A business plan helps counterbalance your emotional response to your business so that you can step back and take an objective look at what you’re doing and why, what you know for a fact, and what you’re still trying to figure out. A business plan helps you launch faster and smarter because it gets everyone involved — partners, employees, customers and suppliers.
Execution is everything, and this means setting priorities, establishing goals and measuring performance. A business plan helps develop your game plan. What features do customers really want? How much will they pay for the product? How can you attract customers in a cost-effective and scalable manner? These things can be addressed in the business planning process.
If you raise or borrow money, you’ll need to communicate your vision in a clear, compelling way. A good business plan will help you do that. Banks and lenders may look more favorably on your application if you have a plan.
Making a business plan is a valuable exercise. You need to make sure you understand all the elements of the plan and can communicate it to your team and investors. Building a complete and credible plan is a good test of whether your venture has legs. Having a business is all about doing something you enjoy without undue stress, uncertainty and risk. However, you will never remove all uncertainties; so plan your activities in an incremental fashion, updating your plan as you learn, responding to new customers, markets and partnerships.
A business plan helps focus strategy, manage milestones and metrics, assign and track responsibilities and performance, and manage money using projections for sales, costs, expenses and cash.
A business plan is created to define a new business; support a loan application; raise equity funding; set objectives and describe programs to achieve them; evaluate a new product line, promotion or expansion; refine agreements with partners; and set a value on a business for sale or legal purposes.
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Developing and sharing a business plan can help you see if you have a viable way to make money. Click through to discover why a solid business plan can mean the difference between success and failure.