Many entrepreneurs started their businesses without a business plan. ‘I don’t know what this fuss about business plans is. All I needed was my head and my mouth, the rest just fell into place’, says Jomo (26), talking about when he started his cleaning service. You have as much chance of succeeding in your business if you start it without a business plan, than if you do. The big difference, however, is that you are likely to start and run your business better with a business plan.There are various reasons for writing a business plan. It depends largely on yourself and your circumstances. Here are some of the main reasons why it may be important:
1. Thinking long-term
Writing a business plan helps you to think beyond just starting the business. It can help you to see the big picture a few months or years down the road. It can also help to keep you motivated though difficult times!
The business plan helps you to determine the viability of your business idea. It helps you to determine how profitable your business can be. It will help you identify how much money you will need and where you will get it. The business plan will also help you to identify the problems you may have in the future.
3. Making better decisions
Writing the business plan requires you to do research on the market you want to enter as well as the requirements for running the business. This research will provide you with information that will help you to make more informed decisions.
4. Your reality check
In the excitement of starting a new venture you can get carried away and end up making strange decisions. The business plan keeps you rooted in reality. It will identify problems before they arise helping you to think about solutions. You will also identify your strengths and weaknesses as well as places where you can get help.
5. Selling your idea
Your business plan is one of the best ways to sell your opportunity to others.A good business plan shows that you know what you are talking about and that you have done your homework. It gives others confidence in your ability to make the opportunity a success.
6. Raising business finance
Few lenders, such as banks, will provide you with business finance without a business plan.There are many other reasons for writing a business plan, but the most important reason is that you see the need for writing one. If you are going to write a business plan because a bank or another organization needs it, for example, you may never really own that business plan. It needs to be yours! A part of you needs to be invested in that plan for you to own it. Your investment can be in the form of the time you spend putting it together or it may be the ideas that you have expressed in the plan. Complete the following exercise and determine why you think it is important for you to write a business plan: