This is the first in a series of learning how to write a
business plan. However, many people do not understand the need for a business
plan, saying that they already have a business going, why have a plan? Let me
tell you seven great reasons:
- Let Your Managers Know What You are Doing: A business plan can help you set specific objectives, letting you and your managers track and follow up on the outcomes. With a business plan, you know what you want to have happen and you know if you got what you wanted.
- Determining If You Need New Space: Renting or buying space is an expensive endeavor. A business plan will help you determine if your space is too big or too small, or if it would be worth your while to buy rather than to rent.
- Hiring As an Option: Salaries are a fixed cost that you need to consider in your bottom line. With a business plan, you can determine how many employees you need, whether you need them full or part time, and what positions you need them to fill.
- Buying New Equipment: A business plan helps you “see” into the future. Do you need new equipment to grow your business? How do you know unless you have a plan for your growth?
- Gain Business Alliances: Rarely does a business work without needing some kind of support. Perhaps a printer or a shipper. No matter what your needs, having a business plan will help you as you form business alliances. With a plan, these other companies will know who you are, what you do, how you plan to do it, and what their part will be in this plan.
- Keep Team Members Apprised: In addition to having alliances, you will also likely have team members such as attorneys, accountants, and consultants. A business plan will help them know where you are and where you want to go so that they can provide advice to help you achieve your goals.
- Seek Loans: When you seek to get a loan from a bank or an investor, they will want to see your plan. They want to know how you will proceed and what course they can expect. No one wants to lend money to an unknown entity.
