Why You Need To Write A Business Plan
From Susan Ward
5 Reasons For Writing A Business Plan
The business plan is the blueprint for your business. You wouldn't walk over to an
empty lot and just start nailing boards together if you wanted to build a house.
Starting a business without a business plan is just as foolish.
Yet unlike a house, a business isn't static. We often make the mistake of thinking of
a business plan as a single, static document that you just put together when you're
first starting out and then set aside.
In actuality, the business plan for any business will change over time as the business
develops, and any particular business may have multiple business plans as its
objectives change.
Here are five good reasons why you should write a business plan:
1) To test the feasibility of your business idea.
Writing a business plan is the best way to test whether or not an idea for starting a
business is feasible, other than going out and doing it. In this sense, the business
plan is your safety net; writing a business plan can save you a great deal of time and
money if
Often, an idea for starting a business is discarded at the marketing analysis or
competitive analysis stage, freeing you to move on to a new (and better) idea.
2) To give your new business the best possible chance of success.
Writing a business plan will ensure that you pay attention to both the broad
operational and financial objectives of your new business and the details, such as
budgeting and market planning. Taking the time to work through the process of
writing a business plan will make for a smoother startup period and fewer unforeseen
problems as your business becomes established.
3) To secure funding, such as bank loans.
You're going to need both operating and startup capital to start a new business and
you have no hope of getting any money from established financial institutions such
as banks without a well developed business plan. And established businesses often
need money, too, to do things such as buy new equipment or property, or because
of market downturns. Having a business plan gives you a much better chance of
getting the money you need to keep operating or to expand.