is the purpose of a business plan?
A business plan is like a map for small business owners, showing them where to go and how to get there. Its main purposes are to help you avoid risks, keep everyone on the same page, plan finances, check if your business idea is good, make operations smoother, and adapt to changes. It's a way for small business owners to plan, communicate, and stay on track toward their goals.
10 reasons why you need a business plan
I know what you’re thinking: “Do I really need a business plan? It sounds like a lot of work, plus I heard they’re outdated and I like figuring things out as I go...”.
The answer is: yes, you really do need a business plan! As entrepreneur Kevin J. Donaldson said, “Going into business without a business plan is like going on a mountain trek without a map or GPS support—you’ll eventually get lost and starve! Though it may sound tedious and time-consuming, business plans are critical to starting your business and setting yourself up for success.
To outline the importance of business plans and make the process sound less daunting, here are 10 reasons why you need one for your small business.
1. To help you with critical decisions
The primary importance of a business plan is that they help you make better decisions. Entrepreneurship is often an endless exercise in decision making and crisis management. Sitting down and considering all the ramifications of any given decision is a luxury that small businesses can’t always afford. That’s where a business plan comes in.
Building a business plan allows you to determine the answer to some of the most critical business decisions ahead of time.
Creating a robust business plan is a forcing function—you have to sit down and think about major components of your business before you get started, like your marketing strategy and what products you’ll sell. You answer many tough questions before they arise. And thinking deeply about your core strategies can also help you understand how those decisions will impact your broader strategy.
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2. To iron out the kinks
Putting together a business plan requires entrepreneurs to ask themselves a lot of hard questions and take the time to come up with well-researched and insightful answers. Even if the document itself were to disappear as soon as it’s completed, the practice of writing it helps to articulate your vision in realistic terms and better determine if there are any gaps in your strategy.
3. To avoid the big mistakes
Only about half of small businesses are still around to celebrate their fifth birthday . While there are many reasons why small businesses fail, many of the most common are purposefully addressed in business plans.
According to data from CB Insights , some of the most common reasons businesses fail include:
- No market need : No one wants what you’re selling.
- Lack of capital : Cash flow issues or businesses simply run out of money.
- Inadequate team : This underscores the importance of hiring the right people to help you run your business.
- Stiff competition : It’s tough to generate a steady profit when you have a lot of competitors in your space.
- Pricing : Some entrepreneurs price their products or services too high or too low—both scenarios can be a recipe for disaster.
The exercise of creating a business plan can help you avoid these major mistakes. Whether it’s cash flow forecasts or a product-market fit analysis , every piece of a business plan can help spot some of those potentially critical mistakes before they arise. For example, don’t be afraid to scrap an idea you really loved if it turns out there’s no market need. Be honest with yourself!
Get a jumpstart on your business plan by creating your own cash flow projection .
4. To prove the viability of the business
Many businesses are created out of passion, and while passion can be a great motivator, it’s not a great proof point.
Planning out exactly how you’re going to turn that vision into a successful business is perhaps the most important step between concept and reality. Business plans can help you confirm that your grand idea makes sound business sense.
![why is it important to have a business plan before starting a business A graphic showing you a “Business Plan Outline.” There are four sections on the left side: Executive Summary at the top, Company Description below it, followed by Market Analysis, and lastly Organization and Management. There was four sections on the right side. At the top: “Service or Product Line.” Below that, “Marketing and Sales.” Below that, “Funding Request.” And lastly: “Financial Projections.” At the very bottom below the left and right columns is a section that says “Appendix.](https://cdn.prod.website-files.com/6253f6e60f27498e7d4a1e46/626280e66961718223568f03_business-plan-outline.png)
A critical component of your business plan is the market research section. Market research can offer deep insight into your customers, your competitors, and your chosen industry. Not only can it enlighten entrepreneurs who are starting up a new business, but it can also better inform existing businesses on activities like marketing, advertising, and releasing new products or services.
Want to prove there’s a market gap? Here’s how you can get started with market research.
5. To set better objectives and benchmarks
Without a business plan, objectives often become arbitrary, without much rhyme or reason behind them. Having a business plan can help make those benchmarks more intentional and consequential. They can also help keep you accountable to your long-term vision and strategy, and gain insights into how your strategy is (or isn’t) coming together over time.
6. To communicate objectives and benchmarks
Whether you’re managing a team of 100 or a team of two, you can’t always be there to make every decision yourself. Think of the business plan like a substitute teacher, ready to answer questions any time there’s an absence. Let your staff know that when in doubt, they can always consult the business plan to understand the next steps in the event that they can’t get an answer from you directly.
Sharing your business plan with team members also helps ensure that all members are aligned with what you’re doing, why, and share the same understanding of long-term objectives.
7. To provide a guide for service providers
Small businesses typically employ contractors , freelancers, and other professionals to help them with tasks like accounting , marketing, legal assistance, and as consultants. Having a business plan in place allows you to easily share relevant sections with those you rely on to support the organization, while ensuring everyone is on the same page.
8. To secure financing
Did you know you’re 2.5x more likely to get funded if you have a business plan?If you’re planning on pitching to venture capitalists, borrowing from a bank, or are considering selling your company in the future, you’re likely going to need a business plan. After all, anyone that’s interested in putting money into your company is going to want to know it’s in good hands and that it’s viable in the long run. Business plans are the most effective ways of proving that and are typically a requirement for anyone seeking outside financing.
Learn what you need to get a small business loan.
9. To better understand the broader landscape
No business is an island, and while you might have a strong handle on everything happening under your own roof, it’s equally important to understand the market terrain as well. Writing a business plan can go a long way in helping you better understand your competition and the market you’re operating in more broadly, illuminate consumer trends and preferences, potential disruptions and other insights that aren’t always plainly visible.
10. To reduce risk
Entrepreneurship is a risky business, but that risk becomes significantly more manageable once tested against a well-crafted business plan. Drawing up revenue and expense projections, devising logistics and operational plans, and understanding the market and competitive landscape can all help reduce the risk factor from an inherently precarious way to make a living. Having a business plan allows you to leave less up to chance, make better decisions, and enjoy the clearest possible view of the future of your company.
Business plan FAQs
How does having a business plan help small business owners make better decisions.
Having a business plan supports small business owners in making smarter decisions by providing a structured framework to assess all parts of their businesses. It helps you foresee potential challenges, identify opportunities, and set clear objectives. Business plans help you make decisions across the board, including market strategies, financial management, resource allocation, and growth planning.
What industry-specific issues can business plans help tackle?
Business plans can address industry-specific challenges like regulatory compliance, technological advancements, market trends, and competitive landscape. For instance, in highly regulated industries like healthcare or finance, a comprehensive business plan can outline compliance measures and risk management strategies.
How can small business owners use their business plans to pitch investors or apply for loans?
In addition to attracting investors and securing financing, small business owners can leverage their business plans during pitches or loan applications by focusing on key elements that resonate with potential stakeholders. This includes highlighting market analysis, competitive advantages, revenue projections, and scalability plans. Presenting a well-researched and data-driven business plan demonstrates credibility and makes investors or lenders feel confident about your business’s potential health and growth.
Understanding the importance of a business plan
Now that you have a solid grasp on the “why” behind business plans, you can confidently move forward with creating your own.
Remember that a business plan will grow and evolve along with your business, so it’s an important part of your whole journey—not just the beginning.
Related Posts
Now that you’ve read up on the purpose of a business plan, check out our guide to help you get started.
The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.
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What Is a Business Plan?
Understanding business plans, how to write a business plan, common elements of a business plan, the bottom line, business plan: what it is, what's included, and how to write one.
Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.
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A business plan is a document that outlines a company's goals and the strategies to achieve them. It's valuable for both startups and established companies. For startups, a well-crafted business plan is crucial for attracting potential lenders and investors. Established businesses use business plans to stay on track and aligned with their growth objectives. This article will explain the key components of an effective business plan and guidance on how to write one.
Key Takeaways
- A business plan is a document detailing a company's business activities and strategies for achieving its goals.
- Startup companies use business plans to launch their venture and to attract outside investors.
- For established companies, a business plan helps keep the executive team focused on short- and long-term objectives.
- There's no single required format for a business plan, but certain key elements are essential for most companies.
Investopedia / Ryan Oakley
Any new business should have a business plan in place before beginning operations. Banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses.
Even if a company doesn't need additional funding, having a business plan helps it stay focused on its goals. Research from the University of Oregon shows that businesses with a plan are significantly more likely to secure funding than those without one. Moreover, companies with a business plan grow 30% faster than those that don't plan. According to a Harvard Business Review article, entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't.
A business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction. An established business moving in a new direction might even create an entirely new plan.
There are numerous benefits to creating (and sticking to) a well-conceived business plan. It allows for careful consideration of ideas before significant investment, highlights potential obstacles to success, and provides a tool for seeking objective feedback from trusted outsiders. A business plan may also help ensure that a company’s executive team remains aligned on strategic action items and priorities.
While business plans vary widely, even among competitors in the same industry, they often share basic elements detailed below.
A well-crafted business plan is essential for attracting investors and guiding a company's strategic growth. It should address market needs and investor requirements and provide clear financial projections.
While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.
Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.
The length of a business plan can vary greatly from business to business. Regardless, gathering the basic information into a 15- to 25-page document is best. Any additional crucial elements, such as patent applications, can be referenced in the main document and included as appendices.
