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Business Plans

Why Writing a Business Plan is Crucial Before Starting a Business

Writing a plan can be overwhelming, so don't be afraid to use up as many drafts as you need
Why Writing a Business Plan is Crucial Before Starting a Business
Image credit: Shutterstock.com
5 min read

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Starting a business may seem daunting, but it doesn’t have to be. All it takes is a strong business plan, the dedication to follow through, and the wisdom to notice when you have to make changes. Your business plan is a map of your future, necessary to guide you through the uncertain waters you’re approaching. Good business owners will understand that strong planning will lead to good management – which, in turn, will lead to a productive and successful business. Planning is all about organizing your priorities and managing your resources. This organization will strengthen your leadership skills, allowing you to guide your business towards success.

Use As Many Drafts as You Need

Writing a plan can be overwhelming, so don’t be afraid to use up as many drafts as you need. The first thing you need to do is, of course, come up with a plan. Don’t stress so much about punctuation or format; just write down the important details. Focus on what you’re good at, what your priorities are, what you can do for the people who will be working under you, etc.

Determine the focus of your business and your target audience. Even if you’re just a one-person business, referring to your old notes and original thoughts when comparing them to the results you’ve seen can be helpful for determining how to tweak your processes for the future.

Think in Advance

Start with a clear long-term goal. Think years in advance: what do you hope to accomplish? What directions do you hope your business will take? After you have a long-term goal, break it into a couple of shorter-term goals or milestones to focus on for the nearer future and the people you will need to get it done. Think bigger than just costs and profits: what’s at the core of your business? What gets it going on an everyday basis?

Return to Your Original Plan

Next, all that’s left to do is activate your plan! Be sure to regularly return to your original plan. Review it, record all progress and setbacks, and make adjustments as needed. Collect all your data and review it critically. This is the point of having a plan: if you track all of your progress, you’ll be able to have a clear vision of what you need to do in the future.

Business plans are useful to help you keep track of the different tasks you need to perform and how to do so. If you regularly meet with clients or investors, it could be beneficial to give them a copy so they understand what your vision is. Firms looking to attract certain employees, suppliers, or other companies to work with may also find it beneficial to publicize their business plans.

Plan Should Include Goals, Strategies, Solution and Roadblock

A good business plan should include the goals, strategies, potential roadblocks and your solutions, the internal structure of your business and delegated roles for accomplishing each task, as well as how much capital will be needed to get you started until you can break even and eventually turn a profit. If you plan on using the resources of someone else – whether they’re an independent firm or an individual investor – be sure to explain clearly how you envision them working with you, and why it would benefit them in the end.

Since business plans are there to help you, they’re most popular for a budding entrepreneur who is in need of some startup funds. Many, in fact most, thriving businesses began this way. Forming a clear and cohesive plan is the best way to convince investors to believe in your work, providing the funds needed to truly get started. In fact, having a solid and dependable plan is often the most quoted, most commonly thrown-around idea for aspiring business owners and new entrepreneurs to really find their footing.

Once you find your way, however, it’s important not to forget your roots. Keep updating your plans, keep reaching out to other people, and it will help your company remain successful. For this reason, businesses are often writing and re-writing their plans all the time. Even the most experienced entrepreneurs can benefit from having their plans laid out on paper.

That said, it truly is the start-up, young businesses that will benefit from a written plan the most. If you want to remain organized, it’s absolutely critical to have a multi-step plan. Next, once you have it, it’s especially important to have it reviewed by a few people you trust. A couple of extra pairs of eyes will be able to catch details you might have missed, propose a different possible outcome, bring up a potential problem (and hopefully its solution).

If you’re not sure how to get started with your business plan, all it takes is a Web search, and maybe some phone calls to your close friends (and/or future coworkers). There are many free business plan templates available, as well as step-by-step guide on how to write and format them. Try not to sweat the small stuff. Just be true to your vision. Good luck!

How to Make a Business Plan and Actually Follow Through