Why Is A Business Plan So Important When Starting A Business?
When we have a business idea we usually need to carry it out as soon as possible. We are in a rush and we want to materialize it sooner rather than later. However, expert business consultants recommend that we “put the brakes on” and analyze the pros and cons of creating the business in question, taking into account the environment, the market situation, the competitors, our experience in the sector, or the financing possibilities, among other issues. In this article, we are going to explain what a business plan is, why it is so important when starting a business
What Is A Business Plan?
A business plan is not a guarantee that your company will be a success; The good performance of your business will depend on many factors, but, without a doubt, this article can help you to mature the idea, to have a clearer roadmap to be able to achieve them and to define the necessary financing, to set realistic goals. A business plan is a “guide”, or as we said, a “roadmap” that will lay the foundations to transform your project or business idea into an increasingly palpable business reality.
To become a real company you must carry out a detailed analysis of the business idea to know its viability in different aspects. The technical, economic, and financial viability, as well as the social and environmental feasibility, must be analyzed. Based on this analysis, we will define the procedures, strategies, and actions that we must carry out for the company to become a reality.
A business plan is about “testing” the possibilities before jumping into the pool to determine if the benefits outweigh the risks to be incurred by the entrepreneur. In this document, we must try to detail as much as possible the business project that we wish to launch on the market, and we must do so in an easily understandable way.
The business plan must be clear, attractive, concise, and realistic. A business plan is a written document of no more than 30 pages that will help you to set the course of your journey as an entrepreneur. This document will help you start your entrepreneurial adventure without going blind. Some experts recommend adding at the beginning, in the first pages, an executive summary as the most relevant data and ideas accompanied by graphic information that clarifies the information contained in the document. He thinks that the business plan can be, in many cases, the vehicle to obtain financing. Therefore, you may have to present it to public institutions to obtain subsidies or to financial entities or private investors that finance it. So, you should make it as easy as possible to “digest” the information for the person who reads it.
Also, keep in mind that a business plan must be a document that we use throughout the life of the business. It is a recurring and iterative process, so the business plan can be a good tool even to get back on track in times of crisis. It is a recommended procedure for both large organizations and small companies, and can even be used to launch new business divisions in already established companies or to launch new products.
When you have a business plan you will be able to define the objectives based on which to plan the strategies, actions to be carried out, and means to be used. You will be more clear about the own resources you have when undertaking and, therefore, the financing needs that your business initiative will have and You will be able to detail how you will invest the resources that you have.