Common elements in many business plans include:
- Executive summary : This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
- Products and services : Describe the products and services the company offers or plans to introduce. Include details on pricing, product lifespan, and unique consumer benefits. Mention production and manufacturing processes, relevant patents , proprietary technology , and research and development (R&D) information.
- Market analysis : Explain the current state of the industry and the competition. Detail where the company fits in, the types of customers it plans to target, and how it plans to capture market share from competitors.
- Marketing strategy : Outline the company's plans to attract and retain customers, including anticipated advertising and marketing campaigns. Describe the distribution channels that will be used to deliver products or services to consumers.
- Financial plans and projections : Established businesses should include financial statements, balance sheets, and other relevant financial information. New businesses should provide financial targets and estimates for the first few years. This section may also include any funding requests.
Investors want to see a clear exit strategy, expected returns, and a timeline for cashing out. It's likely a good idea to provide five-year profitability forecasts and realistic financial estimates.
2 Types of Business Plans
Business plans can vary in format, often categorized into traditional and lean startup plans. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.
- Traditional business plans : These are detailed and lengthy, requiring more effort to create but offering comprehensive information that can be persuasive to potential investors.
- Lean startup business plans : These are concise, sometimes just one page, and focus on key elements. While they save time, companies should be ready to provide additional details if requested by investors or lenders.
Why Do Business Plans Fail?
A business plan isn't a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections. Markets and the economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All this calls for building flexibility into your plan, so you can pivot to a new course if needed.
How Often Should a Business Plan Be Updated?
How frequently a business plan needs to be revised will depend on its nature. Updating your business plan is crucial due to changes in external factors (market trends, competition, and regulations) and internal developments (like employee growth and new products). While a well-established business might want to review its plan once a year and make changes if necessary, a new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.
What Does a Lean Startup Business Plan Include?
The lean startup business plan is ideal for quickly explaining a business, especially for new companies that don't have much information yet. Key sections may include a value proposition , major activities and advantages, resources (staff, intellectual property, and capital), partnerships, customer segments, and revenue sources.
A well-crafted business plan is crucial for any company, whether it's a startup looking for investment or an established business wanting to stay on course. It outlines goals and strategies, boosting a company's chances of securing funding and achieving growth.
As your business and the market change, update your business plan regularly. This keeps it relevant and aligned with your current goals and conditions. Think of your business plan as a living document that evolves with your company, not something carved in stone.
University of Oregon Department of Economics. " Evaluation of the Effectiveness of Business Planning Using Palo Alto's Business Plan Pro ." Eason Ding & Tim Hursey.
Bplans. " Do You Need a Business Plan? Scientific Research Says Yes ."
Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."
Harvard Business Review. " How to Write a Winning Business Plan ."
U.S. Small Business Administration. " Write Your Business Plan ."
SCORE. " When and Why Should You Review Your Business Plan? "
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What is a Business Plan? Definition, Tips, and Templates
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Published: June 28, 2024
Years ago, I had an idea to launch a line of region-specific board games. I knew there was a market for games that celebrated local culture and heritage. I was so excited about the concept and couldn't wait to get started.
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But my idea never took off. Why? Because I didn‘t have a plan. I lacked direction, missed opportunities, and ultimately, the venture never got off the ground.
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And that’s exactly why a business plan is important. It cements your vision, gives you clarity, and outlines your next step.
In this post, I‘ll explain what a business plan is, the reasons why you’d need one, identify different types of business plans, and what you should include in yours.
Table of Contents
What is a business plan?
What is a business plan used for.
- Business Plan Template [Download Now]
Purposes of a Business Plan
What does a business plan need to include, types of business plans.
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A business plan is a comprehensive document that outlines a company's goals, strategies, and financial projections. It provides a detailed description of the business, including its products or services, target market, competitive landscape, and marketing and sales strategies. The plan also includes a financial section that forecasts revenue, expenses, and cash flow, as well as a funding request if the business is seeking investment.
The business plan is an undeniably critical component to getting any company off the ground. It's key to securing financing, documenting your business model, outlining your financial projections, and turning that nugget of a business idea into a reality.
The purpose of a business plan is three-fold: It summarizes the organization’s strategy in order to execute it long term, secures financing from investors, and helps forecast future business demands.
Business Plan Template [ Download Now ]
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How to Write a Business Plan: Your Step-by-Step Guide
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So, you’ve got an idea and you want to start a business —great! Before you do anything else, like seek funding or build out a team, you'll need to know how to write a business plan. This plan will serve as the foundation of your company while also giving investors and future employees a clear idea of your purpose.
Below, Lauren Cobello, Founder and CEO of Leverage with Media PR , gives her best advice on how to make a business plan for your company.
Build your dream business with the help of a high-paying job—browse open jobs on The Muse »
What is a business plan, and when do you need one?
According to Cobello, a business plan is a document that contains the mission of the business and a brief overview of it, as well as the objectives, strategies, and financial plans of the founder. A business plan comes into play very early on in the process of starting a company—more or less before you do anything else.
“You should start a company with a business plan in mind—especially if you plan to get funding for the company,” Cobello says. “You’re going to need it.”
Whether that funding comes from a loan, an investor, or crowdsourcing, a business plan is imperative to secure the capital, says the U.S. Small Business Administration . Anyone who’s considering giving you money is going to want to review your business plan before doing so. That means before you head into any meeting, make sure you have physical copies of your business plan to share.
Different types of business plans
The four main types of business plans are:
Startup Business Plans
Internal business plans, strategic business plans, one-page business plans.
Let's break down each one:
If you're wondering how to write a business plan for a startup, Cobello has advice for you. Startup business plans are the most common type, she says, and they are a critical tool for new business ventures that want funding. A startup is defined as a company that’s in its first stages of operations, founded by an entrepreneur who has a product or service idea.
Most startups begin with very little money, so they need a strong business plan to convince family, friends, banks, and/or venture capitalists to invest in the new company.
Internal business plans “are for internal use only,” says Cobello. This kind of document is not public-facing, only company-facing, and it contains an outline of the company’s business strategy, financial goals and budgets, and performance data.
Internal business plans aren’t used to secure funding, but rather to set goals and get everyone working there tracking towards them.
As the name implies, strategic business plans are geared more towards strategy and they include an assessment of the current business landscape, notes Jérôme Côté, a Business Advisor at BDC Advisory Services .
Unlike a traditional business plan, Cobello adds, strategic plans include a SWOT analysis (which stands for strengths, weaknesses, opportunities, and threats) and an in-depth action plan for the next six to 12 months. Strategic plans are action-based and take into account the state of the company and the industry in which it exists.
Although a typical business plan falls between 15 to 30 pages, some companies opt for the much shorter One-Page Business Plan. A one-page business plan is a simplified version of the larger business plan, and it focuses on the problem your product or service is solving, the solution (your product), and your business model (how you’ll make money).
A one-page plan is hyper-direct and easy to read, making it an effective tool for businesses of all sizes, at any stage.
How to create a business plan in 7 steps
Every business plan is different, and the steps you take to complete yours will depend on what type and format you choose. That said, if you need a place to start and appreciate a roadmap, here’s what Cobello recommends:
1. Conduct your research
Before writing your business plan, you’ll want to do a thorough investigation of what’s out there. Who will be the competitors for your product or service? Who is included in the target market? What industry trends are you capitalizing on, or rebuking? You want to figure out where you sit in the market and what your company’s value propositions are. What makes you different—and better?
2. Define your purpose for the business plan
The purpose of your business plan will determine which kind of plan you choose to create. Are you trying to drum up funding, or get the company employees focused on specific goals? (For the former, you’d want a startup business plan, while an internal plan would satisfy the latter.) Also, consider your audience. An investment firm that sees hundreds of potential business plans a day may prefer to see a one-pager upfront and, if they’re interested, a longer plan later.
3. Write your company description
Every business plan needs a company description—aka a summary of the company’s purpose, what they do/offer, and what makes it unique. Company descriptions should be clear and concise, avoiding the use of jargon, Cobello says. Ideally, descriptions should be a few paragraphs at most.
4. Explain and show how the company will make money
A business plan should be centered around the company’s goals, and it should clearly explain how the company will generate revenue. To do this, Cobello recommends using actual numbers and details, as opposed to just projections.
For instance, if the company is already making money, show how much and at what cost (e.g. what was the net profit). If it hasn’t generated revenue yet, outline the plan for how it will—including what the product/service will cost to produce and how much it will cost the consumer.
5. Outline your marketing strategy
How will you promote the business? Through what channels will you be promoting it? How are you going to reach and appeal to your target market? The more specific and thorough you can be with your plans here, the better, Cobello says.
6. Explain how you’ll spend your funding
What will you do with the money you raise? What are the first steps you plan to take? As a founder, you want to instill confidence in your investors and show them that the instant you receive their money, you’ll be taking smart actions that grow the company.
7. Include supporting documents
Creating a business plan is in some ways akin to building a legal case, but for your business. “You want to tell a story, and to be as thorough as possible, while keeping your plan succinct, clear, interesting, and visually appealing,” Cobello says. “Supporting documents could include financial projects, a competitive analysis of the market you’re entering into, and even any licenses, patents, or permits you’ve secured.”
A business plan is an individualized document—it’s ultimately up to you what information to include and what story you tell. But above all, Cobello says, your business plan should have a clear focus and goal in mind, because everything else will build off this cornerstone.
“Many people don’t realize how important business plans are for the health of their company,” she says. “Set aside time to make this a priority for your business, and make sure to keep it updated as you grow.”
