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15 reasons why a business plan is key to success 

It is inevitable that at times potential business owners may be tempted to want to jump right in and start a business but planning for a business is a crucial first step. In fact, creating a business plan is the blueprint of your business. It states everything you intend doing as well as timelines and methodology of how you will be doing things, your business strategy in a nutshell. You wouldn’t just build a house by going to an empty plot and putting a few bricks on top of each other and then add sand, this is risky you would need to have your plans in order first. Starting a business without a solid plan is just as risky. However, unlike a house plan a business plan is not static. It is not a once off thing that is done and left to the side. Business plans change over time as business objectives evolves and new ideas emerge and therefore business plans are quite dynamic as they change over time as the business grows.  A business plan is an important tool, it serves as a guide to help you make better decisions for your business. It also serves as a roadmap for the success of your business providing clarity on all aspects of your business such as finance, marketing, personnel, products, services and operations. We will now delve deeper into the reasons why a business plan is key to success. 

  1. To test the practicality of your business. Writing a business plan is the best way that you can test whether your business idea is feasible and practical or not.  If the business plan reveals that the idea is far out of reach or unattainable then you will save a lot of money and time. 
  2. To give your business a good chance for success. Writing a business plan will ensure that you pay attention to the finer details of your business such as budgeting and market planning which in the end contributes largely to the success of your business. 
  3. To help you secure funding. Most startup business need funding to get off the ground. Without a well written business plan there is very little to no chances of receiving funds from financial institutions. 
  4. For effective and manageable planning. Your business plan should stipulate how you will move forward in carrying out all which has been planned and how you will manage this. 
  5. To attract investors. If you want to attract investors you will need to have a solid business plan in place, this gives them an opportunity to go through your plan and understand your business before making any decisions.  
  6. To help steer your business in the right direction. A business plan can be seen as a GPS to get your business going. You will use your business plan to guide you in terms of how to structure, run and grow your business. 
  7. To help you reach business milestones. A well thought and written plan will enable you to see how far you have reached in terms of your key elements and will also inform you about your future decision making. 
  8. To prove your seriousness about the business. A formal business plan is necessary as it shows investors, funders and all other parties involved just how serious you are about your business. Creating a plan forces you to think through and select strategies that will allow for your business success. 
  9.  To gain better insight into your competition. As part of creating your business plan you need to analyze your competition this will help you to understand your competitive advantage. If you don’t have a competitive advantage yet, gaining insight into your competitors will assist you in doing so. 
  10. To gain better insight into your customer. As part of creating your business plan you will need to research your customers thoroughly. Understanding your customers will assist you in offering the best products and services according to their needs. 
  11. To determine your financial needs. A business plan will assist you in discovering exactly how much you will need financially. 
  12. To outline each area of your business. A well-written business plan will provide you with an overview of all aspects of your business and will allow you to detail all these aspects.  
  13. To monitor your business growth. A business plan serves as a business tool that enables you to monitor your progress. 
  14. To formulate contingency plans. Having a business plan means including contingency plans so that you will know how to act quickly in the event of unforeseen. 
  15. To attract talented and experienced people. When the time comes for hiring employees, your business plan will give talented people a breakdown of your business. 

 

For further assistance with your business plan please feel free to contact Chamberlink. 010 040 8328 marketing@chamberlink.co.za 

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