Roadmap for business: 5 reasons to write a business plan
When you first decided to open your own business, your first thought probably wasn’t to lay out a detailed roadmap. You might have envisioned your restaurant full of customers enjoying your daring cuisine. Or you might have pictured yourself splitting time between job sites to oversee your employee’s construction.
Of course, a lot of work comes between the idea and reality. Everything from choosing a company name to setting up digital platforms is building your company’s foundation. Starting a business also comes with a long list of administrative tasks. You need to register your company, file for an EIN, and apply for permits and licenses.
However, one of the most important steps you can take during this time is writing a business plan. There are many reasons to write a business plan, and taking the time to do so can help set your business up for success. A business plan has several benefits before a business is open and after it's established.
#1 - A business plan can provide extra clarity
Writing a business plan provides business owners and potential business owners with time to prove their idea. It's an opportunity to think through the concept of their business thoroughly. Elements like the market analysis and the products and services section help clarify complex issues.
You must research and decide on details as you write your business plan. These things become less abstract when you discuss the market or think through the product or service process. Then, these concepts become more concrete. With more defined details, it’s also easier for you to pull relevant data and make informed decisions.
#2 - A business plan helps you get funding or financing
A business plan can also provide clarity for potential investors or lenders. Plans often contain at least some high-level view of your pricing strategy or revenue model. Potential lenders can also be assured that you have good standing to be able to pay back a loan. Financial sections of business plans can contain vital projections and statements. These can help investors or potential partners feel confident in your business. They'll be able to track your project and see proof of return on their investment.
| According to the Small Business Administration, one of the most common reasons businesses fail is a lack of planning. You can set yourself up for success with a solid business plan.
#3 - A business plan serves your business for years into the future
A thorough business plan is more than an originating document. It will guide you through the beginning stages and well into the management of your business. In fact, you can think of it a bit like a roadmap. You’ll be able to guide your company through major milestones based on its markers.
You’ll establish your company’s structure, open the doors for the first day of business, and create plans for continued growth. The business plan will lay out the steps for all of these things. It means you’ll also have a way to track your own progress against the goals and milestones you laid out. Also, it means you’ll have a broader perspective of your business, which can help your decision-making. This can make planning more manageable because you’ve already thought through many key elements that will drive your business.
#4 - A business plan is your first marketing tool
Your business plan is a space where you think through many aspects of your business, including what’s great about it. In fact, you’ll probably include a section about your marketing strategy. This allows you to think about what market segments you’ll be pursuing and how you’ll begin building that awareness.
Having a clear sense of your product or service’s value to the customer gives you a head start in marketing. Being able to communicate that value will also help you sell your idea to more than just customers. If you can demonstrate the viability of your idea to potential investors, lenders, and partners, it benefits your business. The clearer you can make your brand positioning, the better you can position your business in your market.
#5 - A business plan gives your business a better chance at success
Writing a business plan allows you to plot out your business's high-level operational and financial objectives. The process also requires researching and writing sections that delve into more details. These include marketing plans and budget allocations. Because you’ve taken the time to think through all of these aspects of your business, you’ll have a diverse perspective. This might mean fewer unforeseen problems, and you’ll feel better prepared for whatever is in store for your business. You’ll be less likely to spend time researching or scrambling after the fact. Instead, you’ll be able to be proactive.
Don’t forget to make other plans for your business
The purpose of a business plan may be to give you a solid foundation. However, you’ll still have to take essential steps to be sure your business is running daily. That may take some planning of its own, whether you need to manage your cash flow or an advertising campaign. Plans are likely to be a massive part of running your business.
You also shouldn’t forget to include taxes in your plans. Business taxes can be complex, but ComplYant helps to make them more manageable. Sign up for a free account today, and with custom calendars and dashboards, you’ll never miss a deadline. Also, check out the webinar, Make it Easier: Tax & Legal Building Blocks for Entrepreneurs, for more tips about how to set your business up for success.