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What is a Business Plan and Why is it Important?
What is a business plan.
Whether you’re starting a small business or exploring ways to expand an existing one, a business plan is an important tool to help guide your decisions. Think of it as a roadmap to success, providing greater clarity on all aspects of your business, from marketing and finance to operations and product/service details.
While some owners may be tempted to jump directly into startup mode, writing a business plan is a crucial first step for budding entrepreneurs to check the viability of a business before investing too much time or money. The purpose of a business plan is to help articulate a strategy for starting your business. It also provides insight on steps to be taken, resources required for achieving your business goals and a timeline of anticipated results.
In fact, businesses that plan grow 30% faster than those that don’t. 1
For existing small businesses, a business plan should be updated annually as a way to guide growth and navigate the expansion into new markets.
Studies show that nearly 71% of the fastest-growing businesses have business plans, indicating that even existing businesses can benefit from updating their plans. 2
Your plan should include explicit objectives for hiring new employees , market analysis, financial projections, and potential investors. The objectives should indicate how they’ll help your business prosper and grow.
Building an asset management business plan
Committing resources to capital improvements and new assets such as computers, software or cars/trucks is never an easy decision for budget-conscious small business owners. But a business plan can bring clarity to the process of whether to buy or lease and help determine the optimal amount allocated to those assets. A good business plan can also help you decide if it’s feasible to take on additional office, retail or work space.
Creating a marketing strategy
Marketing and market potential are important aspects of a plan for aspiring small businesses.
Getting your business in front of customers on a consistent basis is one of the keys to ensuring your business not only stays afloat but also thrives.
Marketing strategies can be simple, but before you decide on how you will get the word out, getting clear on your target audience and why your business solves their problem can make sticking to your marketing plan easier.
Knowing your unique market positioning can help you determine your messaging. Your marketing strategy should include who your target audience is, the platforms or methods you will connect with them on, and a measurement framework to determine if your efforts are working.
Take entrepreneur Scott Sultzer, who opened Sandwich Joint restaurant in downtown Los Angeles in 2009. “I included the potential marketing demographic of all those who lived in a certain area of the city,” he said of his marketing strategy. “My goal was to capture a certain percentage of all those people who lived and worked nearby.” 4
Created primarily as a marketing tool, Sulzer’s 10-page plan included such topics as target market breakdown, marketing strategy and market penetration. “My business plan was mostly about market projections,” he said. “How are we going to get those people that lead to an increase in our daily sales? And how are we going to reach them to let them know we’re here?” 4
Depending on your business, it’s important to have both brick-and-mortar marketing strategies as well as a plan for marketing your business online .
Seeking investment for your business
In addition to providing a roadmap for progress and a marketing plan , your business plan could also be important in securing funding .
Whether you’re seeking a credit line from a bank or an influx of capital from investors, a business plan that answers questions about profitability and revenue generation can make the difference between whether someone decides to invest – or how much they might choose to invest.
In fact, a study showed that businesses with a plan were more likely to receive formal financial support, such as funding, than businesses without one. 3
Hiring the right talent
A business plan may also be needed to retain other professional services as well, such as attorneys, landlords, consultants or accountants. Sulzer used his business plan to secure a lease.
“I had to have a viable document that they could trust,” said Sulzer, who leased from one of the largest landowners in downtown Los Angeles. 4
“With a corporate landlord, they wouldn’t deal with me unless I had a business plan. I had to submit all my information and a plan that presented what I wanted to do, with financial breakdowns and percentages, demographics, and how I was going to get customers.” 4
For a small business to succeed, attracting talented workers and partners is of vital importance. A part of a business plan for hiring employees is to help bring in the right talent, from the executive level to skilled staff, by showing them the direction and growth potential of the business. It can also help secure vendor accounts, especially with exclusive suppliers.
Setting business plan objectives for management
Finally, a business plan can be important in providing structure and management objectives to a small business. It can become a reference tool to keep management on track with sales targets and operational milestones. When used properly and consulted regularly, it can help you measure and manage what you’re working so hard to create.
Ready to take the next step? Learn how to write a business plan .
Don’t forget to consider insurance coverage in your business plan. When the unexpected happens, you want to make sure your small business is covered. Customized insurance solutions are crucial to protecting and keeping your operation going.
Find out how small business insurance from Nationwide can help you build and protect your business whether you are just starting up or already established.
1 https://www.effectuation.org/wp-content/uploads/2017/06/The-Multiple-Effects-of-Business-Planning-onNew-Venture-Performance-1.pdf , Accessed October 2021. 2 https://onlinelibrary.wiley.com/doi/abs/10.1111/0447-2778.00006 , Accessed October 2021. 3 https://www.tandfonline.com/doi/abs/10.1080/13504851.2014.967377 , Accessed October 2021. 4 Nationwide Interview with Scott Sultzer, 2016.
Disclaimer: The information included is designed for informational purposes only. It is not legal, tax, financial or any other sort of advice, nor is it a substitute for such advice. The information may not apply to your specific situation. We have tried to make sure the information is accurate, but it could be outdated or even inaccurate in parts. It is the reader’s responsibility to comply with any applicable local, state, or federal regulations. Nationwide Mutual Insurance Company, its affiliates and their employees make no warranties about the information nor guarantee of results, and they assume no liability in connection with the information provided. Nationwide, Nationwide is on your side, and the Nationwide N and Eagle are services marks of Nationwide Mutual Insurance Company. © 2021 Nationwide.
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The importance of business plan: 5 key reasons.
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A key part of any business is its business plan. They can help define the goals of your business and help it reach success. A good business plan can also help you develop an adequate marketing strategy. There are a number of reasons all business owners need business plans, keep reading to learn more!
Here’s What We’ll Cover:
What Is a Business Plan?
5 reasons you need a well-written business plan, how do i make a business plan, key takeaways.
A business plan contains detailed information that can help determine its success. Some of this information can include the following:
- Market analysis
- Cash flow projection
- Competitive analysis
- Financial statements and financial projections
- An operating plan
A solid business plan is a good way to attract potential investors. It can also help you display to business partners that you have a successful business growing. In a competitive landscape, a formal business plan is your key to success.
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Check out all of the biggest reasons you need a good business plan below.
1. To Secure Funding
Whether you’re seeking funding from a venture capitalist or a bank, you’ll need a business plan. Business plans are the foundation of a business. They tell the parties that you’re seeking funding from whether or not you’re worth investing in. If you need any sort of outside financing, you’ll need a good business plan to secure it.
2. Set and Communicate Goals
A business plan gives you a tangible way of reviewing your business goals. Business plans revolve around the present and the future. When you establish your goals and put them in writing, you’re more likely to reach them. A strong business plan includes these goals, and allows you to communicate them to investors and employees alike.
3. Prove Viability in the Market
While many businesses are born from passion, not many will last without an effective business plan. While a business concept may seem sound, things may change once the specifics are written down. Often, people who attempt to start a business without a plan will fail. This is because they don’t take into account all of the planning and funds needed to get a business off of the ground.
Market research is a large part of the business planning process. It lets you review your potential customers, as well as the competition, in your field. By understanding both you can set price points for products or services. Sometimes, it may not make sense to start a business based on the existing competition. Other times, market research can guide you to effective marketing strategies that others lack. To have a successful business, it has to be viable. A business plan will help you determine that.
4. They Help Owners Avoid Failure
Far too often, small businesses fail. Many times, this is due to the lack of a strong business plan. There are many reasons that small businesses fail, most of which can be avoided by developing a business plan. Some of them are listed below, which can be avoided by having a business plan:
- The market doesn’t need the business’s product or service
- The business didn’t take into account the amount of capital needed
- The market is oversaturated
- The prices set by the business are too high, pushing potential customers away
Any good business plan includes information to help business owners avoid these issues.
![why is it important to have a business plan before starting a business](https://www.freshbooks.com/wp-content/uploads/2021/11/Productivity_1@2x-1280x258.png)
5. Business Plans Reduce Risk
Related to the last reason, business plans help reduce risk. A well-thought-out business plan helps reduce risky decisions. They help business owners make informed decisions based on the research they conduct. Any business owner can tell you that the most important part of their job is making critical decisions. A business plan that factors in all possible situations helps make those decisions.
Luckily, there are plenty of tools available to help you create a business plan. A simple search can lead you to helpful tools, like a business plan template . These are helpful, as they let you fill in the information as you go. Many of them provide basic instructions on how to create the business plan, as well.
If you plan on starting a business, you’ll need a business plan. They’re good for a vast number of things. Business plans help owners make informed decisions, as well as set goals and secure funding. Don’t put off putting together your business plan!
If you’re in the planning stages of your business, be sure to check out our resource hub . We have plenty of valuable resources and articles for you when you’re just getting started. Check it out today!
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20 Reasons Why You Need a Business Plan in 2024
Written by Dave Lavinsky
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What is a Business Plan?
A business plan is a document that details your business concept and strategy for growth. It provides details about your company, a competitive analysis, a market analysis, a marketing strategy to reach potential customers, and a financial plan so that you make the best possible decisions to start or grow your company. A good business plan will help you take your business idea and turn it into a tangible action plan for success.
What is the Purpose of a Business Plan?
