Importance of Business plan for Startups
Business Plan acts like your Google Maps. Just similar to your road travel where it is impossible to travel without maps, without a business plan you are traveling on a road with a blindfold on. Why stop and ask for directions rather it is always good to be prepared in advance and have all the prerequisites while traveling. Similarly, it is always good to prepare a business plan.
When even for a small travel, we prepare in advance; then while starting your business, you definitely need a business plan for plain sailing otherwise your boat might sink. A business plan acts as a blueprint that helps business founders to see the bigger picture, it helps them to see the road ahead, better decision making, and the success of your business.
Therefore, preparing a business plan is the first and foremost priority before starting your new venture. Further, a well-drafted business plan also attracts the investors as it helps them to know whether your business is viable or not, and can the investors invest their hard-earned money in it?
There are multiple reasons why you need a business plan for your start-up. Let us have a look at some of them.
- Decision Making
There are several purposes of a business plan. One of the most prime aspect of a business plan is it helps in better decision-making. Starting a business means endless hours of discussion and crisis management. These discussions are never-ending and hence many times it becomes difficult to reach a conclusion. Further, it is not always possible to meet and discuss. That’s where a business plan helps you to sail through. Preparing a business plan helps you to answer some of the most important decisions of the business beforehand.
A detailed business plan must include your marketing strategy, what are your products, and many more. While preparing the business plan you answer all of these questions and help you build a comprehensive business plan which helps in better decision making and building strategies.
- Finding the loopholes
Preparing a foolproof business consumes a lot of effort and ample time. It takes a lot of effort to prepare an all-inclusive business plan which is well-researched and leaves no stones unturned. Even if after completing it, you feel something is missing and it seems your efforts go in vain. Then, don’t worry my friend your every attempt will take you a step forward towards your goal, give a better definition to your vision, and business plan will be a realistic one. It will help you in searching every loophole and eliminating it.
- Stop from committing big mistakes
As per Small Business Administration, out of all the neoteric businesses, only half of them can celebrate their fifth anniversaries. Some of the most common reasons due to which businesses fail are as follows:
- Lack of market need: People don’t want to buy your product
- Lack of money: Businesses run out of money and lack of cash flow
- Cut-throat competition: It becomes tedious to generate profits in today’s competitive corporate world
- Price: If you are pricing your product too high, then no-one will buy, whereas if you price them too low then how will you generate profits, and hence in both cases your business fails miserably
- Business Viability
Many budding entrepreneurs start their business purely due to passion, although being passionate about business is great; however, it doesn’t lead to success. Creating your business plan exactly turns your dream into reality. This is the most important step between a dream and a dream come true or reality. The business plan is the key that helps you to start your dream business.
It is the market research component of a business plan which gives you every nitty-gritty of your business idea. Starting from customer inputs, industry future, to your competitors strategy. Not only a business plan is a guidebook for startups but also it helps existing businesses in expansion, mergers etcetera.
- Objectives and Milestones
Without a business plan, objectives are just imaginary, and not reliable at all. A business plan gives you a crystal clear picture of money, marketing, and resources; therefore, it helps you to make achievable objectives and realistic milestones. It also gives you accountability to your long term vision, short term goals, and even guide you in making strategies for the future.
- Ease of Communication in the hierarchy
If you have a team of 5 or 100, you cannot explain to everyone and at any time. You have other important work like business generation, marketing strategies, and so on. You cannot be available every time. Hence, your business plan will answer every query in the hierarchy especially in your absence.
Further, a written document is always better to understand rather than verbal conversations where many important information can be missed. It also helps in keeping the entire crew on the same page and everyone is aligned with what work one is engaged in.
- Financing
If you are looking forward to funding from private equity players, venture capitalists, bank loans, then in every case you will require a business plan. After all, investors are very concerned as they are investing their hard-earned money. Everyone is also worried, whether their money is in the right hands or not. A business plan ensures that their money is invested in the right place and every penny will be utilized in the best possible way. A business plan is the most effective way to determine the road map of your business and acts as the most important requirement if you seek outside funding.
Now, you know the critical importance of a business plan and why should write a business plan before starting your venture. In today’s digital age, where a huge population looks forward to starting their business, and to check your business viability it is quintessential to get a business plan. Why fear when Infocrest is here. Connect with us now. https://www.infocrest.in/