Smallbusiness.com released the statistic that more than half of millennials have a business in mind that they want to start. Furthermore, the biggest thing that these young, first-time entrepreneurs – as well as experienced business owners – wish that they knew was how to write a solid business plan. The misconception behind business plans is that they are only needed as a funding tool, which couldn’t be further from the truth.
If you don’t necessarily need a business plan to receive funding, then why fret over writing one? The business plan is first and foremost a powerful tool for setting goals and monitoring the progress of your business; this document allows the business owner to clarify both the direction and purpose of their business. Through compiling and assessing the businesses operations as a whole – value proposition, marketing assumptions, operations plan, financial plan, and staffing plan – the business owner can make realistic goals, as well as monitor its progress towards set goals. When writing a business plan, the business owner is also forced to plan for tomorrow instead of today. With a comprehensive breakdown of the business, you will be able to effectively plan for changes in the market, business growth/shrinkage, and innovation.
Next, a solid business plan can help to attract high quality team members, as talented employees want to work for a business owner who not only has goals and a future vision, but one that can also show them a path for personal growth within the company. A solid business plan shows business potential and business vision, which is extremely important for attracting the cream of the crop.
Lastly, business plans help the business owner fully understand its financing needs, helping pin point what funding it needs and where it’s going to come from. Understanding all aspects of your business operations, as well as having accurate goals set, will better help you understand the financial direction of your firm. When considering financing options, the business owner had better understand how much capital their business is bringing in and how much they actually need.
Before setting out to write a business plan, or dust off your current one, here are some keys-to-success to keep in mind. First, predictions are just predictions, inferences that lead to the predictions are more important than accuracy. Second, all business plans need the ability to measure accountability and track results. Third, review and revise the business plan at least every month to help better understand goal progress. Fourth, be realistic with time and resources. lastly, don’t leave empty claims. And sixth, resist overstating and/or making amateur financial projections.
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