A business plan serves as an essential tool for guiding a company’s direction and decision-making processes. Its core purpose is to provide a detailed roadmap that communicates the company’s mission and vision, long-term objectives, and tailored strategies intended to steer the business towards success. This living document plays a pivotal role in streamlining operations, achieving goals, and setting a foundation for sustained growth. The purposes of a business plan include:
- Creating an Effective Growth Strategy : It outlines a comprehensive plan that identifies clear steps and strategies for expanding the market presence and ideal customer base for the business.
- Determining Future Financial Needs : By creating financial projections, a business plan helps in understanding the capital requirements to fuel growth initiatives and sustain operations.
- Attracting Investors and Lenders : A well-crafted business plan is instrumental in drawing attention from potential investors, including angel investors and venture capitalists, by showcasing the growth potential and profitability prospects of the business.
By leveraging a business plan template , entrepreneurs can significantly enhance their ability to communicate their vision, attract necessary funding, and ensure that all stakeholders are aligned with the company’s strategic direction.
20 Reasons Why You Need a Business Plan
There are countless reasons why having a well-crafted business plan is essential to the success of any company. Here are top 20 reasons why a business plan is important:
1. To Prove That You’re Serious About Your Business
A formal business plan is necessary to show all interested parties — employees, investors, partners and yourself — that you are committed to building the business. Creating your plan forces you to think through and select the strategies that will propel your growth.
2. To Establish Business Milestones
The business plan should clearly lay out the long-term milestones that are most important to the success of your business. To paraphrase Guy Kawasaki, a milestone is something significant enough to come home and tell your spouse about (without boring him or her to death). Would you tell your spouse that you tweaked the company brochure? Probably not. But you’d certainly share the news that you launched your new website or reached $1M in annual revenues.
3. To Better Understand Your Competition
Creating the business plan forces you to analyze the competition. All companies have competition in the form of either direct or indirect competitors, and it is critical to understand your company’s competitive advantages or unique value proposition. And if you don’t currently have competitive advantages, to figure out what you must do to gain them.
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4. To Better Understand Your Customer
Why do they buy when they buy? Why don’t they when they don’t? An in-depth customer analysis is essential to a great business plan and to a successful business. Understanding your customers will not only allow you to create better products and services for them, but will allow you to more cost-effectively reach them via advertising and promotions.
5. To Enunciate Previously Unstated Assumptions
The process of actually writing a business plan helps to bring previously “hidden” assumptions to the foreground. By writing them down and assessing them, you can test them and analyze their validity. For example, you might have assumed that local retailers would carry your product; in your business plan, you could assess the results of the scenario in which this didn’t occur.
6. To Assess the Feasibility of Your Venture
How good is this opportunity? The business plan process involves researching your target market, as well as the competitive landscape, and serves as a feasibility study for the success of your venture. In some cases, the result of your business planning will be to table the venture. And it might be to go forward with a different venture that may have a better chance of long-term success.
7. To Document Your Revenue Model
How exactly will your business make money? This is a critical question to answer in writing, for yourself and your investors. Documenting the revenue model helps to address challenges and assumptions associated with the model. And upon reading your plan, others may suggest additional revenue streams to consider.
8. To Determine Your Financial Needs
Does your business need to raise funds? How much? One of the purposes of a business plan is to help you to determine exactly how much capital you need and what you will use it for. This process is essential for raising capital for business and for effectively employing the capital. It will also enable you to plan ahead, particularly if you need to raise additional funding in the future.
9. To Attract Investors
A formal business plan is the basis for financing proposals. The business plan answers investors’ questions such as: Is there a need for this product/service? What are the financial projections? What is the company’s exit strategy? While investors will generally want to meet you in person before writing you a check, in nearly all cases, they will also thoroughly review your business plan.
10. To Reduce the Risk of Pursuing the Wrong Opportunity
The process of creating the business plan helps to minimize opportunity costs. Writing the business plan helps you assess the attractiveness of this particular opportunity, versus other opportunities. So you make the best decisions.
11. To Force You to Conduct Market Research and Really Know Your Market
What are the most important trends in your industry? What are the greatest threats to your industry? Is the market growing or shrinking? What is the size of the target audience for your product/service? Creating the business plan will help you to gain a wider, deeper, and more nuanced understanding of your marketplace. And it will allow you to use this knowledge to make decisions to improve your company’s success.
12. To Attract Employees and a Management Team
To attract and retain top quality talent, a business plan is necessary. The business plan inspires employees and management that your great idea is sound and that the business is poised to achieve its strategic goals. Importantly, as you grow your company, your employees and not you will do most of the work. So getting them aligned and motivated will be key to your success.
13. To Plot Your Course and Focus Your Efforts
The business plan provides a roadmap from which to operate, and to look to for direction in times of doubt. Without a business plan, you may shift your short-term strategies constantly without a view to your long-term milestones. You wouldn’t go on a long driving trip without a map; think of your business plan as your map.
14. To Attract Partners
Partners also want to see a business plan, in order to determine whether it is worth partnering with your business. Establishing partnerships often requires time and capital, and companies will be more likely to partner with your venture if they can read a detailed information about your company.
15. To Position Your Brand
Creating the business plan helps to define your company’s role in the marketplace. This definition allows you to succinctly describe the business and position the brand to customers, investors, and partners. With the industry, customer and competitive insight you gain during the business planning process, you can best determine how to position your brand.
16. To Judge the Success of Your Business
A formal business plan allows you to compare actual operational results versus the business plan itself. In this way, it allows you to clearly see whether you have achieved your strategic, financing, and operational goals (and why you have or have not).
17. To Reposition Your Business to Deal with Changing Conditions
For example, during difficult economic conditions, if your current sales and operational models aren’t working, you can rewrite your business plan to define, try, and validate new business ideas and strategies.
18. To Document Your Marketing Plan
How are you going to reach your customers? How will you retain them? What is your advertising budget? What price will you charge? A well-documented marketing plan is essential to the growth of a business. And the marketing strategies and tactics you use will evolve each year, so revisiting your marketing plan at least annually is critical.
19. To Understand and Forecast Your Company’s Staffing Needs
After completing your business plan, you will not be surprised when you are suddenly short-handed. Rather, your business plan provides a roadmap for your staffing needs, and thus helps to ensure smoother expansion. Importantly your plan can not only help you understand your staffing needs, but ensure your timing is right as it is time consuming to recruit and train great employees.
20. To Uncover New Opportunities
Through the process of brainstorming, white-boarding and creative interviewing, you will likely see your business in a different light. As a result, you will often come up with new ideas for marketing your product/service and running your business. It’s coming up with these ideas and executing on them which is often the difference between a business that fails or just survives and one that thrives.
Make Your Business Planning Count
One of the most common reasons businesses fail is the lack of a clear, strategic plan that addresses key components of running a business. Business plans help in identifying and navigating the challenges that can derail a business’s success, including poor market analysis, inadequate financial planning, and an unclear business model. By taking the time to write a business plan, entrepreneurs can clarify their business strategy, identify potential obstacles before they arise, and establish company goals that will set you up for success.
About Growthink Since 1999, Growthink’s business plan experts have assisted thousands of clients in launching and growing their businesses, and raising more than $2.5 billion in growth financing.
Need help with your business plan?
- Speak with a professional business plan consultant from our team.
- Use our simple business plan template .
- Check out our business plan examples .
- Or, if you’re creating your own PPM, you can save time and money with Growthink’s private placement memorandum template .
- Learn more about us via our Growthink Business Plan Review page
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6 reasons why you need a business plan before starting a business
Table of Contents
1) Know the market
2) plan your growth, 3) minimise risk, 4) help guide future decisions, 5) improve as you learn more, 6) secure financing, making informed business decisions.
Sometimes success comes with luck. Otherwise, it comes with hard work and planning. If you’d like to maximise your success as you launch a business, this article is for you.
Learn six reasons you need a business plan before starting a business in this article by Countingup. If you’re new to business, a typical business plan includes research on market trends, competition analyses, customer profiles, marketing goals, logistics and operations plans, cash flow information, and an overall strategy on how they will grow.
Find out how a plan helps your business to:
- Know the market
- Plan your growth
- Minimise risk
- Help guide future decisions
- Improve as you learn more
- Secure financing
This article will cover why you should plan and how you can use these elements to build your business more effectively. If you’re ready to write a business plan instead, check out our dedicated article How to write a business plan . There we cover what sort of information is expected and useful in business plans and how to research them.
At Countingup, we want to empower new entrepreneurs to take on new challenges and be financially independent. Read on to find out more.
If you’re to be successful in business, you need to know your market and the value customers are seeking within it. However, this can potentially be a lot of information to gather and manage. Therefore, you need a business plan to centralise and summarise all the important reasons why your business is valuable.
To do this, you need to consider two main perspectives: what your customers want and what your competitors are already offering. This second question is essential as it will allow you to identify how you can be different. If you already have something of a business idea or would like to turn a side-hustle into a full-time job, you should do research to understand if your idea will be a viable business and how. This market research in your business plan should look something like the following:
From your research, you can build a detailed picture of where your business should be positioned as you launch from the market gaps you’ve identified.
As you anticipate what your business might look like in five years, you may have some ideas for milestones to hit. For example: first customer, thousandth customer, break-even financially, first £1,000 in profit, and so on. However, do you know how you’re going to reach each of them?
From the market research you’ve just completed, your business plan allows you to take various steps to use this information. Therefore, you need a business plan to maximise your growth and create specific objectives and strategies to meet this growth.
