Business Development Center - Reasons Why You Need a Business Plan

  1. To create a new business. Use a plan to establish the proper steps to starting a new business, including what resources will be required, and your expectations of your new business.
     
  2. To prove that you’re serious about your business. A formal business plan is necessary to show that you are committed to building the business.
     
  3. To assess the feasibility of your venture. You must determine how good is this opportunity? The business plan process involves researching your target market, as well as the competitive landscape, and serves as a feasibility study for the success of your venture.
     
  4. To determine your financial needs. Does your business need to raise capital? How much? The business plan helps you to determine exactly how much capital you need and what you will use it for.
     
  5. To better understand your competition. Creating the business plan forces you to analyze the competition. All companies have competition in the form of either direct or indirect competitors, and it is critical to understand your company's competitive advantages.
     
  6. To better understand your customer. Who are your customers? Why do they buy when they buy? Why don’t they when they don't? How would you attract them once you open your business?
     
  7. To reduce the risk of pursuing the wrong business. The process of creating the business plan helps to minimize opportunity costs. Writing a business plan helps you assess the attractiveness of this particular opportunity, versus other opportunities.
     
  8. To map out your focus and your efforts. The business plan provides a roadmap from which to operate, and to look to for direction in times of uncertainties.  Without a business plan, you may increase your risk and jeopardize the growth of your business.
     
  9. To track the success of your business. A business plan allows you to compare actual operational results against the business plan. It allows you to see whether you have achieved your overall goals and help you to make adjustments if you need to.
     
  10. To Deal with professionals. Share selected highlights or your plans with your attorneys and accountants, and, if this is relevant to you, consultants.
     
  11. To sell your business. Help buyers understand what you have, what it's worth and if it is something they want to purchase.
     
  12. To grow your existing business. The business plan can help you to establish strategies to allocate resources to help you grow/expand your business.