Quick answer: Always. A business plan is a document that clearly states the future objectives of the business and strategies for achieving them. A good plan will include detailed information about the competitive landscape, the opportunity, the team, the financial model (including budget), and sales and marketing plan.
While most people who are starting a business know that a business plan is an essential first step, it isn’t always clear why it is so important. After all, a good portion of a business plan is going to be making projections and assumptions which may or may not ever come true. Here is a deeper look into key times when having a business plan in place can make a huge difference to your success:
Seeking Investors or Loans
When asked why a business plan is needed, one of the most common answers is to attract investors or qualify for business loans. While a business plan often contains a lot of assumptions (and even wishful thinking) about your financial future, it does give banks and investors some criteria upon which to base their decisions. They are able to read through your business plan to see if you are taking this venture seriously, if you have realistic goals and reasonable assumptions, and how well you have researched your market. In most cases, the banks and investors will be less concerned with the specific numbers in the plan and more concerned with the quality of the other information.
Evaluating Your Future
When facing difficulty in your business or deciding on a specific direction, you may become discouraged or fearful. A good business plan will have information about your long-term goals and how to achieve them. When dealing with these hard times, reading through your business plan will not only help to give you renewed optimism, but also offer guidance to how best proceed toward the future.
Likewise, if the plan was made upon faulty assumptions, the entrepreneur can revisit those assumptions and the resulting conclusions to further improve the business plan
Making Key Decisions
If you are facing a difficult business decision, it can be very helpful to refer back to your business plan. Many hard choices in business come with a lot of emotional baggage, making it hard to make the best decision possible. When you look to your business plan for guidance, you will be referring to a document that was made some time ago with a more objective attitude. Using the projections, goals, and other information, you can often take a more ‘business minded’ approach to your situation.
These are just a few of the different times when a business plan is important to have in place. Once your business is up and operational, this plan could be beneficial in many different situations. A potential large client could request to see it, a possible business partner, or any number of other people. Having a business plan in place will help ensure you and your business have the professional appearance needed to compete successfully in your competitive industry.
If you need help starting your business, or if facing legal challenges, contact Doida Law Group at https://www.doidalaw.com/contact/ to set up a consultation to discuss your options today.