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Starting a business requires planning. Most potential entrepreneurs often assume that a business plan is normally meant for big ventures or sourcing for funding. However, any new business requires a plan. It is vital to have a business plan, even for a small venture, because it helps entrepreneurs concentrate on the necessary steps to succeed, create necessary growth strategies, forecast on financial needs, and attract potential investors.
- A business plan helps entrepreneurs in concentrating on the necessary steps to succeed. Any business has steps that it should follow in order to succeed. Such steps should be well-documented for easy implementation. The book Starting a Business QuickStart Guide: The Simplified Beginner’s Guide to Launching a Successful Small Business, Turning Your Vision into Reality, and Achieving Your Entrepreneurial Dream highlights that a documented plan makes it easy to know what to do at a particular point and to evaluate progress. This fact means that through a business plan, an entrepreneur is able to know what to do to succeed since in comprises various sections, such as marketing and financial plan. Therefore, it is vital to have a plan on how to execute a business idea, however small.
- A business plan helps entrepreneurs in creating necessary growth strategies. Any new business follows a particular life cycle. The most important stage for a new venture in the life cycle is growth. In this stage, it is important to come up with strategies that will make the business grow. Such strategies are normally documented in a business plan during the idea phase, as highlighted in Business Plan Template And Example: How To Write A Business Plan: Business Planning Made Simple. The strategies show what the business owner should do in order to achieve certain short and long-term goals. Therefore, any business, big or small, should have growth strategies, which is one of the main reasons for having a business plan.
- A business plan helps entrepreneurs in forecasting on financial needs. The financial section is an important part of a business plan. It highlights the sources and uses of funds for the business. It also provides forecasts on the expected income and corresponding expenses. Mind Your Business: A Workbook to Grow Your Creative Passion Into a Full-time Gig postulates that this prediction is normally done using projected income statement, balance sheet, and cash-flow statement for the first few years on operations. The forecast can guide an entrepreneur on what to expect with the available investment. Any business, big or small, has financial statements, which makes a business plan a vital tool for start-ups.
- A business plan helps entrepreneurs in attracting potential investors. Investors or venture capitalists normally focus on returns on their investment. This fact means that in order to attract potential investors, it is vital to come up with a well-documented and concrete plan that can convince them to inject capital in the business. Business Plan Pro Complete is a software that can be used to make this documentation. Besides, this conviction can only be done using a business plan. Therefore, as much as an entrepreneur is looking of investors, the size of the business does not matter. The most important document that investors will rely on to make their decisions is a business plan.
A business plan is a vital tool for new ventures. It helps start-ups concentrate on the necessary steps to make a business succeed. It also helps an entrepreneurs create the necessary strategies for growth, forecast on financial needs of a business, and attract potential investors. Therefore, a business plan is an important tool for ventures of all sizes.