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Why is a business plan important?
Do you find yourself dreading writing a business plan? Trying to convince yourself that maybe you don’t need one?
I mean, what is the purpose of a business plan?
Well, I hate to be the one to break it to you, but having a well researched and well-written business plan is still important.
There are four main reasons behind the importance of a business plan:
- To obtain funding (doesn’t apply to everyone of course)
- To make marketing decisions
- To identify potential weaknesses (before they become a problem!)
- Gaining clarity on the future of your business
In my experience, the importance of a business plan all comes down to the research.
Not only do you learn about your market and your competition, but it also allows you to deal with the reality of your expectations.
Because face it, not all of your expectations are going to be true!
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What does a business plan help you do?
Let’s dig a little deeper into what a business plan can help you to accomplish.
First, funding. Not every business needs funding when they are starting out. But taking some time to look at your financial projections can help you make some major decisions.
Thinking about renting an office? Estimating your income and expenses for the year can help you decide.
Wondering how much inventory to order? Knowing what your expected cost of goods is going to be will allow you to place an appropriate order.
This leads into your marketing decisions as well. When you take a long hard look at your market and competition you have a much better chance of placing yourself at the right juncture of the market.
Your marketing budget will be much better spent once you know how the market is currently performing for your competition.
And with the knowledge you’ll get by identifying your weaknesses beforehand you’ll be able to tweak your products or services prior to launch instead of in response to a lack of sales.
You’ll find planning for the future of your business much easier with all of this information researched and compiled in a document you can reference again and again.
Planning with actual data in front of you will help you to make sound decisions that will be the best for your business.
So does a business plan sound like such a bad idea now? I didn’t think so!
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How to get started with a One Page Business Plan
A non-intimidating way to start a business plan is to just write a One Page Business Plan.
This is a simple document that gets you started thinking and researching the most important parts of your business.
Once you’ve started on your research you’ll start to see how valuable it is to do and how much it will help you focus your business.
Creating a One Page Business Plan is almost like creating a roadmap for your business. It tells you where to go and how you’ll get there.
Basically, it’s going to ask you to answer six questions:
- What problem is your business solving?
- How will you solve that problem?
- How will you make money?
- Who is your competition?
- Who are your customers?
- How will you market your business?
Once you’ve written out your answers, you will use all of that information to create an action plan for the next few months of your business.
You can download a One Page Business Plan template by entering your name and email below.
The purpose of a business plan
So now we come down to the real purpose of a business plan.
Are you ready for the big secret???
A business plan is a plan…for your business.
It sounds crazy but I really think people overlook that this is actually creating a plan for your business’s growth.
Skipping writing a business plan is a major mistake that I hope you’ll avoid. You would be missing your chance to identify problem areas, adjust your business before it’s an emergency and find an easier path to success.
Now that you know the importance of a business plan and how it will help you reach your goals for the future, I expect to see you go start writing one today!
The bottom line is this… your business depends on your planning.
Make sure to pin A Simple Guide to the True Importance of a Business Plan for later!