Benjamin Franklin once said, “If you fail to plan, you are planning to fail.” This goes to every part of one’s life that it may serve its purpose. May it be as simple as planning for the whole week’s meal or out of town trip. May it be writing and selling your own articles, books or novels as complicated as planning to start your own or someone else’s business, where thorough planning is needed.
There are tons of tools available to help you plan anything effectively. Say, for example, you are planning your itinerary for your family’s out of town trip, then you can use google map to locate and mark the spots you are planning to visit ahead of time. Perhaps you are planning towrite your own articles, Grammarly is one of the most popular writing tools that will help you construct your words effectively. There are many Grammarly reviews you can see on the net now to help you decide whether it’s worth a try. As for making a well-written business plan, there are many templates, step-by-step tutorials, and apps that are highly useful. Check out this business plan article for more helpful tips.
What is a Business Plan?
A business plan is an entrepreneurs’ blueprint and roadmap towards a successful business. It helps them outline their goals and lay out the steps on how to achieve their targets and manage available resources. It is a written document that consists of the operational, marketing and sales plan. Risks, challenges, and opportunities will surely rise as the business grows and a well-thought-of business plan helps manage these key factors. It also tracks the progress throughout the execution phase.
Why Is Business Plan Important For Entrepreneurs?
Making a solid business plan for any type of business is highly important as it will help determine if the business will be successful or not. May it be an online business or a physical business. It will help establish a business with a strong foundation.
1. Proves the feasibility of the business
A concrete business plan helps determine whether the business is going to be achievable within a specific given time. It analyzes if the business is going to make a profit within the timeframe entrepreneurs set for themselves. Aside from that, projecting the return of an investment will assist in deciding if the plan is good enough or needs some fine-tuning. If the result of the feasibility study is below 80%, then changes in some of the key areas of the business may be essential.
2. Defines the target market
The first key area an entrepreneur needs to figure out before starting a business is to know who is his target market. By writing his business plan, every product and service will be according to the people or group of people he is targeting. A well-thought-of business plan aids in developing better services for his specific group of customers. A business plan with a defined target market will better understand the scope of the landscape of the business. The more specific the target market is, the better.
3. Figures out the resources needed
Since putting up a business needs capital, by giving a portion of time to create a business plan helps businessmen and entrepreneurs to figure out how much capital and what other recourses they need to be able to start their business. The money may come from their own pockets or from an investor/ investors. A concise business plan attracts investors to put money on the business or helps secure loans from banks. It is definitely needed for outside financing. By foreseeing the expenses and profits, entrepreneurs will be able to know how much the initial investment will be.
4. Develops various effective plans to achieve the goal/s
To progress a business successfully, different plans are needed. Among these plans are the marketing and sales strategies. Businessmen and entrepreneurs must include these strategies in the business plans as they will determine how the goal will be attained. It’s very crucial to think about these carefully as they will make or break the flow of the business. Remember that an effective marketing and sales campaign aids in making the products and/or services known. The higher the sales, the higher the profit, the more it is easy to determine if your future business will make a profit and worth pursuing.
Aside from the marketing and sales strategies, operational plans determine the flow of the decision process. One of the importance of business plans is to help business owners and entrepreneurs make better decisions. Business is a series of trial and error approach, to avoid making too many mistakes that aren’t necessary, establishing operational guidelines must be incorporated in the business plan.
5. Foresees future risks, challenges, and opportunities
Aside from all the things above, plans on how to calculate and manage risks, challenges and opportunities should also be included in a well-written but a concise business plan. They will guide the business owners and entrepreneurs to draft contingency plans on how to deal with these risks and challenges should they happen in the future. It’s better to expect these from happening and be prepared than to be surprised and think of a rushed solution to resolve it.
Think business plan as a token to success. Without it, the business will not last. Getting into business without thorough planning and guidelines is like going to a war without arms. Noone can’t afford to lose a battle that can be avoided had a plan been thought of to execute. An excellent business plan may not be perfect, but it will essentially help entrepreneurs on how to achieve their goals on business, step-by-step. Running a business is a long term commitment where efforts and resources are put into. So take time to prepare this roadmap to success and take advantage of the tools and resources available online or offline.
Have you made a business plan for your own business? Comment down below to share your own tips and experiences in making business plans. Share this article with your social media friends!