For example, if you run a craft beer business, you might aim to sell 1,000 units within your first year. Your sales objective could be achieved with a strategy to ‘Attend trade fairs and beer festivals to meet potential retailers and interested customers’. Depending on the direction you choose in providing to retailers or selling directly to customers, you can reach this objective (first 1,000 units) in very different ways.
In contrast, if you run a consultancy business in financial services or marketing, you could aim to grow your client base to 12 full-time contracts across the year. Therefore, you might plan to ‘Use social media and industry contacts to advertise to clients’ or ‘Develop your service to retain clients for longer periods and larger projects’. These goals’ methods are critically different from one another – therefore strategies for your goals will need to be relevant and focused.
Once you’ve taken steps to meet these objectives, you can use your business plan to track your progress and identify where you still need to develop your business. With these formalised goals and methods, you can grow your business faster than entrepreneurs who don’t plan.
Another direction in which to focus market research within your business plan is towards identifying vulnerabilities. Each business has fragile areas where they are threatened. Therefore, you need a business plan to protect weak points and avoid excessive risk sources.
From the SWOT analysis (strengths, weaknesses, opportunities and threats) included in your business plan, you can highlight areas that may need more proactive management and back-up plans in case something goes wrong. For example, this can be recognising whether your business idea is patentable, if external factors are driving up costs for consumers or if customer interest is a fading trend. Each of these threats and weaknesses presents vastly different problems to your business. Therefore, each will also need suitable methods to address them.
As you’re looking to start, having this awareness can mean you can anticipate problems ahead of time. Depending on the severity of these issues, you can take steps to cushion any damage or preserve your profits entirely. Without this insight, you leave yourself open to threats you were able to anticipate and mitigate but didn’t manage to – a critical oversight for any business owner.
On balance, having this awareness of weaknesses and threats can be more important than your opportunities, as you’ll be aware of steps to avoid and what to look out for. Therefore, outline threats to your business’ future to protect it.
Unfortunately, even the best plans have blindspots and circumstances where they’re of limited use. Therefore, you need a business plan to navigate uncertain futures.
Your market research is a snapshot of the market at one point in time. Therefore, the information, objectives and strategies you create are only useful for a certain period after this. If something changes in the market or some element of your business no longer works, you can still fall back on other parts of your business plan without having to start from scratch.
For example, as you build your business, you can revisit future objectives and decide whether your currently available options can still meet them. If they do, and you’re able to stay on target for your goals, you can grow your business in the direction you initially planned. However, where your plan hasn’t worked out, you’ll need to decide to the best of your ability.
Navigating these future scenarios with updated information is especially important as you balance the short and long-term priorities of growing your business. For example, do you want to take more money to compensate yourself or reinvest a higher proportion of your profits in the hopes of growth later on?
Even if you’ve planned to reinvest every penny for the first 5 years, maybe something in your personal life has meant you need to support yourself.
Some critical information to look out for as your business plan evolves includes:
- Demand lower than predicted
- Cash flow issues due to poor forecasting
- Not enough differentiation from competitors
- Prices too high or too low for the industry to be sustainable
As the months and years pass by while you trade and grow your business, you can update your plan with more insight. Therefore, you need a business plan to improve your business.
As an example, in some instances, a manufacturing process is harder than anticipated or a planned funding source isn’t available. Here, you can adapt your growth strategies based on this new information and update your plan to be more pragmatic and accurate. Similarly, if you find that certain marketing strategies don’t work, you can rule out certain business strategies in the future to expand your business with more confidence.
There would be little point in planning a course of action for your business, facing difficulties and then not updating your plan with a new direction. This would risk your business being disorganised and ineffective in its growth.
Even if your initial plans and growth strategies go the way you planned, at a certain point, your plan will expire anyway. This is because you can only plan so much on a single market snapshot. Therefore, you can use the experience you gain with time from growing your business to fine-tune your plans. This will make sure your business is always performing at its best within an evolving marketplace.
Finally, investors and lenders want to see entrepreneurs with a good understanding of what they offer to customers and a clear vision of how to grow their business. Therefore, you need a business plan to help convince other people that your business has value and potential.
When seeking funding, having a business plan to share with potential investors and lenders is sometimes a requirement as they’ll want to evaluate your claims more critically. While they may not be familiar with every business plan they come across, they may know more about typical business growth patterns and will be able to spot poor research or naive expectations.
Therefore, having a detailed and realistic business outline can help your plan withstand their criticism and robustly show your growth potential. Similarly, if you’re considering an exit strategy to sell your business in the future, a business plan may be needed to secure a higher valuation.
If you’d like to know more about communicating your business’s value and plan to secure funding, read our dedicated article How to present a business plan to potential investors .
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15 min. read
Updated November 3, 2023
- 1. What kind of person makes a successful entrepreneur?
Research of successful entrepreneurs has documented that successful small business people have certain common characteristics. This checklist cannot predict success, but it can give you an idea of whether you will have a head start or a handicap with which to work.
How do you measure up? Ask yourself these questions:
- Can I persevere through tough times?
- Do I have a strong desire to be my own boss?
- Do the judgments I make in life regularly turn out well?
- Do I have an ability to conceptualize the whole of a business?
- Do I possess the high level of energy that is sustainable over long hours?
- Do I have significant specialized business experience?
While not every successful business owner starts with a “yes” answer to all these questions, three or four “no” responses and undecided answers should make you think twice about going at it alone right now. But, don’t be discouraged. Seek extra training and support, and enlist the help from a skilled team of business advisors such as accountants, bankers, attorneys and SCORE counselors.
- 2. How do I determine whether I am capable of starting a business?
Small business owners have many things in common. Below are some of the qualities you will need to be successful.
- Willingness to sacrifice— If you enjoy working the nine to five, do not go into business for yourself. Entrepreneurship often requires many more hours beyond the forty-hour work week.
- Interpersonal skills— You will be required to interact with a host of people other than customers, such as lawyers, employees, and salespeople. If you do not like talking to people you do not know, it might be better to keep your day job.
- Leadership ability— You will be the one everyone turns to for the answers. Are you ready to call the shots?
- Optimism— Being able to hang in there when business gets tough is an important quality in small business owners.
Compare your skills and expertise with others who are successful in similar businesses. Can you duplicate and surpass the capability of other successful businesses? What unique skills or “edge” can you provide to obtain a sufficient share of total market?
Review business journals, trade magazines and other comparative studies that identify the requirements to operate the business. From that information, derive a formula for the skills and traits you plan to incorporate into the business operation.
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- 3. Why is a business plan important and who should write it?
A business plan is important because it summarizes both your vision for the company and your blueprint for the company’s operating success. The business plan is a written guide that details the startup and the future direction of your company.Who should write the plan? You, the entrepreneur. No one else knows your business idea and goals better. Yes, there are services that can do the work for you, however, you are the one who must present this business idea to bankers or other investors. Therefore, it is best if you are very familiar and comfortable with the plan.
Although there’s no set format, a good business plan typically includes:
- Cover page— Identifies your business
- Table of contents— Organizes information for the reader
- Executive summary— Provides a “big picture” view of the plan, highlighting the factors that will lead to success
- Business background— If it is a brand-new business, include your background and skills
- Marketing plan— Relates the business’s marketing strategy
- Action plan— Summarizes how you will create and deliver your product or service
- Financial statements and projections— Illustrates how the business will perform financially based on the plan’s assumptions
- Appendix— Includes statistical analyses, marketing materials, and résumés.
- 4. If I am not planning to apply for a bank loan, why do I need a business plan?
The fact that a bank or lending institution requires a well-executed business plan is a secondary consideration. The primary purpose of the business plan is to guide the owner or manager in successfully operating the business. Preparing the plan forces the writer to consider all aspects of the business and to confront any problems the plan highlights. For example, a monthly compilation of all known costs, over time, will indicate the revenue necessary to support these costs, plus a profit. This leads to the question of whether or not this revenue number is reasonable. If not, it may cast doubt on the viability of the venture itself. The business plan is a vital management tool that enables the manager to anticipate situations before they become problems — or worse yet, emergencies.
- 5. How do I determine my startup costs and other expenses?
It is wise to find out what startup costs you will incur before starting the business. Many a budding entrepreneur takes his or her life savings, or will borrow on the equity on their home before figuring these financial factors, only to find that they don’t have enough money. There are many web sites and other resources (including SCORE offices and Business Information Centers) that provide guidelines and worksheets to help determine costs for your business. Each item on your proposed budget sheet should be researched. Closely estimated costs can be obtained from utility companies, trade associations, and networking with other business people who may have already gone through this experience. Do not start buying until the investigation shows this venture is viable and you have all the information needed.
- 6. What do I need to know about financial statements?
First, you need to know which financial statements are important. They are:
- Balance Sheet—shows the financial conditions of your business at a point in time
- Statement of Operations (Profit and Loss Statement)—shows whether you made a profit during a specific period of time
- Cash Flow Statement—shows what happened to your cash position during a specific period of time
You should have a basic understanding of each of these statements. When compared with statements from prior periods, you can determine whether something is happening in your business that needs your special attention.
Your accountant can prepare these statements for you from the business data that you supply. There are also a number of computer software programs that will help you generate these statements from your input of regular transactions—such as sales, collections, purchases, payments and payroll.
A SCORE counselor can help you understand these statements and may be able to direct you to a workshop on this subject. In addition, most community and business colleges teach courses in financial statement analysis.
- 7. Why is it important to do a monthly cash flow analysis?
