The importance of a business plan in starting a new business. Whether you’re starting a small business or exploring ways to expand an existing one, a business plan is an important tool to help guide your decisions. The purpose of a business plan is to help articulate a strategy for starting your business.
A business plan further provides insight on steps to be taken, resources required for achieving your business goals and a timeline of anticipated results. For existing small businesses, a business plan should be updated annually as a way to guide growth and navigate the expansion into new markets.
Deciding whether you need new assets
Dedicating funds to capital improvements and new assets is never an easy decision for budget-conscious small business owners. But a business plan can bring clarity to the process of whether to buy or lease and help determine the optimal amount allocated to those assets. A good business plan can also help you decide if it’s plausible to take on additional office, retail or work space.
Creating a marketing strategy
Marketing and market potential are important aspects of a plan for aspiring small businesses. A business plan should be inclusive of topics such as target market breakdown, marketing strategy and market penetration. Ask yourself how your business is going to get those people that lead to an increase in your daily sales and how are you are going to reach them to let them know we’re about your business products and services.
Seeking investment for your business
In addition to providing guidance for progress and a marketing plan, your business plan could also be important in securing funding. Whether you are seeking a credit line from a bank or an influx of capital from investors, a business plan that answers questions about profitability and revenue generation plays a pivotal role in whether or not someone decides to invest and how much they might choose to invest.
Hiring the right staff
A business plan may also be needed to retain other professional services as well, such as attorneys, landlords, consultants or accountants. For a small business to succeed, hiring capable people and partners is very important. A part of a business plan’s purpose is to help bring in the right talent, from the executive level to skilled staff, by showing them the direction and growth potential of the business.
Setting objectives for management
A business plan is important in providing structure and management objectives to a small business. It can become a reference tool to keep management on track with sales targets and operational milestones. When used properly and consulted regularly, it can help you measure and manage what you’re working so hard to create.
