Importance of a Good Business Plan

must have business planWould you go to an interview without your resume? Of course not! Your resume will tell the company you are applying to who you are and what you can do, your experience and your skills. That is exactly what a business plan is. If you don’t have a good business plan you fail to show your worth and potential to your investors, partners, and yourself.  Having a plan and knowing how to execute it is essential in succeeding in business.

When starting a business you will need people to invest and work with you to make it a reality and hopefully a success, in order to do this you must show them that you have a solid idea of what you want to do and how to do it, This is your Business Plan. Depending on who you plan to share your business with, your business plan will need to contain and explain financial and marketing details.

If you are writing your business plan solely for yourself to keep yourself on track with your sight on your companies goals you will only need to focus on the following:

  • Market Analysis – it is essential that you study the market related to your business, knowing if there is a market for your product and who your direct competitors are will allow you to execute your plans effectively.
  • Strategy and Implementation – Keeping a record of you strategy will motivate you by letting you know that you are still on track.
  • Financial Plan – Keeping track of your finances is imperative to keep your business afloat and out of the red.

If the Business Plan is to be presented to potential business partners you will need to include the ones for personal use with the following:

  • Product and Services – It is essential that your partners know what you are selling, their confidence in the product must be similar to your confidence in it. If the potential partner lacks faith in your product, it will be difficult to work with them.
  • Management – Knowing who and how the business is being handled is essential for anyone to have faith in a business. One of the biggest reasons for businesses failing is Mismanagement. Having unclear management plans will turn off any potential partners and investors.
  • Company Summary – Knowing what the company is, is self-explanatory.

For Investors, your must have a complete Business plan and give precise details in the following:

  • Executive summary – In Fundamental Analysis in investing, it is important to know how the organization and specific roles are.
  • Financial Plan – Yes, I already wrote this. But when looking for investors you must be detailed in this section, 2 pages if possible. Investors are in it for the returns not for the business itself.

If you want to succeed in anything you need to have a plan. A business plan allows you to show how determined and serious you are about your business to your partners,  investors, and most importantly to yourself.