Your businesses cash-flow cycle may differ substantially from the income statement projections. Even if the projected income statement shows a profit, it is possible that the cash flow for the same period is actually negative.The analysis of monthly cash flow can indicate whether your business will collect sufficient cash to pay operating expenses. It will point out specific months during the year when the business may experience operating cash shortfalls and, therefore, either require additional capital or excess cash reserves for payment of expenses. It will also show when you may be able to make debt reductions and when there is excess cash to make major purchases or expand operations. By developing a monthly cash flow projection, you can time cash needs and quantify the amount needed. The cash flow projection is an important management tool and must be developed with very realistic expectations. Sufficient cash is critical for a business to pay its expenses and to enable it to expand. If your monthly cash flow projections indicate frequent cash shortfalls, you should review the type of products and services that you offer, the mix of sales, the pricing and terms of the sale, and your short-term borrowing needs.
- 8. How can I obtain cash to maintain and grow my business?
Develop a positive business relationship with your bank. Seek your banker’s advice even at times where you are not seeking funds. You may find that every time you go to your bank you speak to a different loan officer, so you should know them all.When the loan officer gets a promotion, you must start all over again with another person. If you want the bank to take an interest in your business, then you have to take an interest in theirs. How?
- Know your banker— Take an interest in your banker as a person. Ask your banker to hold on to your account if he or she is promoted. When you go to see your banker, have your business plan and financial papers ready. Make it easy for your banker to see what you want and why. The bank wants to minimize its risk with regard to you and your business. This is where you have to sell yourself.
- Know your bank— Know and understand your bank’s annual report. Know your bank’s business direction and plan. Know the bank’s lines of authority. Get on the bank’s mailing list. It’s an easy way to keep up with bank news.
- Go to a bank-sponsored seminar— Go to your bank’s seminars on commercial lending. This will teach you how your bank operates in terms of lending policies. By doing this, you also prove that you have an interest in what the bank is doing. Finally, it affords you the opportunity to meet and make an impression on the loan committee.
- 9. Why is location the most important aspect of my business?
A good location can make the difference between a profitable and a bankrupt business. There are many questions to consider when choosing a business site. Use the questions below as a checklist for potential locations and then compare several sites.
- Are there parking facilities?
- Is transportation available and convenient?
- Is the quality of police and fire service adequate?
- Will it be a quality site for the future—not just five years from now, but in 10, or 25 years?
- Is nearby housing readily available for management and employees?
- Is there nearby competition? Are those sites better or worse than yours?
- What is the general business climate in the area? Is this a prosperous market?
- Are merchandise and raw materials available? Are your suppliers easily accessible?
- How is the traffic flow—can your customers reach you quickly and inexpensively?
- Is your building suitable to your kind of business—will it need any major renovations?
- Is there an adequate community infrastructure for utilities (sewer, water, power, gas, etc.)?
- What is the tax burden—town, city, county, state? Will this impede your business and growth?
- What are the costs of operation in this location—will it be too high to offer you an adequate profit?
- 10. Why is competition important?
No business operates without direct competition. There also may be indirect competition, which has a significant impact on customer’s buying decisions in your market. Direct and non-direct competitors try to convince customers to buy their products or services instead of yours. It is in your best interest to learn more about the companies that are trying to reduce your take-home pay. List the strengths and weaknesses of each competitor. Talk with friends, visit your competition, call for information about their products and analyze how they advertise. Next, take a sheet of paper and list the major competitors. Give each a rating, on a scale of one to 10, for product quality, process, advertising, price and customer satisfaction. You can add other ratings that you feel are important.Your business can become more profitable by adopting practices you admire in competitor operations and by avoiding their mistakes. Some of your competitors have been in business successfully for many years. Certainly, as a new or relatively new business, you can learn a lot from them.
- 11. How can I better market my business?
To market your business, you must define your customer. To maintain consistent sales growth, you must become knowledgeable about your market. Develop an outline of your “typical” consumer:
- What exactly is your market?
- Where do the consumers come from (i.e. city centers, suburbs, tourists, international)?
- What are customers buying patterns?
- Why should they buy from you? Factors could include convenience, price, quality, service, etc.
- Should you try to appeal to a niche market segment or the entire market?
- Have you missed a new customer segment or special market?
- How large is the potential target market (in units or dollars)? Is it growing, stable or decreasing? What percentage of the market do you have?
Research will provide answers that are not available from your business records and a financial analysis. Conduct research through trade associations, your local chamber of commerce, libraries or even ask for the help of a SCORE counselor. Pay attention to how competitors market to their customers. Perhaps, some of their marketing strategies can be adopted for your business, or you may find examples of what not to do.
- 12. What makes a successful marketing strategy?
When creating a marketing strategy, keep in mind the four P’s of marketing:
- Product— What good or service will your business offer? How is that product better than those offered by competitors? Why will people buy/want it?
- Price— How much can you charge? How do you find the balance between sales volume and price to maximize income?
- Promotion— How will your product or service be positioned in the marketplace? Will your product carry a premium image with a price to match? Will it be an inexpensive, no-frills alternative to similar offerings from other businesses? What kinds of advertising and packaging will you use?
- Place— Which sales channels will you use? Will you sell by telephone, or will your product be carried in retail outlets? Which channel will economically reach your market?
The marketing strategy should summarize your findings about the key target buyer description, market segments the company will compete in, the unique positioning of the company and its products compared to the competition, the reasons why it is unique or compelling to buyers, etc.
- 13. What do I need to know before creating a marketing brochure?
A marketing brochure can be long-lasting or short-term. It can represent your business to potential customers and it can be a referral piece for existing customers. Decide the purpose of and goals for the marketing brochure before you begin to design and write. Remember, this brochure represents you and your business, so be sure its look and feel complements your business.
Here are few tips for when you are ready to begin:
- State your message up front—T he selling message should appear on the cover of the brochure. For instance, “The XYZ Company—Consultants on Doing Business Overseas.”
- Include artwork— If you have space limitations, one large photograph or graphic is better than several small images that might not clearly portray your services or products.
- Photo captions— Photo captions are read twice as often as the main copy.
- Create a keeper— Make your brochure worth keeping. Include a calendar of events in your specific industry or some data that will be useful to potential clients in the future.
- Quality is key— Your publications reflect you and your business. Using one to four colors in the brochure will make it stand out over one that is black and white. A good quality paper stock is also important (and comes in many colors and shades if you choose to use black ink). Remember to consider the weight of the paper stock in relationship to mailing costs.
It is wise to have your brochure professionally designed. Even if you have computer graphic skills, design is best left to professionals.
- 14. How can I improve customer service in my business?
Develop a strategy that puts the customer first. Customers will receive the best possible service when employees are empowered to make this happen. This is not to say that you should be lenient with your policies, but have a degree of flexibility. Just remember, a lost customer could spread the word of their discontent, resulting in more lost customers.Review the most common reasons for poor customer service. Use these insights as a way to improve your customer service:
- Too many rules— Employees lack creativity in problem solving. Rules are followed and good solutions are not developed because employees do not want to jeopardize their jobs.
- Lip service, not customer service— Customer service is really only a name for customer complaints. Time is spent trying to fix problems rather than preventing them from occurring in the first place.
- Unempowered employees— Approval is needed by a manager for small problems that can easily be solved by a good employee. This problem leads to long lines and time-consuming waits by the customer, who then refuses to come back-business operations turns a small problem into a large one.
- Unmotivated employees— Personnel are not encouraged to please the customer because there is no merit in it for them.
- Bad communication— Coordination of functions does not exist-one person may write an order while another picks it off a warehouse shelf and someone else delivers it to the customer. This can result in miscommunication, incorrect goods or services, and time delays.
- Arbitrary policies— Policies that are followed blindly without room for situational allowances may result in angry customers. For example, a store’s return policy of 30 days prevents a customer who, with good reason, could not get back to the store in time from receiving a refund. That customer will refuse to do business there anymore.
- 15. Is there anyone who can answer questions specific to my business?
SCORE “Counselors to America’s Small Business” provides free and confidential business advice and mentoring services to entrepreneurs nationwide. SCORE is a nonprofit association consisting of 10,500 business counselors who donate their time and business expertise to guide small businesses via face-to-face mentoring or online counseling.SCORE, a resource partner with the U.S. Small Business Administration (SBA), has assisted millions of start-up and growing businesses since 1964.
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How To Start A Business In 11 Steps (2024 Guide)
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Before you begin: get in the right mindset, 1. determine your business concept, 2. research your competitors and market, 3. create your business plan, 4. choose your business structure, 5. register your business and get licenses, 6. get your finances in order, 7. fund your business, 8. apply for business insurance, 9. get the right business tools, 10. market your business, 11. scale your business, what are the best states to start a business, bottom line, frequently asked questions (faqs).
Starting a business is one of the most exciting and rewarding experiences you can have. But where do you begin? There are several ways to approach creating a business, along with many important considerations. To help take the guesswork out of the process and improve your chances of success, follow our comprehensive guide on how to start a business. We’ll walk you through each step of the process, from defining your business idea to registering, launching and growing your business .
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The public often hears about overnight successes because they make for a great headline. However, it’s rarely that simple—they don’t see the years of dreaming, building and positioning before a big public launch. For this reason, remember to focus on your business journey and don’t measure your success against someone else’s.
Consistency Is Key
New business owners tend to feed off their motivation initially but get frustrated when that motivation wanes. This is why it’s essential to create habits and follow routines that power you through when motivation goes away.
