Why You Need a Business Plan

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If you are seeking to open a new business– either online or in the real world– and you don’t have the capital, you will need to seek help from individual or institutional investors. And the first thing they are going to want to see before they invest a dime in your business is your business plan.

What Is a Business Plan?

The business plan serves two essential functions:

1. It provides a blueprint that you can use to build your business
2. The business plan explains to investors why your business will be financially successful

What investors want to see is a business plan that presents a model of what your business will look like from its very beginning until it is operating at full capacity. Your business plan should include realistic, attainable objectives. Your business plan won’t fly if it includes unrealistic revenue forecasts or is built on a swampy foundation.

Benefits of a Business Plan

Even if you are going to be your business’ only employee and work out of your home, you still need a business plan. Because your business needs a map that leads it where you want it to go.

Your business plan should be as detailed as possible, the larger and more complicated your business will be, the more detail your business plan will need to include.

You will need to rely on your business plan and reference it frequently both before and after you launch your business, so it’s absolutely necessary that you have everything in place as much as possible from the beginning.

Elements of a Business Plan

Successful business plans have five elements:

Financial Plan— This may be the most important part. You need to explain your financial goals and a detailed account of your estimated costs, including payroll, rent, overhead, supplies, raw materials and any other expenditure.

Background Information— How and why are you creating this business? Here you will include general information such as what types of services and/or products you will be selling.

Operational Plan— Indicate how your business will function. Include hours of operation, estimated number of employees, location, and any other relevant operational data.

Every business plan is different. There’s not one single template you can use and simply fill in the specific details of your business proposal. When developing your plan, present the information so that anybody can use it as a tool to decide whether or not to proceed with the business.

Decision-Making Criteria— In this section, indicate what types of things you are going to consider before moving forward with the plan.

Marketing Plan— Explain what type of marketing you plan to use to promote your business, such as paid advertising, social media marketing and direct marketing.

Getting Help with Your Business Plan

They can assist you in developing your business plan if you have a partner. Others who can help you include your accountant, if you have one. CPAs have enough experience to identify glaring errors so you can correct them before showing it to anybody else.

When you have as much feedback as you have and need made the necessary changes to your plan so it is as realistic and accurate as possible, you can use it to attract investors. Your business plan will serve as the centerpiece of your pitch when you present to investors or apply for a business loan.

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Your next stop should be trusted professionals in the same field as yours. While you may not want to hand your business plan to somebody you will be competing against directly, if you have a friend, a former business school professor you are still close with, or a mentor who can give you genuine, helpful advice, see if they would be willing to take a look at your business plan.

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