A business plan is a written description of your business’s future, a document that tells what you plan to do and how you plan to do it. You wouldn’t walk over to an empty lot and just start nailing boards together if you wanted to build a house. Starting a business without a business plan is just as risky.
A business plan has two primary purposes. First, and foremost, it should be used to help run your company with a more cohesive vision. It is your roadmap. By truly analyzing your plan for marketing, sales, manufacturing, website design, etc., you greatly improve your chances for success.
The second purpose of a business plan tends to be the reason most clients request plan advice from SCORE. That is, a financial institution or other lender will not invest in your company unless you can demonstrate that you have a blueprint to success.
Here are five good reasons why you should write a business plan when starting a new business:
- To Test the Feasibility of Your Business Idea;
- To Give Your New Business the Best Possible Chance of Success;
- To Secure Funding, Such as Bank Loans or Equity Financing;
- To Make Business Planning Manageable and Effective;
- To Attract Investors.