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|More Than A Fund-raising Tool. Other Reasons Why You Need A Business Plan. by igwedaboss(m): 10:36pm On Apr 12, 2018|
I’m writing on this topic because over the years as a Business Writer, I have come across start-ups and business owners who don’t see reasons why they need a Business Plan other than to request for a bank loan from financial institutions, grants from NGOs, and investment opportunities from angel investors. Well, in truth, you need a business plan to achieve the aforementioned reasons but in reality, it is a lot more than that. If you are reading this article, it's most likely you fall into this category of people and I will make it clear why you need a written plan for your business beyond just for accessing financial support.
The real question I would like you to ask yourself is, why do these financial institutions, organizations, and investors request for a business plan? Give a thought to it, why do they request for it? Whatever answer that might come to your thoughts is part of the reasons why you should have it. Let’s start by understanding what a business plan is. These are some definitions;
- According to the government of the United Kingdom, a business plan is a written document that describes your business.
- According to start up loans, a business plan is a written document that describes your core business objectives and how you plan to achieve
them over a set period of time.
- Wikipedia defines it as a formal statement of business goals, reasons they are attainable, plans for reaching them.
- My definition of a business plan is a written document that shows the blueprint to achieving short-term and long-term business goals. It is
your ‘fallback-to business document’ when you are stuck.
From the definitions above, you will notice there are common words used in defining a business plan. These common words are written, describe, goals, and attainability. So, the main reasons why financial institutions and others will request for your business plan is to first understand your business model, goals and objectives, revenue model and how you intend to achieve it. Are these not enough reasons for you to have a business plan other than for seeking loans or grants?
Let’s go a bit further.
Real Reasons Why You Need A Business Plan
A Blueprint for Your Business: The hard truth is, if you wish to build a striving business that would be of value to the society, you will need a business model. To achieve a successful business, you need to plan. It shows your commitment to achieving your visions for the business. A business plan becomes your blueprint. It is the document you will refer back to when you come across obstacles and challenges. Therefore, it is an important value to building your empire whether big or small.
Sticking to the plan: When you start running your business affairs, you will come across potential and new opportunities, the moment you begin to get distracted, your business will most likely begin to get affected negatively. With that said, if you have a business plan, you will know what course of action to take. It will be able to help you understand if the new and potential opportunity is healthy for the growth of your business or not.
Course of Action: Almost everyone who has started a business at one point or the other will face a situation when they don’t know what to do next. It has happened to me too. Guess what? The business plan helps in showing the direction you need to follow. Are you still underestimating the necessity of a business plan? Keep reading.
Knowing your market and competitors: In fact, if you do not know your market, what are you doing starting a business? Understanding your market gives you an edge in winning market shares. Knowing your competitors will help you identify their strengths and weaknesses. You can then build on their weaknesses to offer more than they are offering, this way, you win. But how do you get to reflect on all this information without a business plan?
To set business goals, objectives, and milestones: By default, every business has short-term and long-term goals. Short-term goals make long-term goals attainable. To actualize your vision for the business, it is important to state them that way you will know all that is necessary to do to achieve them. In the process of attaining them, there are values, objectives, and milestones, these factors make-up all the possibilities. When these are all clearly stated in your business plan, you already know you are the right path to building your business empire.
I’m sure with the above-mentioned reasons, you will agree with me that a written business plan is a necessity for any business whether small or big. Don’t just treat your business or project plan as a fund-raising tool, it offers more. And remember, a business plan is not a static document, it is a dynamic one, time and season change same as your business; therefore, you need to develop the plan as changes happen.
To get a copy of our business plan template, click on the source link, scroll down to the bottom page and click on the business plan template download link.
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