Those first few moments when you get that great idea for a business are absolutely priceless. If you are like me a great business idea is great fun to think about and even more fun to talk about. I can go hours talking business and marketing. To me, and many others, it’s flat-out enjoyable.
Everyone, including myself, wants to be heard during those fun and exhilarating conversations. But no one ever seems to bring along a completed and well-researched business plan. I wonder why that is?
Well, it’s not super easy for one and most people don’t know how. If you do know how then you also know how long and tedious it can be to write one. If you have written one you will find that in many cases you are the only one to ever read the whole entire thing. They are not quite as exhilarating as the happy hour conversations.
4 Reasons you Need a Business Plan
Complete Resource List – Reason 1
Provides a detailed and Complete list of everything this idea is going to take. You need this inventory of resources so you can get the real picture of how much this is going to take. You may find that your idea is not worth it. Better to discover that while writing a business plan then while writing a check from your life savings to pay off a creditor for a failing business you started prematurely.
You will be able to figure out exactly how much money you are going to need from the get go. Also, you will be able to see who you will need help from. There will be all sorts of professionals that will need to be involved.
Equipment and other goods and services such as software and office furniture will have to be planned out and accounted for.
Then once you have the internal nuts and bolts figured out you can plan out what the staff will look right and where they will work. This will be the real expensive part.
Winning over Investors and Financing – Reason 2
Allows you to create a complete, logical, and well thought out argument for funding the business.
It is not easy to get a business loan. For one most businesses fail. Investors know this. No one wants to lose their money. You have an uphill battle before you start. Thus you need to have a solid business plan with an even better pitch for investors.
Before you approach investors or lenders everything needs to be perfect about your presentation. Having a business plan will be a big part of that. Your business plan will cover 5 points of your investor relations pitch.
First, it will spell out exactly what, or rather how much, the funding you need. A close second is how long you will need it, and Third how much they will make. This is the biggie. The return on their investment. Then perhaps the most important point your business plan helps with is explaining this return. Your plan will paint a picture of success. It should tell the story of why your business is a solid necessity of today’s market, culture, and society. Your plan will paint the story of success that your business is destined to be. Finally, your plan will have all the boring details of how this will work. Once they are really wanting to get in on this idea they will be ready to look at the nuts and bolts of how this will all work and come together to make them some real money.
Uncovers Hidden Details – Reason 3
Gives way to a detailed well thought out blueprint of how you can best make this idea work rather than blindly starting and messing it up before it gets started. It’s easy to overlook important factors and variables that will have a big impact on your business.
Before you jump in and put everything on the line you want to think through every detail you can about your business and your market.
You want details on your potential customers. You need to know who they are. Where you will find them. How you will convince them to come to you.
You need to know your competition. How you will beat them. What are they good at. What are their weaknesses? How will they react to your presence and what will you do about it.
Also, your own strength and weaknesses need to be examined. Think of how your customers will perceive you. How will your competition perceive you? How will the community react to your new business?
Then, of course, you want razor-sharp super shiny sales approach that no one will be able to resist. As well as how you will get your customers to hear and contemplate it.
Proves Your Business Idea is Worth It – Reason 4
Proves You want it and Proves You Mean Business
If you can’t take the time and put in the effort to completing a solid business plan then what are the chances you will do what it takes to build a solid business. Most business start-ups fail. This is because running a business is hard. There is nothing easy about it. You are going to need all types of business help and much of that help will be realized by starting, finishing, and reviewing your business plan.
Having a business plan provides a sturdy perspective and guide to help you when things get hard. Your plan will not be perfect and you will certainly have to continually tweak it. But that’s OK. Every time you decide to tweak will be a testament to the thought and consideration this process takes. It will be your mental proof that you have done your diligence and continue to be diligent in your efforts towards success and your eventual prize. Obtaining financial freedom.
5 Points to Your Business Plan Back Bone
- Market Environment
- Business Description
- Business Strategy
- Financial Plan
- Game Plan