3 Ways A Business Plan Will Help You Start A Business
A business plan is a valuable tool for anyone starting a new business. A well structured business plan is your roadmap to achieving your business goals, and can increase your chances of achieving your dreams.
Think of your business journey like taking a road trip. It may be fun and exciting to just jump in the car and drive with no destination or target in mind. Maybe you just want to get somewhere new, or warmer. Maybe your goal is a sunny beach. The problem with this approach is you never really know when you’ve reached your goal, and it’s only a best guess of when you might get there. For example, maybe you reach a new city, but you could continue on to somewhere newer. Or maybe you drive south to reach a warmer climate, but how warm is warm enough?
The same applies to starting a business. Without clear set goals and a plan to get there, you might still achieve something, but is it what you set out to do? And did it take longer to get there?
Unfortunately, the business plan is often overlooked when starting a business and sadly many businesses fail to reach their full potential.
So to help inspire you to write out your business plan, we’re going to take a look at 3 ways a business plan will help you when starting your business:
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1. Turn Your Ideas And Capital Into A Viable Business
You’ve got a great idea for your business, but ideas often seem better in our minds as we imagine only the success that these ideas could achieve. Taking the time to write our your idea helps you to be able to better communicate it to others, but will also help you layout a plan for how your business idea will achieve your desired outcome. By working out a plan to achieve your goals you can turn that great idea into a viable business, and determine the resources necessary to get there.
2. Secure Financing From Lenders and Investors
When people are starting a new business they may use savings as a means to fund the business during it’s initial stages, but often additional funding is required. When approaching lenders or investors they will want to see your business plan. The business plan helps them to assess the viability of the business, and also assess how well prepared you are for the business venture. After all they are giving their money to you, and they want to be repaid with interest (or from growth in the company). If they don’t feel the business is going to work, they are not likely to take the risk.
This does not mean you should only include the opportunity and try to make the business idea sound unbelievable. Investors have reviewed many business plans and know what should be factored in to ensure the business has be well thought out.
This leads us to point number 3.
3. Identify Strengths, Weaknesses, Opportunities, and Threats
A well structured business plan includes a SWOT analysis. SWOT is simply an acronym for Strengths, Weaknesses, Opportunities, and Threats. This part of your business plan allows you to assess you and your team’s strengths and weaknesses, to see where any gaps may be and how you can ensure the business has the right skills and resources to accomplish its goals.
You will also identify the business opportunity. This is where business idea gets to shine. Here you would identify the idea and why there is such a great opportunity.
Another crucial part of this analysis is to identifying threats. What obstacles are going to stand in the way of your business goals? This could be financing, competitors, etc. Any challenges that you can think of. While it may be tempting to glance over this section, don’t do it. Identify your possible threats and challenges is not meant to discourage, but help you prepare for what you might face on the road ahead and help ensure you business plan provides guidance on how to overcome them should they arise.
As mentioned in point number 2, if you only focus on the opportunity and not the cost investors may feel you haven’t fully investigated the idea and have realistically anticipated the challenges you are going to face. As a result, they may not have confidence in your business and may not want to lend you the resources you need.
Even if you are not looking for external funding, make sure to thoroughly research your possible threats and challenges to help you navigate the road ahead and achieve your business goals.
A business plan is valuable for anyone starting a business, and not something to shy away from. When preparing your business plan make sure to thoroughly investigate both the opportunity and any possible challenges you may face so you can be better prepared for them.
Like a good road map, you business plan will help you get to your goal!