Take the Next Step
Some business owners dive in headfirst without looking and make things up as they go along. Then, there are business owners who stay stuck in analysis paralysis and never start. Perhaps you’re a mixture of the two—and that’s right where you need to be. The best way to accomplish any business or personal goal is to write out every possible step it takes to achieve the goal. Then, order those steps by what needs to happen first. Some steps may take minutes while others take a long time. The point is to always take the next step.
Most business advice tells you to monetize what you love, but it misses two other very important elements: it needs to be profitable and something you’re good at. For example, you may love music, but how viable is your business idea if you’re not a great singer or songwriter? Maybe you love making soap and want to open a soap shop in your small town that already has three close by—it won’t be easy to corner the market when you’re creating the same product as other nearby stores.
If you don’t have a firm idea of what your business will entail, ask yourself the following questions:
- What do you love to do?
- What do you hate to do?
- Can you think of something that would make those things easier?
- What are you good at?
- What do others come to you for advice about?
- If you were given ten minutes to give a five-minute speech on any topic, what would it be?
- What’s something you’ve always wanted to do, but lacked resources for?
These questions can lead you to an idea for your business. If you already have an idea, they might help you expand it. Once you have your idea, measure it against whether you’re good at it and if it’s profitable.
Your business idea also doesn’t have to be the next Scrub Daddy or Squatty Potty. Instead, you can take an existing product and improve upon it. You can also sell a digital product so there’s little overhead.
What Kind of Business Should You Start?
Before you choose the type of business to start, there are some key things to consider:
- What type of funding do you have?
- How much time do you have to invest in your business?
- Do you prefer to work from home or at an office or workshop?
- What interests and passions do you have?
- Can you sell information (such as a course), rather than a product?
- What skills or expertise do you have?
- How fast do you need to scale your business?
- What kind of support do you have to start your business?
- Are you partnering with someone else?
- Does the franchise model make more sense to you?
Consider Popular Business Ideas
Not sure what business to start? Consider one of these popular business ideas:
- Start a Franchise
- Start a Blog
- Start an Online Store
- Start a Dropshipping Business
- Start a Cleaning Business
- Start a Bookkeeping Business
- Start a Clothing Business
- Start a Landscaping Business
- Start a Consulting Business
- Start a Photography Business
- Start a Vending Machine Business
Most entrepreneurs spend more time on their products than they do getting to know the competition. If you ever apply for outside funding, the potential lender or partner wants to know: what sets you (or your business idea) apart? If market analysis indicates your product or service is saturated in your area, see if you can think of a different approach. Take housekeeping, for example—rather than general cleaning services, you might specialize in homes with pets or focus on garage cleanups.
Primary Research
The first stage of any competition study is primary research, which entails obtaining data directly from potential customers rather than basing your conclusions on past data. You can use questionnaires, surveys and interviews to learn what consumers want. Surveying friends and family isn’t recommended unless they’re your target market. People who say they’d buy something and people who do are very different. The last thing you want is to take so much stock in what they say, create the product and flop when you try to sell it because all of the people who said they’d buy it don’t because the product isn’t something they’d buy.
Secondary Research
Utilize existing sources of information, such as census data, to gather information when you do secondary research. The current data may be studied, compiled and analyzed in various ways that are appropriate for your needs but it may not be as detailed as primary research.
Conduct a SWOT Analysis
SWOT stands for strengths, weaknesses, opportunities and threats. Conducting a SWOT analysis allows you to look at the facts about how your product or idea might perform if taken to market, and it can also help you make decisions about the direction of your idea. Your business idea might have some weaknesses that you hadn’t considered or there may be some opportunities to improve on a competitor’s product.
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Asking pertinent questions during a SWOT analysis can help you identify and address weaknesses before they tank your new business.
A business plan is a dynamic document that serves as a roadmap for establishing a new business. This document makes it simple for potential investors, financial institutions and company management to understand and absorb. Even if you intend to self-finance, a business plan can help you flesh out your idea and spot potential problems. When writing a well-rounded business plan, include the following sections:
- Executive summary: The executive summary should be the first item in the business plan, but it should be written last. It describes the proposed new business and highlights the goals of the company and the methods to achieve them.
- Company description: The company description covers what problems your product or service solves and why your business or idea is best. For example, maybe your background is in molecular engineering, and you’ve used that background to create a new type of athletic wear—you have the proper credentials to make the best material.
- Market analysis: This section of the business plan analyzes how well a company is positioned against its competitors. The market analysis should include target market, segmentation analysis, market size, growth rate, trends and a competitive environment assessment.
- Organization and structure: Write about the type of business organization you expect, what risk management strategies you propose and who will staff the management team. What are their qualifications? Will your business be a single-member limited liability company (LLC) or a corporation ?
- Mission and goals: This section should contain a brief mission statement and detail what the business wishes to accomplish and the steps to get there. These goals should be SMART (specific, measurable, action-orientated, realistic and time-bound).
- Products or services: This section describes how your business will operate. It includes what products you’ll offer to consumers at the beginning of the business, how they compare to existing competitors, how much your products cost, who will be responsible for creating the products, how you’ll source materials and how much they cost to make.
- Background summary: This portion of the business plan is the most time-consuming to write. Compile and summarize any data, articles and research studies on trends that could positively and negatively affect your business or industry.
- Marketing plan: The marketing plan identifies the characteristics of your product or service, summarizes the SWOT analysis and analyzes competitors. It also discusses how you’ll promote your business, how much money will be spent on marketing and how long the campaign is expected to last.
- Financial plan: The financial plan is perhaps the core of the business plan because, without money, the business will not move forward. Include a proposed budget in your financial plan along with projected financial statements, such as an income statement, a balance sheet and a statement of cash flows. Usually, five years of projected financial statements are acceptable. This section is also where you should include your funding request if you’re looking for outside funding.
Learn more: Download our free simple business plan template .
Come Up With an Exit Strategy
An exit strategy is important for any business that is seeking funding because it outlines how you’ll sell the company or transfer ownership if you decide to retire or move on to other projects. An exit strategy also allows you to get the most value out of your business when it’s time to sell. There are a few different options for exiting a business, and the best option for you depends on your goals and circumstances.
The most common exit strategies are:
- Selling the business to another party
- Passing the business down to family members
- Liquidating the business assets
- Closing the doors and walking away
Develop a Scalable Business Model
As your small business grows, it’s important to have a scalable business model so that you can accommodate additional customers without incurring additional costs. A scalable business model is one that can be replicated easily to serve more customers without a significant increase in expenses.
Some common scalable business models are:
- Subscription-based businesses
- Businesses that sell digital products
- Franchise businesses
- Network marketing businesses
Start Planning for Taxes
One of the most important things to do when starting a small business is to start planning for taxes. Taxes can be complex, and there are several different types of taxes you may be liable for, including income tax, self-employment tax, sales tax and property tax. Depending on the type of business you’re operating, you may also be required to pay other taxes, such as payroll tax or unemployment tax.
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When structuring your business, it’s essential to consider how each structure impacts the amount of taxes you owe, daily operations and whether your personal assets are at risk.
An LLC limits your personal liability for business debts. LLCs can be owned by one or more people or companies and must include a registered agent . These owners are referred to as members.
- LLCs offer liability protection for the owners
- They’re one of the easiest business entities to set up
- You can have a single-member LLC
- You may be required to file additional paperwork with your state on a regular basis
- LLCs can’t issue stock
- You’ll need to pay annual filing fees to your state
Limited Liability Partnership (LLP)
An LLP is similar to an LLC but is typically used for licensed business professionals such as an attorney or accountant. These arrangements require a partnership agreement.
- Partners have limited liability for the debts and actions of the LLP
- LLPs are easy to form and don’t require much paperwork
- There’s no limit to the number of partners in an LLP
- Partners are required to actively take part in the business
- LLPs can’t issue stock
- All partners are personally liable for any malpractice claims against the business
Sole Proprietorship
If you start a solo business, you might consider a sole proprietorship . The company and the owner, for legal and tax purposes, are considered the same. The business owner assumes liability for the business. So, if the business fails, the owner is personally and financially responsible for all business debts.
- Sole proprietorships are easy to form
- There’s no need to file additional paperwork with your state
- You’re in complete control of the business
- You’re personally liable for all business debts
- It can be difficult to raise money for a sole proprietorship
- The business may have a limited lifespan
Corporation
A corporation limits your personal liability for business debts just as an LLC does. A corporation can be taxed as a C corporation (C-corp) or an S corporation (S-corp). S-corp status offers pass-through taxation to small corporations that meet certain IRS requirements. Larger companies and startups hoping to attract venture capital are usually taxed as C-corps.
- Corporations offer liability protection for the owners
- The life span of a corporation is not limited
- A corporation can have an unlimited number of shareholders
- Corporations are subject to double taxation
- They’re more expensive and complicated to set up than other business structures
- The shareholders may have limited liability
Before you decide on a business structure, discuss your situation with a small business accountant and possibly an attorney, as each business type has different tax treatments that could affect your bottom line.
Helpful Resources
- How To Set Up an LLC in 7 Steps
- How To Start a Sole Proprietorship
- How To Start a Corporation
- How To Start a Nonprofit
- How To Start a 501(c)(3)
There are several legal issues to address when starting a business after choosing the business structure. The following is a good checklist of items to consider when establishing your business:
Choose Your Business Name
Make it memorable but not too difficult. Choose the same domain name, if available, to establish your internet presence. A business name cannot be the same as another registered company in your state, nor can it infringe on another trademark or service mark that is already registered with the United States Patent and Trademark Office (USPTO).
