Why You Should Write A Business Plan
You’ve been running your business for a number of years and you are unsure whether or not you should write a business plan. You may have heard countless successful entrepreneurs speak of never writing a business plan. However, writing a business plan is still relevant whether you’re a startup or you have a number of years under your belt.
Here are (5) reasons you should write a business plan:
1. Helps You Get A Clear Picture Of Your Vision
In this information/’social media age, it’s very easy to get sidetracked by others’ mission if you are not clear on your own. While writing your business plan, you’re forced to ask the following questions:
- Why are you in business?
- Where do you want your business to go?
- What is the mission of your business?
- What stage of your business are you?
Depending on how you answer these questions, you will later be guided on what you should be focusing on at this point. For instance, if you are in the start-up phase your goal should be spent on marketing and building up your customer base, while getting customer feedback. Versus if you are in the mature stage of your business you should be focusing on ways you’ll build up you’re your business for your exit or perhaps to start a new product to add growth to your bottom line.
2. Helps You Share Your Vision With Interested Parties
Entrepreneurs should always have their elevator pitch ready for anyone they may just happen to meet at cocktail parties, networking events, etc. However, we all hope that those elevator pitches land on the right ears. If they do, it’s so much easier to provide them with a business plan that is already completed. This also includes financial institutions, SBA loans, grants, pitch competitions. Having a completed business plan is one less task you have to complete for that opportunity in the future.
3. Puts The Numbers Behind Your Vision
While you are writing your business plan, you are forced to think about how you will monetize your business as you look at hard numbers. During this process you think about how much money you need to make for the business to run. You also have to think about expenses that you need to pay to make your company grow. It’s hard to figure out all of this out without actually taking time to do these projections that are supported by strategy.
4. Helps You Think Of Your Exit Strategy
Unfortunately, we can’t all live forever. Your exit strategy determines how you wish to run your business. If your goal is to go public, you will most likely have to go through various Series of Funding to capitalize your company so that it will grow. However, if your goal is to have a lifestyle business, that allows you to live comfortably, bootstrapping may be more appropriate. Business planning allows you to constantly keep your end in mind.
5. Forces You To Reflect On Your Strategy
Business planning also helps you remember that you can’t do this journey alone. You will need a strategy, even if it changes, you will still need to at least have an initial strategy with a team of people to implement it. Focus on the type of strategy that will help you grow your business at the level of your projections. Also, think about the type of people you need to accomplish this task. They may initially be contract workers, but still write it down. I’ve heard of entrepreneurs using an organization chart and writing in the people they need in the future. If you make the plan, you can always be on the lookout for those individuals when they cross your path.