Here’s the most critical mistake start up business owners tend to make, they don’t have a business plan. Why is a business plan so important? Let’s break it down and talk about a few of the reasons you really want to have a clear roadmap for where you are and where you want to go.
1. Strategy – The worst thing a new business owner can do is jump right into the fire without having any kind of protection going in. Mapping out a strategy allows you to look at all the finer points of owning a business before you get started. How much capital will you need to have in place? Do you have all the skills need to run the business or will you need to hire management immediately along with regular employees? How big are you hoping to open? Where do you intend to be in five years? You have to know where it is you want to go from where you are right now and arrange your resources accordingly.
2. Keeping everyone on the same path – If you have a partner or partners, even if you just have excited family members, everyone is going to want to know what’s going on and why. Having a business plan is a great way to keep everyone on the same page regarding goals as well as keeping focus on the facts as is.
3. Establishing a clear idea of the product, pricing, and customer service expectations – This is where you ask important questions you need the answers to if you are to achieve success. What is your product and what need does it fill? What do you hope to do with the product in the long term? Are your established ideas enough to satisfy customer needs, wishes, and satisfaction?
4. Loans – Are you going to be taking a loan for the business to get started? They are going to want to see that strategy plan you’ve drawn up. Be prepared for them to pour over every aspect of your strategy and have plenty of questions for you to answer. Make sure you are ready because a 2007 study found that business with a firm strategy plan in place were able to garner twice the capital as those without it in the first year of business.
5. Discovery – As you write out a business plan, you will be surprised about what you can discover. You may find out during the writing of your business plan that what you first had in mind isn’t the business that is shaping up on paper. A well-written business plan will reveal details and questions that you never considered and allow you to approach the launching of your business with more confidence.
To access the easiest Business Plan template around download my Boot Your Boss & Start a Booming Business guide here.