Business Name vs. DBA
There are business names, and then there are fictitious business names known as “Doing Business As” or DBA. You may need to file a DBA if you’re operating under a name that’s different from the legal name of your business. For example, “Mike’s Bike Shop” is doing business as “Mike’s Bikes.” The legal name of the business is “Mike’s Bike Shop,” and “Mike’s Bikes” is the DBA.
You may need to file a DBA with your state, county or city government offices. The benefits of a DBA include:
- It can help you open a business bank account under your business name
- A DBA can be used as a “trade name” to brand your products or services
- A DBA can be used to get a business license
Register Your Business and Obtain an EIN
You’ll officially create a corporation, LLC or other business entity by filing forms with your state’s business agency―usually the Secretary of State. As part of this process, you’ll need to choose a registered agent to accept legal documents on behalf of your business. You’ll also pay a filing fee. The state will send you a certificate that you can use to apply for licenses, a tax identification number (TIN) and business bank accounts.
Next, apply for an employer identification number (EIN) . All businesses, other than sole proprietorships with no employees, must have a federal employer identification number. Submit your application to the IRS and you’ll typically receive your number in minutes.
Get Appropriate Licenses and Permits
Legal requirements are determined by your industry and jurisdiction. Most businesses need a mixture of local, state and federal licenses to operate. Check with your local government office (and even an attorney) for licensing information tailored to your area.
- Best LLC Services
- How To Register a Business Name
- How To Register a DBA
- How To Get an EIN for an LLC
- How To Get a Business License
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Open a Business Bank Account
Keep your business and personal finances separate. Here’s how to choose a business checking account —and why separate business accounts are essential. When you open a business bank account, you’ll need to provide your business name and your business tax identification number (EIN). This business bank account can be used for your business transactions, such as paying suppliers or invoicing customers. Most times, a bank will require a separate business bank account to issue a business loan or line of credit.
Hire a Bookkeeper or Get Accounting Software
If you sell a product, you need an inventory function in your accounting software to manage and track inventory. The software should have ledger and journal entries and the ability to generate financial statements.
Some software programs double as bookkeeping tools. These often include features such as check writing and managing receivables and payables. You can also use this software to track your income and expenses, generate invoices, run reports and calculate taxes.
There are many bookkeeping services available that can do all of this for you, and more. These services can be accessed online from any computer or mobile device and often include features such as bank reconciliation and invoicing. Check out the best accounting software for small business, or see if you want to handle the bookkeeping yourself.
Determine Your Break-Even Point
Before you fund your business, you must get an idea of your startup costs. To determine these, make a list of all the physical supplies you need, estimate the cost of any professional services you will require, determine the price of any licenses or permits required to operate and calculate the cost of office space or other real estate. Add in the costs of payroll and benefits, if applicable.
Businesses can take years to turn a profit, so it’s better to overestimate the startup costs and have too much money than too little. Many experts recommend having enough cash on hand to cover six months of operating expenses.
When you know how much you need to get started with your business, you need to know the point at which your business makes money. This figure is your break-even point.
In contrast, the contribution margin = total sales revenue – cost to make product
For example, let’s say you’re starting a small business that sells miniature birdhouses for fairy gardens. You have determined that it will cost you $500 in startup costs. Your variable costs are $0.40 per birdhouse produced, and you sell them for $1.50 each.
Let’s write these out so it’s easy to follow:
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Build a strategy. 4. Crafts a roadmap to achieve important milestones. A business plan is like a roadmap for your business. It helps you set, track and reach business milestones. For your plan to function in this way, your business plan should first outline your company's short- and long-term goals.
Why a business plan is important for entrepreneurs There are many reasons why it is important for entrepreneurs to have a business plan. A few of these reasons include: It puts a plan in place when starting a new business A lot goes into starting a new business. In addition to coming up with a business idea, you also need to solidify the ...
Here are 5 reasons why you need a business plan: 1. 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 ...
To outline the importance of business plans and make the process sound less daunting, here are 10 reasons why you need one for your small business. 1. To help you with critical decisions. The primary importance of a business plan is that they help you make better decisions. Entrepreneurship is often an endless exercise in decision making and ...
12. You can use information in the plan when you need cash. Seek investment for a business no matter what stage of growth the business finds itself in. Investors need to see a business plan before ...
Business Plan: A business plan is a written document that describes in detail how a business, usually a new one, is going to achieve its goals. A business plan lays out a written plan from a ...
Six Reasons You Really Need To Write a Business Plan. Legitimize your business idea. Give your business a foundation for success. Obtain funding and investments. Hire the right people. Communicate your needs. It makes it easier to sell your business. 1. Legitimize your business idea.
For example, if someone is purchasing a failing business, the business plan should explain why the business is being purchased. It should also include: What the new owner will do to turn the business around. Historic business metrics. Sales projections after the acquisition. Justification for those projections. 6. Business Repositioning Plan
In business, you do not want to wing it. You want a plan -- a document that lays out the path of your company for the next three to five years so you can see the route to your goals and know ...
Although a typical business plan falls between 15 to 30 pages, some companies opt for the much shorter One-Page Business Plan. A one-page business plan is a simplified version of the larger business plan, and it focuses on the problem your product or service is solving, the solution (your product), and your business model (how you'll make money).
The purpose of a business plan is to help articulate a strategy for starting your business. It also provides insight on steps to be taken, resources required for achieving your business goals and a timeline of anticipated results. In fact, businesses that plan grow 30% faster than those that don't. 1. For existing small businesses, a business ...
A business plan contains detailed information that can help determine its success. Some of this information can include the following: Market analysis. Cash flow projection. Competitive analysis. Financial statements and financial projections. An operating plan. A solid business plan is a good way to attract potential investors.
10. To Reduce the Risk of Pursuing the Wrong Opportunity. The process of creating the business plan helps to minimize opportunity costs. Writing the business plan helps you assess the attractiveness of this particular opportunity, versus other opportunities. So you make the best decisions.
3) Minimise risk. Another direction in which to focus market research within your business plan is towards identifying vulnerabilities. Each business has fragile areas where they are threatened. Therefore, you need a business plan to protect weak points and avoid excessive risk sources.
Know your banker— Take an interest in your banker as a person. Ask your banker to hold on to your account if he or she is promoted. When you go to see your banker, have your business plan and financial papers ready. Make it easy for your banker to see what you want and why.
A business plan can help you present your ideas to secure funding. If you apply for a business loan, you may require a thorough business plan to demonstrate your idea to the bank. A business plan can also help you determine how much money you require to establish and operate the business.
The best way to accomplish any business or personal goal is to write out every possible step it takes to achieve the goal. Then, order those steps by what needs to happen first. Some steps may ...
A business plan is the blueprint for your business. Starting a business without a business plan is like building a house without a blueprint. Yet, unlike a house, a business isn't static. We often make the mistake of thinking of a business plan as a single document that you put together once when you're starting out and never touch again.
Starting a business is a big undertaking that requires ample preparation. Take these key steps before you begin your business venture. 1. Identify a creative idea. Think of a business idea as the seed of your company. You need that before you can begin adding fertilizer, watering and growing complementary plants.
Starting a business involves many tasks and obstacles, so it's important to focus before you take action. A solid business plan can provide direction, help you attract investors and ensure you maintain momentum. No matter what industry you plan on going into, a business plan is the first step for any successful enterprise.
A business plan is the best, and generally, the only acceptable way to provide this information. 2. A Business Plan Helps You Make Decisions. There are some sections in a traditional business plan that you simply cannot complete if you are on the fence, undecided, or not fully committed to a certain point. Business plans help you eliminate the ...
8. Develop new business alliances. Use your plan to set targets for new alliances, and selected portions of your plan to communicate with those alliances. 7. Deal with professionals. Share ...
A business plan is a communication tool that you can use to secure investment capital from financial institutions or lenders. You can also use it to convince people to work for your enterprise, secure credit from suppliers, and to attract potential customers. Creating a business plan involves a lot of thought. You need to consider what you want ...
As the world of business has gotten less formal and the pace at which startups come to market has sped up, many entrepreneurs have begun to question whether a business plan is necessary anymore or ...
Researching your competition can also bring partnership opportunities like a bundle promotion or a local street fair or festival. 19. Record keeping. Before you start your business, make a plan to record your sales, income, expenses and operation costs. Staying organized can help you track your budget and file taxes.
Starting a business doesn't have to cost a lot of money. The most important thing you need is a good idea for how to deliver an in-demand product, or how to deliver a lucrative service that solves ...
But in the years since then, it became one of the most important rulings on federal administrative law, cited by federal courts more than 18,000 times. ... to consider overruling Chevron before they agreed last year to take up a pair of challenges to a rule issued by the National Marine Fisheries Service. The agency had required the herring ...
Many Americans don't have life insurance, and half of those who do, don't have enough. According to a study from Global Atlantic Financial Group , 43% of Americans don't have life insurance.
A part of the SAVE plan that would have cut monthly bills for millions of borrowers starting on July 1 was put on hold. By Tara Siegel Bernard and Zach Montague Two federal judges in Kansas and ...
Sir Keir Starmer and Rishi Sunak are beginning a frantic final few days of campaigning before the polls open on Thursday, but one Tory minister tells Sky's Sophy Ridge the election is a foregone ...