Why Have A Business Plan

Most people write a business plan because they have to. Many banks and other lenders require that a business plan be submitted alongside applications for startup or expansion loans. A detailed, written plan, especially one with accompanying financial statements, helps them gauge the viability of the business and, by extension, the lender’s risk.

But a business plan is not just a hoop to jump though in order to get money. It can be an important piece of the puzzle that can help determine the path and ultimate success of a business. A business plan can also serve as a goal-setting or motivational tool. Even well-established businesses develop business plans to set milestones for the business one, two, five, or more years in the future.

A business plan can address everything from the basic daily workings of the business to marking plans to competition – all in one, cohesive document. Until you know everything it will take to run your business, it’s nearly impossible to anticipate how much money your business will make, and how much money it will take to do it.

Lack of planning is one of the top reasons for business failure. Having a written business plan can only help an entrepreneur’s chances.

Some people are surprised to find, during the business plan research and writing process, that their business idea may not be as viable as they once thought. Better to find this out sooner than later. This frees you to either modify the structure and vision of your business, or choose a different venture altogether.

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