Entrepreneurs or professionals who are starting a new project, may it be full-time or in form of a side project, often wonder “Do I really need a business plan? Isn’t this a waste of time and hinders me from getting started?” The answer to these questions is almost always “Yes, you do and no, you are not wasting your time!”
Often, experienced professionals have the desire to skip over the business plan stage, especially when launching a business in an industry they have some experience with. Besides, many individuals believe that as long as they are not looking for investors or a bank loan, there is no need to prepare a business plan. However, there are still various reasons for having one in place. This will not only make your life much easier, but save you tons of time later on. Either way, you need a plan, and here’s why:
1. You’ll have it all covered
When starting a new project, we often focus on the excitement of doing something new. Meanwhile, we are less excited about certain aspects of our start-up, such as dealing with its legal structure, possible risks or required starting capital. Purpose of a good business plan is to have you think about every aspect of your project – vision, mission statement, financing, possible risks, marketing, competitor positioning and more. You are obliged to focus on every area you are tempted to skip. Once your business plan is completed, you’ll have a blueprint for success.
2. You’ll be able to explain your ideas to others
One of the key components of a business plan, and the first question you should ask yourself when brining your project to life, is what your vision and mission statement is. What problems does your product or service solve? What’s the Unique Selling Proposition for your future customers. Your business plan determines your goals and serves as a key guideline that keeps you clear on the direction of your project. Moreover, the statement gives you clarity why your business exists. In case your business consists of several co-founders, having a clear direction is useful as well to stay aligned. Moreover, when in search of business partners, suppliers or investors, you’ll be able to precisely present your idea.
3. You’ll identify problems ahead of time
The last thing you want, is to risk working on your business for a year, only to realize you were doomed to failure from the start. Possible obstacles, such as a lack of finance, may cause your project to fail. In this regard, ask yourself the question if you would rather uncover potential issues during the concept phase or wait until you’ve wasted time, money and resources? Identifying potential risks and challenges during creation of your business plan, helps you avoid potential drawbacks during execution.
4. You’ll be able to counterbalance your emotions
Creating a business can be very emotional. There may be times when you are feeling overwhelmed, in doubt or unsure of what you are doing. When your emotions get the best of you, a business plan may help you keep an objective look at your “reason for being” and your long-term vision.
5. You’ll have a game plan in place
When it comes to starting a business, execution is everything. That being said, defining priorities, clear goals and deadlines is crucial to turn your ideas into reality. Similarly, focus on questions like “What features are my clients really looking for?”, “How can I attract customers?”, “Why would customers choose my product and not the ones of my competitors?”. These are all questions, that need to be addressed during the business planning process.
6. You’ll be ready for potential opportunities
Lastly, you may not be actively seeking financing or business partners. However, an opportunity may arise for someone to join your team or invest in your project. Various studies have shown that start-ups with a business plan on average raise twice as much capital as those without one. If your plan is complete, you can hand it over and impress the would-be financing source without delaying the process.
We help individuals, start-ups & corporates turn ideas into reality. If you’d like support to solve challenges inside your organization or need help with business creation, please feel free to contact us.